The long-running bankruptcy saga of the Canadian telecoms group Nortel Networks looks likely to drag on into its eighth year, after creditors failed to reach agreement in a mediation session over the distribution of pensions and other assets, according to people familiar with the process.

The creditors are fighting over the $7.3 billion raised when Nortel patents were sold in 2011. At issue is a ruling by US and Canadian bankruptcy courts last May that the US bondholders argue unfairly disadvantaged them.