Loral Space & Communications committees spar over filing motions

By Jeff Pines

Washington, March 10 - Loral Space & Communications Ltd.'s official committee of unsecured creditors wants to file a sealed objection to the company's request to extend its exclusive period because it says the objection contains confidential information.

The unsecured creditors committee believes the only ones who should see its objection other than the court are Loral, its lawyers, the pre-petition lenders, their lawyers and the U.S. trustee.

The ad hoc committee of preferred shareholders, which has signed a non-disclosure agreement with Loral, wants the court to either deny the unsecured creditors' motion or at least let it see the objection to the extension to the exclusivity extension.

Furthermore, the ad hoc committee said Loral has no problems with the committee's members seeing the objection and it thinks the court should approve the extension.

The New York-based satellite manufacturer wants to extend its exclusive periods to file a reorganization plan to July 12 and to solicit acceptances until Sept. 10. The company's exclusive period to file a plan ends March 12.

Loral is selling its North American satellite assets to Intelsat Ltd. and the ad hoc committee believes it is prudent to let the company close the transaction before it has to contend with alternative reorganization plans, especially because the proceeds from the sale will be used to repay the company's secured debt.

The unsecured creditors committee filed its objection with the U.S. Bankruptcy Court for the Southern District of New York on March 9, and the ad hoc committee filed its motions on March 10.

A March 16 hearing is scheduled to consider the extensions.

Loral filed for bankruptcy on July 15. Its Chapter 11 case number is 03-41710.

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