Jonathan Nelson, the CEO of Providence Equity Partners, was recently on the front cover of Fortune. The headline was: "The Biggest Deal Ever."

Unfortunately, that deal – the $52.9 billion buyout of BCE (NYSE: BCE) – is imploding.

Of course, one big issue has been the grueling credit crunch. Simply put, US banks are trying to bolster their balance sheets – not take on risky loans.

And, today we learned about another pesky problem; that is, the Quebec Court of Appeal ruled in favor of BCE's bondholders to stop the deal (they thought they were getting a raw deal).

Actually, it was a surprising decision (but strange things can happen with mega deals). While it's possible that BCE will prevail, it might be a pyrrhic victory. Basically, the more time that passes, the harder it is to close the deal. In other words, to salvage things, BCE may have to renegotiate the price (which would put less pressure on bondholders).

So far in today's trading, BCE's shares are down 13% to $32.74.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.