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Objection to debtor’s strategy
(Reuters) – Intelsat SA is struggling with increasing opposition to its proposed reorganization strategy as sure collectors and shareholders accuse the satellite communications company of caving to the requires of a single favored creditor team and failing to perform an impartial probe into pre-bankruptcy transactions.
In court papers submitted on Monday, a team of noteholders urged U.S. Bankruptcy Choose Keith Phillips in Richmond, Virginia to reject the prepare, expressing it improperly shifts most of the company’s worth to 1 set of collectors and institutional shareholders, including hedge fund Appaloosa, at the expenditure of other individuals.
The system, if accepted, would cut Intelsat’s financial debt from $15 billion to $7 billion and hand management of the organization around to unsecured bondholders of subsidiary Intelsat Jackson Holdings SA.
Intelsat filed for personal bankruptcy in Could 2020 to restructure its financial debt as it geared up to transfer some of its C-band spectrum to the U.S. Federal Communications Commission. In trade, Intelsat is acquiring about $4.9 billion.
The noteholder group also accused administrators that signed off on the prepare of currently being conflicted and settling particular claims to guard them selves against probable liability arising from pre-individual bankruptcy transactions, together with restructuring offers, conclusions relating to the FCC payments and accusations of insider buying and selling. The noteholders allege that the directors agreed to the “favored” creditor group’s calls for following it threatened to sue them individually.
“The [Intelsat] Board was scared into submission,” the team explained.
Intelsat competitor SES Americom Inc, which states Intelsat owes it $421 million beneath an arrangement to split the FCC payments, also filed an objection. SES argues that the U.S. device with which it signed the arrangement is central to the company’s general functions and is entitled to much extra than the 4.5% of the FCC payments that it is established to acquire beneath the program. A bigger chunk of the FCC payments would result in increased payouts to SES, which states it is at present in line for pennies on the dollar.
SES echoed the noteholder group’s allegations that the administrators making decisions about the prepare were conflicted.
A tiny group of equity holders, whose pursuits will be wiped out beneath the strategy, objected to the plan, indicating it ignores chances to convey in additional price. The group also challenged the plan’s proposed lawful protections for officers and directors.
A listening to on the approach is established to commence on Dec. 2.
The situation is In re Intelsat SA, U.S. Personal bankruptcy Court docket, Eastern District of Virginia, No. 20-32299.
For Intelsat: Edward Sassower, Steven Serajeddini and Aparna Yenamandra of Kirkland & Ellis and Michael Condyles, Peter Barrett, Jeremy Williams and Brian Richardson of Kutak Rock
For the noteholder group: Kristopher Hansen, Daniel Fliman,
Sayan Bhattacharyya, Patrick Petrocelli and Isaac Sasson of Stroock & Stroock & Lavan Duane Loft of Boies Schiller Flexner and Jason Gold and Dylan Trache of Nelson Mullins Riley & Scarborough
For SES Americom: Orin Snyder, Michael Rosenthal, Brian Lutz, and Christopher Belelieu of Gibson, Dunn & Crutcher and Dennis Lewandowski of Kaufman & Canoles
For the equity team: Harold Kaplan, Mark Hebbeln and Susan Poll Klaessy of Foley & Lardner and David Kovel of Kirby McInerney
Intelsat decide aims to hold off critical individual bankruptcy plan listening to