TerreStar Networks seeks fourth exclusivity extension to file plan

By Jim Witters

Wilmington, Del., Oct. 20 - TerreStar Networks Inc. is seeking a 60-day extension of its exclusive periods for filing and soliciting votes on a plan of reorganization, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The request, the fourth for TerreStar, would extend the exclusive period for filing a Chapter 11 plan to Dec. 20 from Oct. 21 and the exclusive period for soliciting acceptances to Feb. 17, 2012 from Dec. 19.

A hearing on the request is scheduled for 10 a.m. ET on Nov. 16. The court issued a bridge order Oct. 20 extending the exclusive periods until the judge makes a final ruling.

In its motion, TerreStar stated that it needs the extension to conclude negotiations on a Chapter 11 plan that would distribute about $155 million remaining from the sale of substantially all of the company's assets.

Gamma Acquisition LLC paid $1.345 billion for the assets. TerreStar used $975 million to pay down its secured debt obligations, which consisted of all of the debtors' obligations under the debtor-in-possession financing facility and a large portion of the debtors' obligations under the senior secured notes and the PMCA lenders.

The PMCA refers to a 2008 $100 million purchase money credit agreement TerreStar entered into with U.S. Bank NA as collateral agent for Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, LP and EchoStar Corp.

Through a second pay down, the debtors repaid about $144 million due under the senior secured notes indenture, according to the filing.

Extending exclusivity will "preserve the opportunity for unsecured creditors to obtain a meaningful recovery," TerreStar said in its motion.

"It would be a detriment to these Chapter 11 cases to permit any other stakeholder the opportunity to file a plan. Any competing Chapter 11 plan at this juncture in the debtors' cases would serve only to increase administrative expenses, reduce recoveries to creditors and jeopardize the advanced settlement and plan negotiations between the parties," the motion stated.

Based in Reston, Va., TerreStar is a holding company with subsidiaries that operate satellite-based digital mobile communications systems. The company filed for bankruptcy on Oct. 19, 2010. Its Chapter 11 case number is 10-15446.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.