There's been a huge roadblock in the effort to wrap up Nortel's bankruptcy.
The company has announced the mediation process to deal with the division of assets among creditors has collapsed.
The talks began last November and another session was held over the past three days but has come to an end without any agreement.
Nortel, bondholders and some of the other major creditors were trying to reach a deal they could take to the courts for approval.
"Delays in the ultimate resolution of claims . . . potentially could be very significant," Nortel said in a statement.
This would in turn delay payments of billions of dollars to any creditors who have already had claims approved for payment. There is no indication of just how long delays could be as the case moves through the courts.
Nortel had been given an extension of court protection until the end of June this year. The company went into bankruptcy in January 2009.
Nortel's total assets are just over $6 billion while a formal report put total claims at $35.6 billion.
The next major event will be an auction in June to sell off 6,000 Nortel patents; many of them generated in Ottawa labs. Google put in the first bid at $900 million.
