Nortel’s quest to sell itself piecemeal in the midst of ongoing Chapter 11 bankruptcy proceedings continued this week, as the financially-strapped telecom equipment maker agreed to sell its enterprise division to Avaya, Inc. for $475 million. The unit covered by Monday’s deal provides network systems and services for business customers. Like Nokia Siemens’ earlier $650 million bid for Nortel’s CDMA wireless operations, the offer by New Jersey-based Avaya constitutes a “stalking horse” arrangement which permits Nortel to accept Avaya’s initial offer in a process that would allow other parties to submit higher bids. The court’s deadline for alternative bids on Nortel’s CDMA assets passed on Tuesday, with MatlinPatterson, Nortel’s largest bondholder, besting Nokia’s offer with a higher bid of $725 million. In an open letter to other Nortel stakeholders, MatlinPatterson—a New York private equity firm that holds 10% of Nortel’s debt—said it would pursue Nortel’s other assets with the goal of preserving the company intact if its offer for the CDMA unit is accepted. Swedish telecom equipment maker Ericsson also reported to have joined the fray with a competing bid. All three bids will be considered in an auction that is scheduled to take place today. Meanwhile, a prospective fourth bidder, Canada’s Research-in-Motion, said it was prepared to offer $1.1 billion for the CDMA unit but claimed it was shut out of the bidding process by Nortel. Responding to the accusation, a Nortel spokesman explained that RIM had “refused to comply with court-appointed procedures,” as he expressed confidence that “an active auction will result in maximizing the value of Nortel’s assets.”