One of Nortel’s largest creditors is moving to upset Nokia Siemens Networks’ bid for the bankrupt infrastructure giant’s valuable CDMA/Long Term Evolution assets. The creditor, MatlinPatterson, is working to submit a competing proposal that would restructure Nortel around its core wireless asset.

In a statement, the company said it wanted to retain the company’s inherent value “rather than merely accepting a ‘fire sale’ of its core asset followed by the wholesale liquidation of the remaining businesses.”

Nortel’s CDMA wireless assets drove profits at the company. Though its sales had been in decline, the segment still managed to earn about $700 million a year.

Nokia Siemens Networks’ bid for Nortel’s CDMA wireless assets and its LTE research unit was just $650 million. The offer was widely considered to be a lowball bid given the value of the assets.

Nokia Siemens’ spokeswoman Chantal Boeckman declined to speculate on MatlinPatterson’s announcement but reiterated that the company believed its bid was the “best possible outcome for Nortel, its customers and employees.”

Nortel spokeswoman Karen Monaghan also declined to comment. “Until a bid has been formally accepted and gone through the courts, it would be inappropriate to comment. Our focus remains maximizing the value of our businesses,” she says.

MatlinPatterson specializes in restructuring financially troubled companies and helped sort out the WorldCom debacle during the nineties. Although it has not released its formal strategy yet, it plans to make Nortel’s wireless assets the center of a smaller, leaner company.

MatlinPatterson plans to outbid Nokia Siemens and provide “a superior outcome for the company and all of its constituencies.”

The firm is currently working with other Nortel creditors to submit a competing proposal by the July 21 deadline imposed by the bankruptcy court.

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