Loral shareholder asks court to order debt holders to disclose trading activity

By Jeff Pines

Washington, May 5 - Loral Space & Communications Ltd.'s debt holders would be required to disclose their trading activity under a motion filed Tuesday with the U.S. Bankruptcy Court for the Southern District of New York by a company shareholder, who is also custodian for two other shareholders, and two further shareholders.

Tony Christ, of Falls Church, Va., wants the court to take note of when bondholders acquired their securities. If it was after the company filed for Chapter 11, the noteholders would have bought their bonds at rates far below par expecting to be repaid at par, which he believes is unfair and a distortion of the absolute priority rule, he said. The rule allows certain classes to be compensated before others.

The court also should use market value, not book value, to determine Loral's value since the New York-based satellite manufacturer's market value could be two to five times as high as tangible book value, he said.

Bondholders prefer courts to use book value because it depreciates the value of the company giving them a much better recovery at the expense of other interested parties, Christ argued.

He also wants stockholders to receive equity in the reorganized company. Christ owns 300,000 shares and is the custodian for 32,500 shares. The other shareholders own 22,000 shares.

Loral filed for bankruptcy on July 15, 2003. Its Chapter 11 case number is 03-41710.

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