Video, voice and data-networking vendor Ciena has emerged as the front-runner to acquire Nortel's optical networking and carrier Ethernet business, parts of its showpiece Metro Ethernet Networking (MEN) unit.
Nortel initially put its MEN business on the market in September 2008, four months before it filed for Chapter 11.
Unfortunately for Nortel the sale came at the same time as the onset of the financial crisis, and attracted no interest. Later on, it took the profitable unit off the market so that it could develop its - ultimately doomed - restructuring plan.
The MEN business was expected to fetch up to $1bn for Nortel. It is not yet known how much Ciena is prepared to pay or how much Nortel wants.
In a statement, Ciena said: "The outcome of these discussions is uncertain and subject to negotiation of definitive agreements. Any agreements would be subject to a competitive bidding process under the United States Bankruptcy Code and the Canadian Companies' Creditors Arrangement Act."