Nortel Networks, the big multibillion-dollar Canadian telecommunication equipment house whose fall from grace has been long in the making, filed for bankruptcy protection in both Canada and the states Wednesday morning.

The petitions include a certain number of its Canadian and US subsidiaries, such as Nortel Networks Capital.

In a statement CEO Mike Zafirovski said, "Nortel must be put on a sound financial footing once and for all."

The company made its move, rumored since December, ahead of a $107 million bond interest payment falling due. It owes bondholders upwards of $3.8 billion in total and has only $2.4 billion in the kitty.

The downturn and competition are supposedly to blame. Demand for the company's voice-only telecom network equipment reportedly started evaporating last year. It needs to slash costs and sell unidentified assets, necessity complicated by the credit freeze.

Its stock is also facing delisting on the New York Stock Exchange because it hasn't been able to maintain the dollar-a-share cutoff. The AP remembers that at one point in 2000 it accounted for one-third of the value of the Toronto Stock Exchange with a market cap of $250 billion and 95,000 employees. It is now worth less than $160 million and has 26,000 people.

Nortel may be down for the count. The Toronto Globe and Mail suggests it may be broken up and sold off piecemeal.

It's feared Nortel may be only one of a string of companies forced into bankruptcy relief before this recession is over.