Perhaps the court knows more than is let on? I dont really think they are actually looking out for 'us' but this whole affair has had enough intrigue to last me several lifetimes! (see the end for the section I highlighted)
Jeff Vayda
Loral and Insurers Face New Worry In Faulty Satellite
The Wall Street Journal 09/22/03
author: Andy Pasztor
(Copyright (c) 2003, Dow Jones & Company, Inc.)
A short-circuit that knocked one of Loral Space & Communications Ltd.'s satellites out of operation may complicate the company's bid to emerge from
bankruptcy-court protection.
The problem aboard Loral's Telstar 4 satellite, which went dead Friday morning, also is expected to roil a space-insurance market already confronting damage
claims in excess of $2 billion stemming from previous malfunctions on satellites operated by other companies. Insurance officials complain that nearly 25% of
all the satellites in orbit have suffered electric-power problems, though last week's episode is believed to be the first time such a serious fault has afflicted a
spacecraft built by Lockheed Martin Corp.
The cause of the malfunction and the chances of restoring power remained uncertain over the weekend. Lockheed and Loral officials said they continued to
evaluate the situation. But even if communication is re-established with the eight-year-old satellite, TV networks and other customers are unlikely to trust the
spacecraft to provide vital services. Muzak LLC, for instance, which provides in-store music and messaging services to more than 350,000 clients, said Friday
that less than 10% of its business was affected, and it transferred those clients to another company's satellite.
Loral of New York said the malfunctioning satellite is insured for $141 million. Loral also said that after the satellite's primary power system shut down, it was
able to transfer many customers to two other of its satellites.
Intelsat Ltd., a Bermuda operator with headquarters in Washington, has agreed to pay $1 billion to purchase Telstar 4, three other Loral satellites in orbit
serving North America and two more under construction. The Telstar constellation has only about 70% of its capacity leased, which is a major reason
Intelsat's rivals have criticized the sales price as too high.
If Telstar 4 is permanently disabled, Intelsat could reduce the amount it is willing to pay. The purchase contract spells out certain "contingencies specifically
related to" Telstar 4, said Intelsat spokeswoman Susan Gordon, without providing details.
Two other potential hurdles have cropped up for Loral. In a filing with the bankruptcy court in New York, Boeing Co. indicated it has a lien on one of Loral's
satellites. In a separate filing, PanAmSat Corp. said that down the road it may be interested in acquiring some of Loral's satellite fleet serving Asia or Latin
America.
Loral Chairman Bernard Schwartz's bid to emerge from bankruptcy protection hinges on a core strategy: quickly closing the transaction with Intelsat, and using
the proceeds to pay off debt. If the process drags out past mid-October, Intelsat could lose its financing and Mr. Schwartz could lose control of the
restructuring. |
