Is Credit Suisse Right on Suggesting that EchoStar and Lightsquared are in on this Together? TerreStar Bankruptcy Archives

Is it all Smoke and Mirrors and have EchoStar and Lightsquared Really been "In Bed Together" The Whole Time ? - is the Googling "Lightsquaredmakes offer on DBSD and Terrestar" by Echostar Holding Purchasing Corporation and Clicking on my Blog, so that I will post the post below as if Echostar Holding Purchasing Corporation is "Looking Into" the Lightsquared Bid on Terrestar Today when Secretly they know all about it?

http://www.sanjivahuja.com/2011/02/echostar-holding-purchasing-corporation.html

And would this be a "Reason" for Harbinger Capital Partner to Make it "Look Like" they are "Looking Into" Craig McCaw Connections to All this? Echostar, which is Dish Network - is Buying DBSD founded by Craig McCaw Right?

Just Things to Ponder.

Below is the Article that Talks of

"10.21.10TerreStar bankruptcy:

The Restructuring Support Agreement Posted in Financials, LightSquared, Operators, Spectrum, TerreStar at 12:56 pm by timfarrar

One of the most important documents filed so far in the TerreStar bankruptcy case is the Restructuring Support Agreement, which TerreStar (and Echostar as the majority holder of the first lien debt) have committed to support as a basis for the plan for emergence from Chapter 11.

This agreement will convert the Senior Secured PIK Notes ($944M of principal and accrued interest) into 97% of the new equity of TerreStar Networks (TSN), with the remaining 3% shared between the Exchangeable Notes ($179M of principal and accrued interest) and other unsecured claims.

No distribution will be made to the original holders of interests in TSN (the 89% held by TerreStar Corporation and the 11% held by LightSquared).

In addition there will be an offering of $125M of Preferred Stock to repay the DIP, with rights to subscribe to 97% of this Stock offered to the Secured Notes holders and the remaining 3% offered to the holders of Exchangeable Notes/unsecured claims. Echostar has agreed to backstop $100M of this $125M offering.

The “net distributable value” under the Plan is set at $1.050 billion, and the Preferred Stock will be issued at a discount of 35%. Under the Plan the only outstanding debt after emergence from bankruptcy would be the Purchase Money Credit Facility (PMCF), which currently has $86M outstanding.

The RSA also includes a declaration from Steven Zelin of Blackstone, which sets out details of the negotiation process leading up to the bankruptcy filing. Many of the developments are broadly in line with what we had surmised, notably that TerreStar had tried to float a much larger DIP of $250M, initially using the 1.4GHz spectrum and the ground spare satellite as security (after repaying the PMCF), and later by priming the first lien debt.

However, neither option proved feasible, the first apparently because the 1.4GHz spectrum plus the ground spare satellite did not provide sufficient security, and the second because it was anticipated that a priming fight would be difficult to win.

As a result, TerreStar was forced to accept Echostar’s proposal for a $75M DIP and plan of emergence set out in the RSA.

The unanswered question is to what degree Harbinger is content with the outcome – it certainly appears to have been on the opposite side from Echostar in the early part of the negotiation process (apparently agreeing to participate in the first proposed DIP) but then it agreed with Echostar to provide a $10M advance under the PMCF, which explains how TerreStar managed to stay out of bankruptcy until now.

However it seems a huge stretch to imagine that this means there is some agreement between Harbinger and Echostar to join forces and collaborate in LightSquared, as Credit Suisse have suggested.

In particular, there are plenty of other reasons for both companies to have wanted to delay the bankruptcy filing: in Echostar’s case because they needed to negotiate over their own proposal, and in Harbinger’s case because they were trying to finalize additional funding for LightSquared."

Source of the Above Quote

http://tmfassociates.com/blog/2010/10/21/terrestar-bankruptcy-the-restructuring-support-agreement/

Other Post of Interest on the Matter

http://www.bizjournals.com/denver/blog/boosters_bits/2010/10/could-a-sat-firms-bankruptcy-serve-up-w.html

"Ergen’s Douglas County-based EchoStar Corp. (NASDAQ: SATS) owns an equity stake in the reorganizing company’s publicly traded parent company, TerreStar Corp., as does billionaire financier Philip Falcone’s Harbinger Capital hedge fund." .... "Credit Suisse analyst Jonathan Chaplin theorized in a note to investors Wednesday that TerreStar, LightSquared and Dish Network may be angling to pool their unused spectrum for wireless broadband." ...."In February two EchoStar executives, Dean Olmstead and David Rayner, resigned from TerreStar’s board of directors without explanation. "

http://www.terrestarinfo.com/pdflib/14_15446.pdf

http://tmfassociates.com/blog/2010/09/28/what-is-plan-b-for-terrestar/

http://www.reuters.com/article/2010/10/07/falcone-hedgefunds-idUSN0713631620101007