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Nortel Networks Files for Bankruptcy

WILMINGTON, Del. (CN) - Nortel Networks, one of Canada's biggest companies, has filed for bankruptcy, listing nearly $12 billion in debt. Nortel, which employs 32,000 people, filed the day before it was due to make a $107 million interest payment on a loan. Its bankruptcy leaves organizers of the 2012 London Olympics in a quandary, as the company was one of the primary corporate sponsors of the games.

According to the London Times, Nortel paid $2.5 billion in 2006 to settle shareholder complaints of fraud. Investors accused the company of juggling the books to disguise that it was being hurt by competitors who offered cheaper, faster products, the Times reported. It said Nortel's former CEO Frank Dunn and other top executives were charged with accounting fraud.

Nortel's new CEO has cut the work force by 18 percent since 2005, but the company still posted a $3.4 billion loss in the quarter that ended in November 2008.

Nortel is one of the oldest telecommunications companies, having acquired some of its original rights from Alexander Graham Bell, according to The Financial Times.

Nortel share prices have plummeted from $1.23 (Canadian) in March 2000 to 13 cents. The company will continue to operate while it reorganizes.

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