It's a sad day for the networking industry. Nortel this week filed for Chapter 11 bankruptcy protection, ending months of speculation about the future of the company.
The filing was the best option left to Nortel, which has $11 billion in liabilities and has been on a not-so-slow slide for years. The filing also came a day before Nortel had to make a bond payment. Network World's Tim Greene has written an excellent FAQ that details how Nortel got to this point and what it means for Nortel now.
Nortel had been trying to sell its Metro Ethernet Networks business unit since the fall, with no success. Last time, I pointed to an article that said Huawei was likely the most interested buyer, but also the least likely to be accepted, because of its roots.
You could argue that Nortel's timing was unfortunate, that it went looking for a buyer for the business unit at exactly the wrong time, just as the economy started looking really ugly. But really, Nortel has been trying to turn things around for much longer than that.
The International Nortel Networks Users Association issued a statement supporting Nortel's bankruptcy filing and indication that a stronger enterprise focus may result. In fact, Nortel's enterprise chief has attempted to reassure customers that it's all just business as usual while Nortel sorts things out under the bankruptcy restructuring.