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TerreStar shareholder asks court to reconsider examiner denial
By Caroline Salls
Pittsburgh, Oct. 12 - TerreStar Corp. shareholder Aldo I. Perez asked the U.S. Bankruptcy Court for the Southern District of New York to reconsider its Sept. 23 order denying appointment of an examiner, according to a Tuesday court filing.
"The debtor's own financial statements, prepared at the height of the great recession, demonstrate that something is awry with the debtor's recent valuation of its principal asset," Perez said in his motion.
Specifically, Perez said that TerreStar's spectrum license was valued at $359 million in 2008 and $362 million in 2009.
Perez said the company now values the spectrum license at about $175 million, or 50% of its 2008/2009 value, "with no one there to protect the interests of common shareholders."
As a result, Perez said in the motion, TerreStar's preferred shareholders will not be required to share any of the equity in the reorganized company with common stockholders.
"That is precisely the result they are seeking," Perez said in his motion.
Because the company's plan of reorganization is not likely to be confirmed before the end of the year, Perez said there is ample time for an examiner to provide an impartial valuation of the spectrum license.
TerreStar Corp. and TerreStar Holdings are subsidiaries of TerreStar Networks Inc., a Reston, Va.-based holding company with subsidiaries that operate satellite-based digital mobile communications systems. TerreStar Corp. and TerreStar Holdings filed for bankruptcy on Feb. 16, 2011. Their Chapter 11 case number is 11-10612.
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