The Denver Business Journal has reported that Douglas County based EchoStar Corp “will become the majority owner of the reorganized TerreStar Networks if a judge approves the satellite company’s bankruptcy reorganization.” TerreStar filed for reorganization on October 19th in New York. The company cited “more than a $1 billion in debt and no substantial revenue.” EchoStar has loaned millions to the struggling company and has pledged millions more to “backstop” its “emergence from Chapter 11.” At this time, it is not clear how, if at all, TerreStar’s parent company, TerreStar Corp., will be affected by this reorganization. TerreStar is set to launch a nationwide mobile phone service soon and speculation suggests that EchoStar wants in on the mobile phone business. TerreStar’s assets include “one operating satellite, one 95 percent-built satellite and broadcast frequency licenses estimated to be worth more than $300 million.”
Chapter 11 bankruptcy, as explained by the Administrative Office of the U.S. Courts, involves a debtor proposing a “plan of reorganization to keep its business alive and pay creditors over time.” Chapter 11 is primarily used by businesses but may also be used by individuals to create a plan for paying creditors. As the above explanation suggests, the purpose of Chapter 11 for a company like TerreStar is to payoff debts and ultimately keep the business operational. A bankruptcy procedure like this is a complicated matter involving the courts and requires the expertise of a bankruptcy attorney.
If you or someone you know is struggling to payoff business or individual debt and are thinking of filing for bankruptcy, you need the expertise and experience of a Colorado bankruptcy lawyer on your side. Brian Daniel has years of experience working on bankruptcy cases in Colorado and he will put his expertise of the law to work for you. For a free review of your case, call his office today at (303) 951-0233.