The US Trustee, which is supposed to protect smaller shareholders and investors, has determined that an equity committee of common shareholders with Intelsat stock was not needed at this time but that it reserved the right to revisit the issue in the future as the bankruptcy continues.
Seventy-three shareholders had combined (with some 2.3 million shares) to write to the US Trustee asking that an equity committee be created to look after their interests during Intelsat’s Chapter 11 bankruptcy protection.
The letter from the small shareholders said: “[Intelsat’s] management deliberately defaulted on a debt payment when they had the cash on hand to pay. They also stated that the bankruptcy was only necessary to acquire a bridge loan that would allow the company to move forward on a lucrative 5G FCC contract. After filing for bankruptcy, management revealed that they had sourced the bridge loan internally, but now wished to use this opportunity for a full restructure. Wiping out shareholders would seem to be management’s logical next step – given such a lack of transparency.”