Advanced Television

SES vs Intelsat week 2 update

February 16, 2022

The hearing of the litigation between SES and Intelsat in front of Judge Keith Phillips is now well into its second week. The dispute concerns the division of FCC ‘incentive’ payments. SES is claiming 50 per cent of the FCC’s allocation of payments, plus damages against Intelsat..

One of the many Intelsat lawyers on the case, Mike Slade, spent February 15th examining Intelsat’s Michelle Bryan (General Counsel) on her explanation for many of the elements of the C-Band Alliance (CBA) and in particular the Alliance’s Consortium Agreement. She was questioned on the highly detailed Agreement and how the market-based approach would work. At the end of the day the FCC stepped in with its own plans and the market-based scheme died. However, the Agreement between the parties was fundamental in how SES saw its claim for a 50 per cent share of the FCC’s payments. SES and Intelsat controlled the CBA.

A key element under examination during the day was which Intelsat entity was a party to the CBA agreement. SES has argued that all of the Intelsat sister companies and subsidiaries as well as any Intelsat businesses which had issued debt were in essence parties to the core Agreement even though many of them had separate Boards of Directors.

Slade asked Bryan whether the 50/50 agreement included all of the Intelsat companies, and she answered “No”. She told the court that the 100-page Consortium Agreement was never signed, however one element of the document was an ‘Escrow Agreement’ which talked inclusively of ALL the parties being included.

The FCC, in its Rule Making order, took over the tasks outlined by the CBA and the Consortium Agreement died along with its market-based proposals. The trial continues.

However, on February 15th lawyers for Intelsat issued its Fourth Amended plan covering the exit from Chapter 11 bankruptcy for Intelsat SA and its debtor affiliates. This 909-page documents fine tunes Intelsat’s exit plan and explains its new financial structure. Intelsat is expected to exit bankruptcy within a matter of days.

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