Judge sets hearing for Nortel's $3B tax tab

Nortel will have its day in court, with the IRS, that is. Judge Kevin Gross, who is presiding over Nortel's U.S. bankruptcy proceedings, will hear arguments from the IRS about a certain $3 billion tax tab the beleaguered, division-shedding former telecom giant supposedly owes Uncle Sam.

Gross announced a court date of Oct.13 for the proceedings, which he ruled must take place in bankruptcy court as they are "a core matter," contrary to the IRS's argument that the hearing should be held in district court. Nortel has argued that the timing of the IRS claim indicates an "action in bad faith."

The IRS suit caused a rewrite of a portion of the sale contract between Nortel and Avaya for the Nortel Enterprise Solutions division, according to Bloomberg. The tax claim, if it's ruled to take precedence, could affect the liquidation of Nortel's remaining assets, as well as those contracts that are already in place.

For more:
- see the Bloomberg report here
- see the Forbes article here 

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