TerreStar seeks extension on filing bankruptcy exit plan

TerreStar Networks wants a federal bankruptcy judge to grant it an extension on filing a plan to explain how it intends to use the remaining proceeds of Dish Network's $1.375 billion purchase of its assets.

Dish received final approval to buy TerreStar's assets in July, and TerreStar got control of most of the sale proceeds Aug. 11. It then paid off $975 million in debt but still has around $310 million to distribute. TerreStar is seeking an extension until Oct. 21 to file its final plan, according to a filing the company made in federal court last week.

Still unresolved is Sprint Nextel's (NYSE:S) claim that that TerreStar owes it $104 million for band-clearing fees. The two sides are arguing over differing interpretations of FCC rules on spectrum clearing. On Monday, a judge denied Sprint's motion for a partial summary judgment on the $104 million claim, arguing that only the bankruptcy judge in the case has the authority to prioritize Sprint's claim over the claims of others. TerreStar's lawyers said they expect other claims will come up.

Dish said earlier this month it intends to play a "significant role" in the wireless industry. The TerreStar deal dovetailed with the $1.4 billion Dish paid for DBSD North America, and the two deals each give Dish access to 20 MHz channels of S-Band spectrum. Tom Cullen, Dish's executive vice president of sales, marketing and programming, said the company will file soon file a request with the FCC to transfer the spectrum licenses to Dish. He declined to discuss whether Dish will define a business strategy for the spectrum when it makes its filing.

For more:
- see this Dow Jones Newswires article
- see this Reuters article

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