Wireless Systems Solutions files bankruptcy; debt tops $1 billion

By Sarah Lizee

Olympia, Wash., March 10 – Wireless Systems Solutions, LLC filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of North Carolina.

Between 2017 and 2020, the company entered into a series of agreements with Smartsky Networks, LLC. A dispute arose between the companies, and an arbitration award was entered against Wireless Systems and other parties on Oct. 1.

Smartsky sought to confirm the arbitration award in the U.S. District Court for the Middle District of North Carolina. Wireless Systems opposed that confirmation, but the award was confirmed on Feb. 7, and a judgment was entered the same day.

Wireless Systems filed a notice of appeal of the judgment on March 7.

In addition to a monetary award of over $12 million, the judgment contained an injunction. Wireless Systems said it has complied, and will continue to comply, with the injunction so long as it remains in effect.

The company said it is able to operate profitably while complying with the injunction and anticipates filing a plan of reorganization which provides for, but does not rely on, relief from the injunction.

“The goal of this Chapter 11 is to preserve the value of WSS and restructure the debts of WSS, including the judgment, so that WSS may pay, over time, as much as practicable to its secured and unsecured creditors,” the company said in court documents.

“WSS believes that reorganization is a vastly superior alternative to liquidation, and that in a liquidation, unsecured creditors would receive little, if any, return.”

The debtor filed a motion seeking access to the cash collateral of its secured creditors. However, the company said the secured creditors have not yet consented to the debtor’s use of cash collateral.

The company listed $1 million to $10 million in assets and $1 billion to $10 billion in liabilities.

Its largest unsecured creditors are Smartsky Networks, based in Morrisville, N.C., with a $12.55 million claim, and CIT Bank, NA, based in Pasadena, Calif., with a $1.4 million claim.

The Morrisville, N.C.-based cellular network solutions company filed Chapter 11 bankruptcy under case number 22-00513.

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