UPDATE 2-Nortel says Genband trying to pay less for CVAS unit

Thu Nov 18, 2010 7:49pm GMT

Quotes

   

* Says Genband cutting price by $37 mln

* Says dispute over terms of sale agreement

* Files separate lawsuit against Nokia Siemens

* Nokia Siemens sued for breach of contract

By Santosh Nadgir (Adds details on Nokia Siemens lawsuit from separate court filing)

Nov 18 (Reuters) - Nortel Networks Corp (NRTLQ.PK) said Genband Inc was looking to "drastically and improperly" reduce its offer price for a Nortel business unit which it agreed to buy in December 2009.

Nortel has also sued Nokia Siemens Networks for failing to pay for certain trial equipment, according to court papers filed on Thursday.

In court papers filed late on Wednesday, Nortel said Genband, which agreed to buy its carrier Voice over Internet Protocol and application solutions (CVAS) business for $179.5 million, was looking to reduce the price to $142.9 million by using certain provisions in the sale agreement.

Genband did not immediately return calls seeking comment.

"This is a disagreement about the clear terms of the sale agreement - and, in particular, Genband's attempt to disregard those clear terms," Nortel said.

Last December, Nokia Siemens lost a bid for Nortel's optical networking and carrier ethernet business to Ciena Corp CIEN.O following which it received a break-up fee of $22.5 million from Nortel.

Nortel claims that Nokia Siemens breached a purchase and license agreement after losing that bid.

It was not immediately clear how much Nortel had sought in damages, as many parts of the 15-page lawsuit were kept confidential.

Nokia Siemens did not immediately return calls seeking comment. Once North America's biggest telecommunications equipment company, Nortel filed for bankruptcy protection in January 2009.

Rather than attempting to restructure, it is auctioning off its assets in an attempt to pay back creditors. (Reporting by Santosh Nadgir in Bangalore; Editing by Roshni Menon)

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