SES: “Intelsat board deeply conflicted”

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SES, in a motion submitted to Intelsat’s bankruptcy court, alleges that Intelsat is continuing to “disregard” the role and importance on Intelsat US as the rightful recipient of the FCC’s C-band incentive payment of more than $4 billion (€3.55bn).

The problem – which the bankruptcy court has yet to rule on – is the dozens of subsidiary and sister companies which have ‘Intelsat’ in their names and thus confusion as to which of these entities might actually end up receiving the FCC’s huge compensation payments.

SES, in its motion, says: “[…] determining which Debtor entity is entitled to the Accelerated Relocation Payments available for clearing the C-Band spectrum is central to this case. The FCC’s March 2020 order and the legal framework supporting it provide a clear answer: Intelsat US, the entity actually doing the work necessary to transition its customers and earn the Accelerated Relocation Payments, is the entity entitled to the payments.”

“Yet in each of the three Chapter 11 plans Debtors have proposed, they have allocated Intelsat US little or none of the Accelerated Relocation Payments. That would be astonishing if anyone at Intelsat US were actually protecting its interests, but it makes perfect sense in light of extensive evidence that Intelsat US’s board of managers is deeply conflicted and did nothing to assert (or even identify) the best outcome for Intelsat US,” argues SES.

“Since SES filed its Motion eight months ago, [Intelsat’s] disregard for Intelsat US as a distinct entity has only become more apparent. The evidence demonstrates that the individuals charged with advocating for Intelsat US not only failed to do so, but were often unaware that any such duty even existed,” states the SES motion.

The motion continues: “And while other [Intelsat] entities with conflicted officers and directors appointed special committees and retained outside assistance to serve as fiduciaries and maximise the outcome for one particular entity, Intelsat US’s board of managers never even met. The results speak for themselves: despite Intelsat US’s status as Debtors’ primary operating entity and revenue generator, the Second Amended Plan awards Intelsat US just 4.5 per cent of the Accelerated Relocation Payments, and recovery to Intelsat US’s unsecured creditors will be just 3.07 per cent.”

SES is arguing for an extra $421 million, plus punitive damages, in its claim against Intelsat US. However, if the court determines that some other ‘Intelsat’ entity is permitted to get its hands on the FCC’s $4 billion then SES could receive next to nothing.

“And in order to prevent this patently unfair treatment of Intelsat US from happening again, this Court should grant SES’s Motion and allow SES to assert Intelsat US’s entitlement to the Accelerated Relocation Payments,” says SES.

SES is asking the court to deny Intelsat’s Exit Plan confirmation. The court hearing is scheduled to start on December 2nd.


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