Back in 2013, Israeli satellite operator Spacecom (which owns the AMOS craft) and Intelsat agreed a mutually-acceptable frequency coordination of the pair’s various satellites focusing on Spacecom’s AMOS craft at 65 degrees East.
Intelsat’s affected satellites were at 62, 64, 66 and 68.5 degrees East. Intelsat agreed to compensate Spacecom with an annual payment of $650,000 as a Coordination Fee.
Of course, with Intelsat declaring Chapter 11 bankruptcy reconstruction on May 13 2020 all such agreements, leases and other contracts are formally “rejected” by the Court and this included the Spacecom agreement.
Nevertheless, Spacecom has been pursuing its claim for payment and arguing that its claim should be treated as an “administrative expense” and thus treated as a priority ahead of other creditors.
A filing on October 13th with Intelsat’s bankruptcy court lists and explains the attempts made by Intelsat to resolve the problem especially as an alternative to litigation. But now, “with confirmation in less than a month” [and where Intelsat anticipates its Exit Plan being accepted] “there is no basis for adjudicating the Spacecom dispute ahead of confirmation,” states Intelsat’s lawyers.
However, not helping matters is the phrase in the Intelsat document which says: “in pursuit of certain business opportunities that are not of material value to the Debtors anymore.” In other words, Intelsat is no longer interested in the frequency coordination once agreed with Spacecom.
Intelsat says, in any event, “Spacecom does not, and cannot, establish that its asserted claim is entitled to administrative expense priority because (a) the Spacecom Agreement is subject to the pending Rejection Notice and if the rejection is approved as contemplated, there can be no valid administrative claim, and (b) Spacecom has failed to meet its burden of proof establishing it is entitled to an administrative expense claim as an actual and necessary cost of the Debtors’ estates.”