Nortel Networks have file for Chapter 11 bankruptcy protection today.

Nortel's management team has been trying to cut spending. The company has also put some of its assets up for sale in an attempt to survive. But mounting debt payments and a steep drop in revenue appears to have caught up with the company.

While bankruptcy protection doesn't always mean the end for a company, in today's economic climate, it could prove disastrous as the already-struggling company may find it even more difficult to convince customers to buy its gear. Nortel has about $2.6 billion in cash, which some analysts have said could help it stay afloat until at least 2010. But as the company sinks deeper into trouble, many experts believe that Nortel will likely be broken apart during a Chapter 11 restructuring with individual businesses sold off one by one, wiping out shareholders.

In December, the New York Stock Exchange warned it would delist Nortel's stock if it couldn't get its stock to trade above $1 minimum. Nortel is currently trading at 32 cents.

By: DocMemory
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