Parties narrow issues in Intelsat Exit Plan

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The bankruptcy court in the Intelsat review and confirmation of its Exit Plan heard that a number of issues previously considered contentious have “been narrowed” according to Steven Serajeddini, a restructuring partner at Kirkland & Ellis, who are acting for Intelsat in the case.

The court heard that the parties want to wrap the discussions and evidence being heard this week, subject to Judge Keith Phillips and his ruling.

There will be an ‘omnibus’ hearing on January 11th where Intelsat will ask the court to approve its Debtor in Possession financing and exit plan borrowings.

Meanwhile, Judge Phillips has paused the legal action in the hope that further harmony and agreement can be established.

The court heard evidence on December 13th from Ruth Milkman, a former senior staffer at the FCC (and who was Chief of the FCC’s Wireless Bureau) who gave her opinion that despite ‘Intelsat Licence LLC’ appearing frequently in FCC documentation, in reality it was Intelsat SA which held the FCC C-band licences to operate over the US, and as the decision maker had the unique ability to deliver the restructuring of frequencies.

“Intelsat SA is the ultimate parent company of the companies which hold the licences and owns the satellites,” she stated, “It is the decision maker and is the entity which should receive the Accelerated [FCC funds].”

However, Milkman’s evidence was challenged insofar as this was apparently the first time that she had been asked to give an opinion on a case where the parties were in bankruptcy.

Last week, the court received a submission from a Luxembourg lawyer alleging that Intelsat could be guilty of ‘actio pauliana’, which translates as meaning ‘designed to protect creditors from fraudulent legal transactions’.

That allegation was rebutted on December 13th by a different Luxembourg lawyer, Prof. Denis Philippe, who submitted to the court that the key requirements of an ‘actio pauliana’ ruling were not present.

He stated: “Based on the materials I have considered, it is my opinion that the doctrine of actio pauliana does not invalidate the release of the Parent Guarantees under Luxembourg law. There has been no showing of an impoverishment, prejudice, or fraud, as required under the doctrine of actio pauliana.”

The courts will decide which version to admit.


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