ProtoStar makes wholesale changes to plan of reorganization, statement

By Caroline Salls

Pittsburgh, Aug. 2 - ProtoStar Ltd. filed an amended plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the District of Delaware that changes the proposed distribution for several creditor classes.

According to the disclosure statement, the amended plan also reflects the $185 million sale of its ProtoStar II Ltd. assets and a global settlement that resolves lien avoidance actions.

Under the amended plan:

• Holders of priority claims will be paid in full in cash, as under the original plan;

• Holders of noteholder claims will receive a share of cash, minus amounts required to fund administrative expenses, PS I priority claims and unsecured cash, a disputed claim contribution, PSI additional funds and PSI litigation trust interests.

Under the previous plan, these creditors were classified as PSS secured claimants and slated to receive trust A interests;

• Holders of CS facility claims will receive a share of PS II cash, minus amounts required to fund administrative expenses, PS II priority claims and unsecured cash, a disputed claim contribution, PS II additional funds and PS II litigation trust interests.

Under the previous plan, these creditors were classified as PSS secured claimants and slated to receive liquidating trust interests;

• Holders of ProtoStar unsecured claims will be paid in full in cash instead of receiving liquidation trust interests;

• Holders of PS I general unsecured claims will receive a share of PS I unsecured cash and litigation trust B interests. Under the previous plan, these creditors would have received litigation trust A interests;

• Holders of consolidated PS unsecured claims will receive a share of unsecured cash. Under the old plan, these creditors would have received liquidating trust interests;

• Holders of equity interests will receive no distribution; and

• Holders of intercompany claims will receive no distribution. Previously, these creditors were slated to recover collateral proceeds.

The disclosure statement hearing is scheduled for Aug. 26.

ProtoStar, a Bermuda satellite company, filed for bankruptcy on July 29, 2009. Its Chapter 11 case number is 09-12659.

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