Nortel Networks Corp. has appealed to a French commercial court on Monday, seeking approval for liquidating one of its two auxiliary units in France, as the biggest telephone equipment maker of North America staggers under bankruptcy.

The court in Versailles will pass the ruling on Thursday, deciding the fate of Nortel’s yet another attempt along the way to swim out of bankruptcy.

“This is intended to allow Nortel Networks SA to rapidly reduce its costs while continuing to trade,” said Nortel in a statement. And this subsidiary will abide by its current contracts with customers.

However, Nortel Networks France will operate under court protection.

Nortel sought bankruptcy protection in the U.S. and Canada in January and in London for its European subsidiaries, after it swung into $5.8 billion loss last year as phone companies restrained spending to deal with the slowing economy.

The pending liquidation of the French subsidiaries jeopardizes anything between 500 and 700 jobs in the company''s global research and development division, reports La Tribune, a French newspaper.

With the onslaught of economic downturn, once a highflying company, Nortel struggled with slumping sales as phone carriers such as Sprint Nextel Corp. postponed network upgrades. And other customers switched from Nortel’s older technology, seeking faster products from rivals like Cisco Systems Inc.