Intelsat creditors object to shareholders’ attempt to form committee

By Sarah Lizee

Olympia, Wash., March 16 – Intelsat SA’s official committee of unsecured creditors objected to a motion from shareholders seeking to appoint an official committee of equity holders, according to a Tuesday filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.

The creditors committee said the appointment of an equity committee is an “extraordinary remedy and clearly unwarranted” in these cases.

Some holders of equity interests in the company had approached the U.S. trustee overseeing the case on three different occasions seeking appointment of an official equity committee, the unsecured creditors said.

In each case, the U.S. trustee declined to appoint an equity committee.

“Now, through a newly formed ad hoc committee of their own, the equity holders are seeking the same relief from the court,” the creditors committee said.

“The committee continues to maintain that the appointment of an equity committee is not warranted because, among other things, serious doubt exists as to the possibility of any recovery by the equity holders and the interests of the equity holders are already adequately represented in these cases.”

The informal group of equity holders had said in its motion that appointment of an equity committee is “vital to protect the interests of all equity holders because their interests have not been recognized, let alone protected, by any fiduciary or representative,” as previously reported.

“Such appointment is also mandated to further administrative efficiency because, without an equity committee, disparate equity holders ... would inevitably seek to intervene in and/or object to litigation, negotiation, mediation and plan confirmation, resulting in greater delay, confusion and costs than would result with an officially appointed committee in place and engaged.”

The group said that while the debtors initially opposed the appointment of an official equity committee, they now agree that they need to “conserve judicial resources” by providing for the disputes to be addressed on a timeline that will provide all stakeholders with a fair opportunity to advocate for their rights.

Intelsat is a Luxembourg-based satellite telecommunications company. The company filed bankruptcy on May 14, 2020 under Chapter 11 case number 20-32299.

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