When a technology company goes bankrupt and divests its assets, where does all the money go?

That's the question that is now being asked of Nortel Networks. Nortel once a high-flying telecommunications and networking vendor declared bankruptcy in January of 2009. The company has been divesting its assets ever since, generating billions.

Though Nortel has been able to sell off its business units, it is unclear as to who will be paid as a result.

"Nortel Networks Corporation announced that the mediation process that had been commenced in respect of the allocation of sale proceeds of Nortel's various business and asset divestitures and other inter-estate matters, including inter-company claims, has ended without resolution of the matters in dispute," Nortel stated in a press release.

Nortel has been engaged in creditor protection proceedings to determine how funds are to be allocated. According to Nortel, mediation sessions were first held in November 2010 and again from April 11 to April 13, 2011.

"In light of the unsuccessful conclusion of the mediation process, delays in the ultimate resolution of allocation and inter-company claims matters potentially could be significant," Nortel stated. "Such delays would result in a corresponding significant delay in the timing of distributions to holders of validated claims of the various estates."

Nortel has been successful over the past two years at generating funds from its bankrupt operations. Nortel's wireless assets were sold to Ericsson for $1.13 Billion in July of 2009.

Nortel sold off its enterprise business unit to Avaya in September of 2009 for $900 million.Ciena acquired Nortel's Carrier Ethernet and optical units for $769 million in November of 2009.

Nortel has been engaged in creditor protection proceedings to determine how funds are to be allocated. According to Nortel, mediation sessions were first held in November 2010 and again from April 11 to April 13, 2011.

"In light of the unsuccessful conclusion of the mediation process, delays in the ultimate resolution of allocation and inter-company claims matters potentially could be significant," Nortel stated. "Such delays would result in a corresponding significant delay in the timing of distributions to holders of validated claims of the various estates."

Nortel has been successful over the past two years at generating funds from its bankrupt operations. Nortel's wireless assets were sold to Ericsson for $1.13 Billion in July of 2009.

Nortel sold off its enterprise business unit to Avaya in September of 2009 for $900 million.Ciena acquired Nortel's Carrier Ethernet and optical units for $769 million in November of 2009.