Satellite operator SES is persisting in its effort to get a larger share of Intelsat’s C-band clearing money after an appeals court made a judgment in its favor. Before Intelsat emerged from Chapter 11 last year to cut its debt load by more than half to $7 billion, SES asked the U.S. bankruptcy court to equally split the billions of dollars Intelsat and SES would gain from clearing C-band frequencies ahead of deadline. SES was not successful.
The two broke off merger talks last week, Inside Towers reported. A federal appeals court said June 21 that the bankruptcy court had erred in rejecting SES’s claim, according to SpaceNews.
Judge Robert Payne, of the U.S. District Court for the Eastern District of Virginia, sent the case back to the U.S. Bankruptcy Court for the Eastern District of Virginia. At the heart of the dispute between SES and Intelsat is a broken agreement to equally share the $9 billion in proceeds they would get for clearing C-band for telecoms.
SES and Intelsat are currently set to get $3.97 billion and $4.9 billion, respectively, in total incentive payments from the FCC if they can move customers and filter ground antennas in time for vacating the lower 300 MHz slice of C-band by December 5.
According to Intelsat, this deal was moot once the FCC opted in 2019 to sell C-band frequencies via a public auction. SES and Intelsat favored a satellite operator-led private process, Inside Towers reported.
Bankruptcy Court Judge Keith Phillips sided with Intelsat September 30, prompting SES to appeal after seeking $1.8 billion in compensation to cover damages from the broken agreement. Payne agreed with SES that the sharing deal should not have been construed as only applying to a privately run spectrum sale.
SES declared the judgment as a “major appellate victory” in its ongoing legal battle against Intelsat. Intelsat said it disagreed with the appeal judge’s decision but did not believe it would change the ultimate ruling in this case, according to SpaceNews.
“Judge Phillips heard all of the evidence in the case as the trier of fact, and we remain confident that the court will come to the same conclusion as he did in his original opinion on the merits of SES’s claims,” Intelsat stated.
SES has already launched the five satellites it needs in geostationary orbit for its C-band clearing plan. Intelsat has one more to go, after deploying six C-band replacements.
The FCC is reimbursing them the satellite costs, after raiding more than $80 billion from Verizon, AT&T, T-Mobile and other telecoms from the auction.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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