Terrestar settlement gains approval (1 Viewer)

CK SatGuy

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Formerly ckhalil18
Feb 7, 2011
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From the Wall Street Journal:

TerreStar Networks Inc. won bankruptcy court approval of its wide-ranging settlement with its bondholders and new owner Dish Network Corp (DISH), allowing the satellite company to move forward with its Chapter 11 plan.

Judge Sean H. Lane of the U.S. Bankruptcy Court in New York approved the deal Thursday, which includes a plan to pay noteholders $128 million and settles a disagreement with Lightsquared Inc. over voice and data minutes by allowing two unsecured claims for $35 million and $5.99 million.
TerreStar's deal with Sprint Nextel Corp. (S), reached in early November, settles a dispute over $104 million in bandwidth fees that Sprint said it was owed by both TerreStar Networks and DBSD North America Inc., which Dish Network also bought at bankruptcy auction.
The full details of the agreement are confidential but, according to court papers, Sprint has agreed to accept no more than $20.6 million to settle the claims--$18 million immediately and $2.6 million from TerreStar's Chapter 11 payout.

The settlement still needs approval from the Federal Communications Commission.
To that end, TerreStar filed a motion Friday asking Lane, the bankruptcy judge, to extend its Chapter 11 plan exclusivity period until Feb. 18 along with its sole right to solicit acceptance of a plan until April 17. This request, if approved, would be the fourth time the deadline has been pushed back in TerreStar's year-long bankruptcy case.
Dish Network purchased TerreStar, which is trying to build the first satellite smartphone, for $1.38 billion this past summer, paying creditors much more than a prior reorganization proposal. In a separate auction a week later, Dish Network paid $1.4 billion for DBSD, which was double the amount that the company was valued under a previous plan and paid creditors in full.

The deals gave Charlie Ergen, who also owns Echostar Corp. (SATS) in addition to Dish, control of the companies' wireless spectrum.

While TerreStar has distrubuted some of the sale proceeds to senior creditors, it says it needs more time under bankruptcy because it can only distribute the remaining proceeds to unsecured creditors upon confirmation of its plan.
"If competing plans were proposed at this time, such plans would delay the debtors' emergence and could significantly jeopardize the recoveries to unsecured creditors" by depleting the remaining bankruptcy estate resources, according to court papers. The company says it has $31 million to distribute to unsecured creditors.
TerreStar Networks filed for Chapter 11 protection in October 2010 with a plan calling for secured noteholders to swap more than $850 million in debt for nearly all the equity in a reorganized TerreStar. More junior creditors, however, would have gotten just pennies on the dollar. Existing equity holders would have received nothing. The Reston, Va., company scrapped that plan earlier this year in favor of the auction.

TerreStar Settlement Gains Court Approval - WSJ.com
 

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