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TerreStar to settle Jefferies advisory services claim for $1 million
By Caroline Salls
Pittsburgh, Jan. 5 - TerreStar Networks Inc. requested court approval of a financial advisory services claim settlement reached with Jefferies & Co., Inc., according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.
The company said Jefferies has filed potential $14 million claims against TerreStar Networks and TerreStar Corp.
Under the proposed settlement, Jefferies will be granted a stipulated TerreStar Networks claim and a stipulated TerreStar Corp. claim, each in the amount of $1.7 million.
However, Jefferies will only be entitled to recover a total of $1 million on account of the stipulated claims.
According to the motion, the claim against TerreStar Networks will be treated as a general unsecured claim in the amount of $1.7 million.
In exchange for the TerreStar Corp. claim, Jefferies will receive any remaining cash recovery that TerreStar Corp. would be entitled to receive from an intercompany claim, up to $1 million minus the distribution that Jefferies receives from the stipulated TerreStar Networks claim.
To the extent that these amounts do not equal $1 million, TerreStar Corp. will make a cash payment to Jefferies after the two distributions have been made so that Jefferies' total recovery is $1 million.
TerreStar Networks said it will only have to make a $104,380 cash distribution to Jefferies on account of its stipulated claim.
A hearing is scheduled for Jan. 25.
Based in Reston, Va., TerreStar Networks 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.
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