TerreStar Corp. debtors file plan, will obtain $7.5 million exit loan

By Caroline Salls

Pittsburgh, July 22 - TerreStar Corp. filed a joint plan of reorganization with its subsidiary debtors Friday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the debtors in the TerreStar Corp. case, which is being administered separately from TerreStar Networks, Inc.'s case, also include Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holding Inc., MVH Holdings Inc., TerreStar Holdings Inc. and TerreStar New York Inc.

TerreStar plans to obtain an up to $7.5 million exit facility.

Creditor treatment

Treatment of creditors will include:

• Holders of administrative claims, debtor-in-possession claims, priority tax claims and other priority claims will be paid in full in cash;

• Holders of other secured claims will receive a cash payment;

• Holders of bridge loan claims will be paid in full in cash, minus any interest that has accrued as a result of a continuing default;

• Holders of general unsecured claims against TerreStar Corp. and TerreStar Holdings will receive new TerreStar Corp. notes equal to 100% of their claim. However, if the amount of notes needed to satisfy these claims in full exceeds a note's threshold amount, the creditors will receive notes up to the threshold amount and new preferred stock until the claims are paid in full;

• Holders of unsecured claims against the other debtors that are not also holders of claims against TerreStar Corp. and TerreStar Holdings or whose claim against the other debtors is greater than its claim against TerreStar and TerreStar Holdings will either be paid in full in cash or receive a share of equity in the reorganized equity corresponding to the claim;

• Holders of intercompany claims, preferred series C, preferred series D and preferred series E TerreStar Corp. interests and other TerreStar Corp. equity interests will receive no distribution;

• Holders of preferred series A and preferred series B TerreStar Corp. interests will receive a share of new common stock; and

• Other equity interests in the other debtors will either be retained or be cancelled. If they are cancelled, new equity interests in the applicable debtor would be issued under the plan to the debtor that holds the cancelled interests.

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. Their Chapter 11 case number is 11-10612.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.