Advanced Television

Intelsat: “Widespread but fragile consensus” achieved

September 2, 2021

In another day of significant motions filed into Intelsat’s Chapter 11 bankruptcy reconstruction proceedings, one 44-page document explained Intelsat’s current position regarding objections filed by other litigants. Another, consisting of 325 pages, adds further details while a 170 page document covers the formalities of Intelsat’s potential exist plan. SES has a similar suite of filings. As always, it is the lawyers who win…

Intelsat’s lawyers explained to the court in its Omnibus response that its Amended [Exit from bankruptcy] Plan was a “major victory” in its move to reconcile the “modest economic gap” between some of the objecting litigants. “Now, the Debtors and holders of nearly 75 per cent (or $11 billion) of the Debtors’ nearly $15 billion capital structure (so far) including both the Jackson Crossover Ad Hoc Group and the HoldCo Creditor Ad Hoc Group, all support the Amended Plan.”

“The consensus achieved to date in these complex Chapter 11 cases is remarkable given the incredibly rigid positions that parties have taken over the past year. The Debtors are now poised to commence solicitation and bring these cases one step closer to their ultimate conclusion,” stated the submission to the court.

Key to the document is Intelsat’s position in regard to SES and its various actions over its $1.8 billion claim in connection with the FCC’s incentive payments and where Intelsat argues that its has issued the court with plenty of additional information.

Intelsat says: “The Debtors have added a description of SES’s view of its probability of success on its $1.8 billion Proofs of Claim, its view of the potential impact thereof on these chapter 11 cases, and information on recoveries if SES’s Proofs of Claim are ultimately:

(i) allowed in full,

(ii) allowed against all Debtors, and/or

(iii) is classified separately from unsecured claims.

The Debtors have carried through this discussion to the summary of expected recoveries. The Debtors also included a discussion on the impact of the allocation of value under the Amended Plan on general unsecured claims against individual Debtors as well as further information regarding SES’s arguments on those issues.

One of the strongest objectors is the US Trustee who said that the “28 Day” rule had not been followed in the bankruptcy action. Intelsat says: “The US Trustee argues that the revisions to the Amended Plan and the Amended Disclosure Statement are substantial enough that the 28-day requirement regarding a new disclosure statement should be applicable here. This is simply not the case. The Debtors made clear when they filed the Mediation Motion, what the open issues where between the parties to the current Amended Plan Support Agreement, and the Debtors were intent on resolving those open issues. Those issues have been resolved, and, accordingly, the distribution of consideration and other key terms provided in the February 12th version of the plan were modestly adjusted to reach the terms reflected in the Amended Plan.”

The various arguments concerning the Disclosure Statement from Intelsat were scheduled to be heard on September 1st. If approved by the court Intelsat is proposing a Confirmation Hearing to be scheduled for October 25th.

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