Intelsat bankruptcy judge denies equity call for examiner

(Reuters) – The choose overseeing satellite operator Intelsat SA’s individual bankruptcy has turned down a ask for by a group of equity holders to convey in an unbiased examiner to look into statements of probable mismanagement and other ways to convey in extra income for lenders that they say the firm has overlooked.

U.S. Personal bankruptcy Decide Keith Phillips in Richmond, Virginia issued his ruling for the duration of a virtual hearing on Wednesday, about 40 days ahead of he is established to contemplate Intelsat’s proposed reorganization plan for acceptance. The decide explained he did not think there was adequate time just before the affirmation listening to for an examiner to perform a meaningful investigation.

Beneath the system, Intelsat, represented by Kirkland & Ellis, would reduce its personal debt from $15 billion to $7 billion and hand handle of the firm around to unsecured bondholders of subsidiary Intelsat Jackson Holdings SA. The prepare is opposed by yet another team of bondholders.

The fairness team, which represents about 2{2099cc1b97d4d5af6b378c51833a8c0e04bb5da587377bd6b2cb473fa3104767} of Intelsat SA shareholders, experienced argued that the plan is improperly designed solely for the profit of the Intelsat affiliates’ creditors, somewhat than collectors and shareholders of the mum or dad entity. The group, represented by Kirby McInerney and Foley & Lardner, stated an examiner really should be brought in to investigate tax advantages and prospective mismanagement statements towards executives, amongst other parts of probable benefit, that could improve recoveries to lenders of Intelsat SA.

The business, on the other hand, explained it was also late in the match to provide an examiner. Phillips agreed, stating he did not consider an examiner would have sufficient time to get up to velocity before the Nov. 8 strategy confirmation hearing.

The choose still left the doorway open, on the other hand, for the fairness team to revisit the motion if he denies Intelsat’s request to validate its reorganization approach in November.

“I do not know what is going to happen at the affirmation listening to,” he said.

A lawyer for the equity group, David Kovel, declined to remark on the judge’s ruling.

Intelsat filed for personal bankruptcy in May perhaps 2020, saying it needed to restructure as it ready to transfer some of its so-referred to as C-band spectrum to the U.S. Federal Communications Fee, which prepared to use the spectrum to develop out a 5G community. In trade, Intelsat is acquiring about $4.9 billion from the FCC.

The situation is In re Intelsat SA, U.S. Personal bankruptcy Court docket, Eastern District of Virginia, No. 20-32299.

For Intelsat: Edward Sassower, Steven Serajeddini and Aparna Yenamandra of Kirkland & Ellis and Michael Condyles, Peter Barrett, Jeremy Williams and Brian Richardson of Kutak Rock

For the fairness group: Harold Kaplan, Mark Hebbeln and Susan Poll Klaessy of Foley & Lardner and David Kovel of Kirby McInerney

Examine additional:

Intelsat, equity holders sq. off about personal bankruptcy examiner ask for

A yr into bankruptcy, Intelsat faces creditor effort and hard work to seize manage of restructuring

Reporting by Maria Chutchian