Former technology titan Nortel Networks Corp. filed for bankruptcy protection Wednesday, a move that will likely see what was once Canada's great corporate success story broken up and sold to foreign rivals.

“It is an iconic Canadian name and there will be a great national grieving over this,” said one person familiar with Nortel's plans.

The court filing will come as a shock to the company's bondholders, who had expected Nortel to pay its debts this week. Shareholders will likely see their holdings all but wiped out.

As a consequence of filing for protection, Nortel can expect to lose significantly more business, potentially sending the company into a death spiral, analysts say.

In addition to selling the Ethernet unit, divisions that could go on the auction block include the carrier networks unit, which sells gear to phone companies, and the enterprise division that sells telecom equipment to businesses. Potential buyers for these units are all foreign: Nokia Siemens Networks, Telefon AB LM Ericsson, Cisco Systems Inc. and China's Huawei Technologies Co. Ltd.