Intelsat court dates set
December 6, 2022
By Chris Forrester
Judge Jeffrey White has set some key dates in the Intelsat ‘inside trading’ class action allegations. The judge has set the case to be “answered, or a Motion to Dismiss” on January 19th 2023. Any Opposition filing must be made by March 2nd with a subsequent response from the Petitioners set with a deadline of March 30th.
The next Motion to Dismiss hearing is set for April 28th in Judge White’s courtroom.
The complaint was originally mounted earlier this year but the judge dismissed the Federal Class Action but permitted the Plaintiffs to re-plead their case with more detail. The claim has been resubmitted to the US District Court in the Northern District of California. The Plaintiffs are asking for a jury trial.
The court has also asked for a ‘red line’ version of their motion and which was submitted on December 3rd.
The Class Action alleges in a 64-page filing to the court that the defendants gained their inside knowledge of an impending catastrophic piece of news, which was that Intelsat (and SES, which were working together on the C-band satellite frequency restructuring) would not be allowed to hold a private auction of their frequencies. Instead the FCC would hold a public auction of the frequencies, and compensate Intelsat and SES (and Eutelsat and Telesat) directly for handing over their frequencies.
Up until this meeting with the FCC on November 5th the C-Band Association members (notably Intelsat and SES) had expected to be granted permission to hold their own self-administered private auction of frequencies. Indeed, the submission to the court says that Intelsat felt it had a “handshake deal” in place with the FCC.
As the lead Plaintiff stated in its filing to the court, this is “the quintessential insider trading case” and the $246 million of shares sold represented a “fire sale” ahead of a collapsing value in Intelsat’s share price. The alleged insiders saved more than $185 million in losses as Intelsat later collapsed. That collapse started on November 8th (down 9 per cent) and continued to fall so that on November 18th alone Intelsat’s share price crashed 40 per cent, and 24 per cent on the 19th, and overall a 77 per cent tumble compared with that on November 5th when the $246 million-worth were sold by the defendants.
The Action is brought by Walleye Opportunities Master Fund and cites 16 named Defendants including Dave McGlade the then chairman of Intelsat.