TerreStar Networks wins two-month extension to exclusive plan periods

By Jim Witters

Wilmington, Del., Jan. 25 - TerreStar Networks Inc. received a two-month extension on Wednesday to its exclusive periods for filing and soliciting votes on a plan of reorganization, according to an attorney with knowledge of the case.

During a hearing in the U.S. Bankruptcy Court for the Southern District of New York, TerreStar also won approval of its settlement with Jefferies & Co., Inc., settling claims of more than $14 million.

Exclusivity extension

The ruling extended the company's exclusive filing period to Feb. 18 from Dec. 20 and the solicitation period to April 17 from Feb. 17.

As previously reported, all of TerreStar's major constituencies support the proposed plan filed in December, and allowing another stakeholder to file a competing plan at this point would deplete remaining estate resources and distract the company from the plan confirmation process.

Jefferies settlement

The stipulated agreement between TerreStar and Jefferies calls for Jefferies to receive stipulated claims of $1.7 million each against TerreStar Networks Inc. and TerreStar Corp.

The claim against TerreStar Networks will be treated as a general unsecured claim. The claim against TerreStar Corp. will receive in cash any remaining recovery TerreStar Corp. would be entitled to from an intercompany claim, up to $1 million, less any distribution to Jefferies from the TerreStar Networks claim.

"To the extent that these amounts do not equal $1 million, TSC will make a cash payment to Jefferies after the two distributions described above have been made so that Jefferies' total recovery is $1 million," the agreement states.

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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