Wireless Systems statement draws objection from creditor SmartSky

By Sarah Lizee

Olympia, Wash., Sept. 29 – Wireless Systems Solutions, LLC’s disclosure statement for its Chapter 11 plan of reorganization drew an objection from SmartSky Networks, LLC, according to court documents filed with the U.S. Bankruptcy Court for the Eastern District of North Carolina.

SmartSky holds a $12.99 million unsecured claim against debtor, arising from an arbitration award that was confirmed in federal district court on Feb. 7, 2022, finding the debtor liable for breach of contract, among other things.

“WSS entered bankruptcy six months ago while attempting to start from scratch with little more than high hopes for a new line of business. In the preceding 12 months, WSS had not realized even one penny of income from sales,” SmartSky said in its objection.

“But with less than $150,000 in the bank and no commitment for any future funding, WSS embarked on a Chapter 11 reorganization and confidently assured the court and all parties in interest that WSS would generate enough revenue to cover expenses while WSS continued efforts to develop all new products and find all new customers.”

SmartSky called debtor’s “unbridled optimism” unjustified, and said that as of Sept. 20, Wireless Systems had less than $500 in its debtor-in-possession bank account, to offset unpaid administrative expenses totaling more than $150,000.

The company currently has no binding commitment from any customer to buy anything, SmartSky added.

“Past performance proves WSS’s latest projections are the result of the same false hope that led to this bankruptcy filing in the first place, as opposed to any objective analysis of WSS’s actual financial results and realistic prospects for a successful reorganization,” SmartSky said.

“Consequently, the court should deny approval of WSS’s disclosure statement and deny confirmation of WSS’s plan.”

As previously reported, the disclosure statement has also drawn an objection from the bankruptcy administrator, which said it doesn’t provide enough information to creditors.

The company has received conditional approval of the disclosure statement. A further hearing was scheduled for Sept. 29. The plan confirmation hearing is scheduled for Oct. 12.

The Morrisville, N.C.-based cellular network solutions company filed Chapter 11 bankruptcy on March 9, 2022 under case number 22-00513.

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