Loral Space & Communications stockholders' committee appeals plan confirmation

By Caroline Salls

Pittsburgh, Sept. 9 - Loral Space & Communications Ltd.'s plan of reorganization confirmation was appealed by a shareholder on behalf of the company's stockholders protective committee, according to an 8-K filing with the Securities and Exchange Commission.

According to the filing, on Aug. 9, the U.S. Bankruptcy Court for the Southern District of New York confirmed the plan and denied a motion to authorize an action to prosecute an alleged fraudulent conveyance claim regarding Loral's guaranty of Loral Orion's 10% senior notes due 2006 issued in connection with a Dec. 21, 2001 exchange offer.

Loral said it believes that the appeal will not prevent it from its plan of reorganization taking effect after satisfaction of conditions, which include Federal Communications Commission approval.

The company still expects to emerge from bankruptcy early in the fourth quarter, the filing said.

Under the plan, the company will emerge with its two business units, Loral Skynet and Space Systems/Loral, intact and with current management in place.

Space Systems/Loral will have no debt. The reorganized parent company will be publicly held under current management and will seek listing on a major stock exchange.

Loral Orion's unsecured creditors will receive 80% of the stock of the reorganized company plus $200 million of preferred stock to be issued by the reorganized Skynet. They will also be able to subscribe to $120 million of Skynet notes.

The parent company's bondholders and some other unsecured creditors will receive 20% of the stock of the reorganized company.

Loral, a New York-based satellite company, filed for bankruptcy on July 15, 2003. Its Chapter 11 case number is 03-41710.

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