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Former Nortel CEO claims company owes him $12M

Posted October 9, 2009

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— Mike Zafirovski, who resigned as bankrupt Nortel’s chief executive officer in August, is seeking more than $12 million from the company.

In a filing with the federal court handling the Nortel bankruptcy proceedings in the U.S., Zafirovski said he is due the money under terms of an employment contract signed in 2005.

The claims:

  • $2.4 million in base salary, the equivalent of 24 months
  • $3.6 million bonuses due under Nortel’s compensation plan
  • $200,543.48 in pro-rate bonus for the third quarter of 2009
  • $50,000 in health, life and accidental death and dismemberment insurance benefits
  • Not less than $6 million in lump sum “present value” of a $355,000 per year single life annuity pension benefit
  • Total: “Not less than $12,250,543.48.”

Zafirovski, who was hired from Motorola to rebuild the company but ended up leading it into bankruptcy and dismemberment, also is seeking indemnification from a class action lawsuit filed against Nortel.

When Zafirovski and several board members, including former N.C. Gov. Jim Hunt, resigned in August, Nortel said Zafirovski would receive no severance.

Nortel ceased making severance payments to former employees when it declared bankruptcy in January.

A resident of Illinois, Zafirovski filed the claim through a lawyer with the firm Vedder Price in Chicago.

The filing was made near a deadline set for such actions by the bankruptcy court.

According to an Ottawa Citizen newspaper report, numerous other current and former Nortel executives made claims, including Joel Hackney who leads the Enterprise business unit. Hackney is based at Nortel’s RTP campus where some 1,700 people work.

Nortel is in the process of auctioning off its business units.

Meanwhile, in Canada, hundreds of Nortel retirees protested to the government about the threat the bankruptcy poses to their pensions.

"The corpse is being cut up, dissected, and handed all around," Eddie Halpin, 70, told the Toronto Star. "They are taking the money and running."

76 Comments

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  • james27613 Oct 9, 2009

    Where do all these Ex-Ceo's go to enjoy their time off,
    play some golf with the other Ex-Ceo's and do lunch ?

    Midway stiffed the workers when they filed BK on a Friday
    night, no different then what Nortel is doing so no money
    for MR CEO Failure.

  • james27613 Oct 9, 2009

    Tell him to get in line with the rest of the creditors.

  • CB123 Oct 9, 2009

    I guess you can't have much faith in a company staying too long when the entry signs to the facility are just trailers with the wheels removed!

  • Daisygirlforever Oct 9, 2009

    Anyone who has worked for Nortel will laugh their bottoms (GOLO appropriate word) off. This guy devastated thousands of people's lives by incompetently managing Nortel. I agree with LadyBlue....pay back some of those who lost their retirement savings with that 12 million. PERSONAL ACCOUNTABILITY.....it is a dying word in our society.

  • NCPACKER Oct 9, 2009

    What is with (I will not refer to them as leaders) the executives today? THey all think they are due everything.

    Look, this stupid fool drug Nortel down even further. If he was a good leader and manager (CEO material, which he obviously is not), then he would have made the company profitable, hence, been employed and made money that is due to him. HOwever, this bozo leads the company downward to bankruptcy. If they stopped paying employee bonuses; why shouldn't the stop paying his? I don't care what the employment agreement states, it should be null and void during a bankruptcy and hte company selling off all assets.

    And what is this $50k in life and AD&D. Did you die you stupid moran? This guy is a joke. Maybe he should not have flew from Chicago to RDU every week and watched expenses. Get lost you stupid fool!

    But in the interim, I invite him back to RTP for an old get together with the former employees of Nortel. I am sure they have some ideas and recommen

  • rgsims Oct 9, 2009

    I think we should all get together and sacrifice our already depleted savings and raise 12 million for this poor soul!

  • dws Oct 9, 2009

    "Give him the 12 million in cash , set his behind in the middle of Detroit or RTP alone and let the people know he's there."

    maybe he'll have Hackney as a bodyguard

  • tab580642 Oct 9, 2009

    The audacity of these CEOs!!! This man needs to get lost!!! He presided over a company that failed during his watch and he still thinks that he's owed money??? The should throw not only this case out, but him too (physically)!!!!

  • samdutes Oct 9, 2009

    Workerbee.......I care about as much for Paul Stern as I do for the Z-man, but Stern was directed by the BOD to get our stock price up, which he did by almost killing the company. Monte came in and cleaned up most of what Stern did and turned it over to Roth and we went down hill from there......

  • WRALblows Oct 9, 2009

    The man thinks he has class. In reality his pretencious arrogance clouds his mind with delusions of self worth far greater than any actual contribution.

    Everyone should aspire to be a CEO. Sign up, utterly fail, cash out for multi-millions and ask for immunity. That's the repeating story.

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