Iridium Bankruptcy Court Proceedings Move to New York (Update1)
Top>Business & Finance>Investments>Sectors>Services>Communications
Services>IRIQE (Iridium World Comm. Ltd.)
Bloomberg - BK Hearing:
by: UnabashedlyPositive (55/USA)
31898 of 31903
This is IMHO from the bondholder perspective. None the less, the lawyer for the bonds says it is about
getting down to whether or not this is a good business, not the same as 'lets kick their ass and see what's left
to drag home...'
Bloomberg News
September 13, 1999, 1:47 p.m. PT
Iridium Bankruptcy Court Proceedings Move to New York (Update1)
(Adds court approval for the move in 2nd paragraph, and
comments from bankruptcy hearing in 9th to 11th paragraphs.
Updates bond prices in 12th paragraph.)
New York, Sept. 13 (Bloomberg) -- Iridium LLC, the first
global satellite phone network, has moved its Chapter 11
bankruptcy proceedings to New York from Delaware.
The move, approved today in U.S. Bankruptcy Court in
Manhattan, is a concession to Iridium's bondholders. The
Washington D.C.-based company, whose operations are financially
supported by Motorola Inc., filed for bankruptcy last month in
Delaware, shortly after a group of its bondholders sought an
involuntary filing in New York.
``In light of the events to date, including the filing of
involuntary petitions against Iridium in this court, proceedings
in Delaware would be less convenient for the debtors and the
other parties than proceedings in this court,' according to
Iridium's court papers.
Iridium had hoped to build a global satellite system that
would provide cell-phone reception almost anywhere in the world.
However, consumers didn't take to the company's large, expensive
phones, and Iridium couldn't agree with creditors on a debt-
repayment plan.
Iridium is putting other affiliates -- Iridium IP LLC,
Iridium Roaming, and Iridium (Potomac) LLC -- into Chapter 11
proceedings in New York as well.
While there aren't big differences between Delaware and New
York bankruptcy law, the advantage for bondholders is that most
of the big holders are in New York, making it more convenient for
them to try to get their money back. Iridium has defaulted on
$1.55 billion in bank loans, after failing to lure enough users
to its 66-satellite global phone network.
Bondholders who filed the involuntary bankruptcy petition
against Iridium include Alliance Capital Management LP, Conseco
Capital Management, Canyon Capital Advisors LLC, Magten Partners
and Wall Financial Investments.
Iridium is still negotiating with creditors to restructure
its debts.
Bondholders ``have to get to the bottom of whether or not
this is a good business,' said Corinne Ball, attorney for the
bondholders' group, after the hearing. ``It's a new business,'
she said.
D.J. Baker, attorney for companies that wholesale minutes on
the Iridium phones, said that some of the so-called gateway
investors ``are willing to put a lot of money additionally into
the business.'
Those wholesalers have already provided $2 billion to
Motorola, Iridium's biggest investor, he said. Motorola also has
a multibillion-dollar maintenance contract with Iridium.
Iridium's 14 percent notes due 2005 traded at 11 cents on
the dollar, down about 88 percent since February.
Shares of Iridium World Communications Ltd., the publicly
traded arm of Iridium LLC, are still halted. They last traded at
3 1/16.
news.com
Posted: 9/13/1999 11:04 pm EDT as a reply to: Msg 31897 by tigrrrrrrr2000 |
