Insurers for Nortel to Pay $228.5 Million to Settle Shareholder Suit

Telecom equipment maker Nortel Networks Corp. said on Friday its insurers have agreed to pay $228.5 million toward a proposed settlement of a shareholder lawsuit.

As part of the settlement announced in February, Toronto-based Nortel will make a payment of $575 million in cash, issue 628.7 million common shares, and contribute half of any funds it recovers from lawsuits against former senior officers who were fired in April 2004.

The proposed settlement was hinged upon several conditions, including insurance coverage.

Nortel said Friday it has also agreed to certain corporate governance measures.

Shares of Nortel slipped 1 cent, to close at $2.93 on the New York Stock Exchange.