More detail has emerged from Intelsat’s 195-page filing to its Chapter 11 bankruptcy court and addressing its plan to emerge from bankruptcy. Intelsat is looking for approval which would result in it cutting its debt obligations by about half from today’s near-$15 billion to $7 billion.
The statement to the court includes and outlines the SES claim for $1.8 billion against Intelsat and filed by SES on July 14th 2020.
The document says: “SES asserts that the Debtors owe money (or will owe money) to SES pursuant to certain alleged contractual and fiduciary obligations made in the context of the consortium agreement between Debtor Intelsat US LLC, SES, and other satellite operators (the “Consortium Agreement”).”
“SES alleges it is entitled to 50 per cent of the combined payments that may eventually be payable to the Debtors and SES pursuant to the FCC Order, which provides for Accelerated Relocation Payments subject to the satisfaction of certain deadlines and other conditions set forth therein. SES’s proof of claim alleges that the Debtors breached the Consortium Agreement by taking the position that the Debtors are not required to split Accelerated Relocation Payments with SES and the other members of the consortium. The proof of claim also alleges breach of fiduciary duties and unjust enrichment and seeks monetary and punitive damages. The Debtors [Intelsat, etc.] dispute the allegations in the proof of claim and, on October 19th 2020, filed an objection to the claim. To the extent that any portion of SES’s claim is allowed, the Debtors have requested that the Court equitably subordinate such claim based on SES’s misconduct,” states Intelsat.
“Further, even though the Debtors believe that certain agreements relating to the C-Band Alliance do not apply, have expired under their terms, or are no longer in force because their purposes have been frustrated, on December 7th, 2020, out of an abundance of caution, the Debtors filed a Notice of Rejection of Certain Executory Contracts and/or Unexpired Leases, by which they rejected certain agreements related to the CBA, including the Consortium Agreement,” adds the document.
The trial on the SES proof of claim has been scheduled to be heard by the Bankruptcy Court beginning on June 28th.
But Intelsat also cautions that while the ultimate resolution of the claim is not currently predictable, it warns that if there is an adverse court ruling against Intelsat, the ruling could have the effect of significantly diluting the recoveries of certain Holders of Claims against the Debtors.