The US Trustee, a division of the US Justice Department, has applied to Intelsat’s bankruptcy court asking for the court to rule that the “hundreds of millions” being held in associated locations, companies and banks must be added to Intelsat’s bankruptcy pile.
The Trustee is objecting to the current scheme. Intelsat has been approved to act as a “debtor in possession” while its Chapter 11 bankruptcy is managed. The Trustee wants to ensure that Intelsat’s funds held in Foreign Deposit Accounts are recognised as part of Intelsat’s overall assets in the bankruptcy.
The sums involved are not insignificant. The US Trustee says they total more than $869 million.
The Trustee’s filing to the court says: “The Debtors argue that the money market funds are ‘exceedingly low-risk’ but that does not mean no risk. Money market funds have failed before. Given the amount of money in the Investment Accounts, ‘low-risk’ represents a remarkable risk.”