Attachment DA 05-2639

DA 05-2639

PUBLIC NOTICE submitted by IB, FCC

DA 05-2639

2005-09-30

This document pretains to SAT-T/C-20050628-00140 for Transfer of Control on a Satellite Space Stations filing.

IBFS_SATTC2005062800140_457274

f PUBLIC NOTICE ads 12" St, SM. NowsoIntormatonaoe0e Federal Communications Commission Washington, D.C. 20554 Td rassssscin pa 05—2630 September 30, 200 AUTHORIZATIONS GRANTED Applications of Loral Space & Communications Ltd. (DIP) for the Transfer of Control of Licenses and Authorizations Held by Loral Orion, Inc. (DIP), Loral SpaceCom Corporation (DIP) and Loral Skynet Network Services, Inc. (DIP) to Loral Space & Communications Inc. IB Docket No. 08233 By the Chief, Intermational Bureau: By this action, we grant LoralSpace & Communications Ltd., Debtor—in—Possession ("Old Loral"), purstiant to Section 310(d)othe Communications Act of 1934, s amended (the "Act‘)" approval to transfer contral ofspace and earth sttion icenses held by ts subsidiaries, Loral Orion, Inc. DIP (*Loral Orion‘), Loral SpaceCom Corporation DIP (‘Loral SpaceCoin") and Loral Skynet Network Services, Ic DIP (*Loral Skynet"), to Loral Space & Communications Ins("New Loral®) We also dismiss as moot, the application fled by CyberStar Licensee,LL. C.(*CyberSfar") to assign ts space station authorizations to Loral Cyberstar LL C. (‘Loral Cybersta"). Hereinaten, the iransfer ofcontzol applications will be referted t asthe "Applications" and the partes to the trissction will berefered to as the "Applicants." On June 28, 2005, Applicants filed the Applications secking Commission approval of the proposed transiction to permit Old Loral and centain of ts subsidiariesto emerge from bankruptey under Chapter 11 ofthe U.S. Bankruptey Code." The Applications pertaintoligenses fo space and earth stations" On July urusc.sio " See File Nos. SAT—TIC—20080628—00140, SAT—T/C200s0628—doi41, Ss—TC—20050628—00837, ses—T.C— 20080628—00638, and SES—T/C—20050628—00830 * We hote that on September 26, 2005, theIntemationalBurcau released an order holding thatthauthorzation to consimict, launch, and operate the CyberSta1sitelite (allsign $2163)at 115° WL and the CyberStar 2 sullte (callsign S2152)at 93° W.L. by CyberStar License,L.L.C.in thd fequency bands 18.58—18.8 Gltz,19.720.2 Gi, 28.35—28.6 GHte and 20.5—30.0 GHtz was null and void unde ts oun terms. See CoberSiar Licenses, LC Applicationfor duthorisy o Constrct, Lounc}, and Operatea Kaband SatellteSysten in the Fzed Satelite Service, Order, DA 05—2326 (ImI Bur.rel, Sept. 26, 2005), Accordingly,wdismiss theassignment apliction filedby CyberStar Licenses, L L C. (SATASG—2005—0628—00138)reatedto thassignment ofcll sns S2163 and S2152 to LoralCyberstar L L. C.as moot, " Lordl Space & Communicatons L. e al, Consolidated Case Np. 03—41710 (Chapte11) (Bank SDNY.). The case wasfled in the United Sites Bankruptey Court fr theSouthem Distict ofNew York (*Bankruptey Court")

18, 2005, the Commission placed the Appliations on Public Notie® No appositions or comments were filed on this transaction Under the proposed transaction, and in accordance with the Fourth Amended Joint Plan of Reorganization ("Rearganization Plan‘)filed by te Applicants in he Bankruptcy Court: (1) Loral Skymet will emerge from DIP status and become Loral Skymet Network Services,Inc.and the icenses and authorizations now held by Loral Skymet willbe held by Loril Sleynet NetworkServices, Inc(2) Loral SpaceCom will emerge from DIP status and become Loral SpaceCom Corporation and th lienses and authorizations now held by Loral SpaceCom willbe held by Loral SpaceCom Corporation;and (3) Loral Orion will emerge from DIP status and will change itsname to Loral Skymet Corporation and the licenses and authoriztions now held by Loral Orion willbe held by Loral Skymet Corporation." Hereinafter, Loral Slmet Network Services, Ic., Loral SpaceCom Corporation, and Loral Symet Corporation will be refered to asthe "New Loral Licensecs." Further, as proposed,the ownership structure of the New Loral Licensees will be as follows: Loral CyberStar LLC,a Delaware limited lisbility company, will be wholly owned by Loral Smet Network Services, Ic. a Delaware corporation, which in urn,will be wholly owned by Loral SpaceCom Comoration, lso a Delaware corporation. Loral SpaceCom Corporation,in tum, willbe whally ouned by Loral Skymet Corporation,a Delaware corporation, which in tum, willbe whally owned by LoralSpace & Communications Holding Corporation, a Delaware corporation. Loral Space & Communications Holding Corparation,in tum, wll be wholly ouned by New Loral. Thus,ll of th issued common stock ofhe New Lorl Licensees willbe indiectly owned and contolled by New Loral. New Loral will eontrolallpolicy decisions and allaspects ofth day—10—day operations ofhe New Loral Licensees through its control ofts wholly owned diect subsidiry, Loral Space & Communications Holding Corporation. New Loral, trough certai ofits subsidiaries and afilntes, including the New Lorl Licenses, primanly will be involved in satelite services and manufacturing. Loral Space & Communieations Holding Corporation will not conduct any operating business. New Loral willissue common stock t the ereditors ofOld Loral and to creditors ofcertain of ts subsidiaries. Certai investmentfunds managed by MHR Furd! Management LLC (‘MEHR") will, in the ageregate, old approximately 36 percent otheintaly ssued common stock ofNew Loral. Specificaly, the MHR investment funds, ech of which will holda directinterest in New Loral,are: MHR Capial Parters LP; MR Capital Patners(100)LP; MBR Institutional Parmers LP; MEHRM LP; MEHRA LP; MHR InstititionalPartners II LP; MHR Instiutional Partners IA LP, All ofthese investmentfunds are Delaware limited partnerships. The exact percentage ofNew Loral common stock that willbe held by each ofthese entites willnot be known with certainty untl the claits resolution process set forth in the * SeeFile Nes SAT—TC—20050628—00140,SAT—T/C—20050628.0014, SES—T1C—200s0628—00827, SS—TIC— 20050628—00638, SES—TC—20050628.—00829, and SAT—ASG—20050628—00138. File No. SAT—TIC20050628— 00139 was dismissed as moat, see Pubic Note, 1B Docker No. 03—233, DA 05—2031 (I‘I Bur. rel. July 18, 2008); and File No. SAT—ASG—20050628—00138 i dismised as mootas dicussed herein. See supra.note 2 * The Commission placed the applications on public notceanestablished a pleading eycle. See Public Notce, 1B Docket No.05—233, DA 02031 (‘Bur rel. July 18, 2009 " On August 1,2005, he Bankruptcy Courtissued an order confimingthe Fourth Amended Plan of Reorganization * Underthe Reorganization Pln, CyberStar License, L. C. wastoassign it lcenses to Lorl CyberStar L—1.C. However, because fhe recentaction taken by thIntermational Bureas finding CyberSr LicenseeLLC:‘s Ka— band saelitesystem authorications mull and void, we findthe requestfor approvalto asign hese authorizations Loral CyberStais moot. See supro note 2 * Atthstime, Loral CyberStar, .L.C.holds no Commission lcenses 2

Reorganization Plan is completed. However,under no circurmstnces will the investment funds hold (or MHR Fund Management LLC indireetly control through ts management of th investment funds) more than 39% of the nitilly issued New Loral common stock. No other entity willhold 10 percent or more of the voting stock of New Loral Loral Slomet Corporation will issue Series A 12% Non—Convertible Prefered Stock (the "Perferred Stock") whereby MHR is expected to indirectly control, in the agaregnte, spproximately 38 percent of Loral Smet Corporation‘s intlly issued Preferred Stock through ts management ofthe MER investment funds that willhold the preferred shares. The holders ofthe Preferred Stock will not have votingrights over the day—to—day operations or policy decisions ofLoral Symet Corporation. The holders ofa majonty ofhe Preferred Stock will have theright to elect two additional directors tothe board ofdiectors ofLoral Slymet Corporation (which otherwise will be composed ofnine diréctorsin the event that Loral Skgnet Corporation filsto paythe stated dividend on the Prefered Stock. Apart from the diectors appointed by the holders ofthe Preferred Stock, ifny, the organizational documents ofNew Loral and Loral Sknet Corporation provide that thirrespective boards ofdirectors willbe composed ofthe same individuals.In addition, so long as two—thids of the Preferred Stock inially issued remains outstanding, the vote othe holders ofa majoriy ofthe Preferred Stock wll be required to approve:() amendments to the cetificate of incorporation, mergers, nd other similar corporate actions by Loral Skymet Corporation that would adversely affect the prionty dividend rights orother ights ofthe Preferzed Stock; and (i) dividends pid to holders of Loral Skymet Corporation common stock.. MHR is a Delaware limited abiliy company whose primary business is investment management, which itconducts through the management ofts investmentfunds. Dr. Mark Rachesky, M.D,a US. €itizen, controls MHR and therefore willindirectly contol the New Loral common stock and the Loral Slomet Corporation Preferred Stock that MHR willindirectlcontzol though its management ofthe MER investment funds. D. Rachesiy also holds a direct ownership interestin crtain ofthese funds, As a result ofthis ownership iterest, Dr. Rachesky indirectly will hold a beneficial ownership iterest in less than 2 pereent oftheintaly issued New Loral common stock and the Loral Skynet Corporation Preferred Stock In addition to this ndirect beneficial ownership interest, Dr. Rachesky, through his ownership ofcertin affiiates ofMHR, also will hold a majority inerest in MHR‘srightto 20 percent ofthe profits accrued by the funds managed by MBR from their ownership iterest in New Loral common stock and Loral Sigmet Comoration Prefered Stock. We ind that approval of the proposed Applications will serve the publi interest." As a prelimiary matr,ther is no evidence in the record to suggst that New Lorallacks the basic qualifieationsto be a Commission licensec."" Further,the record contains o evidence that the proposed transaction would harm competiton in the relevant U.S. telecommunications markets."" Based on the reeord, we find that approval ofthe proposed trnsection is litely tobring about public inteest benelis by allowing Old Loral to emergefrom bankzuptcy and faclitating increased use ofts assets; roviding for an infusion ofapital and stimulation of nvestment in the Loral gatellie system; fostering competitionin the fixed satelite service market by strengthening the commercial viablity ofLorals satellie network; and ensuring continued provision ofLoral‘ssatlite services. In ddditon, the record indicates that the "arusc.sm100. "arus c3 3000) ©* Lord, through its varios subsidiaries and affliates, is engaged n thesatliteservices and manufictring businesses. Ts stelites are used bytelevisionand cablenetworks o broadcastvideo programming, and by cormmunications servie provides,resellerscorporate and govemment customes for broadband data tansmisson, intemetservies and other communicationsservices. Loral is also in the businessofdesigning and manuficturing sateites and satlitesystems for commercial and govemment applcations. 3

reotganization is designed to help preserve and revitalize Space SystemsLoral,Inc. in the design and manuficture ofsatelites and satelite systems for commercialand govemment applications, and might thereby benefit U.S. satelite manuficturing competition. Thus, upon consideration ofthe record, the lmcrnuhoflfil Bureasfinds that grant ofthe Applications will serve the public interest, convenience and necessipe "The trnsaction shall be completed within 60 days from the date oauthorization."" Within 30 days ofeonsummation, the Commission shall be notifed by leterofthe date ofconsummation and thefile numbers of the Appliations involved in the transaction.". Failire to comply with all relevant Commission rules and policies, and any specific condition ofthis rant, sould result in the imposition of fines and ferfeitires. Pursuant to section 1.103 ofthe Commission‘s rules, the grant is effective upon release ofthis Public Notice. Petiions forreconsideration under section 1.106 or applications far review under section 1.115 ofthe Commission‘s rules may be filed within 30 days ofthis Public Noti." #h# ECC wit P 47 US.C: § 3104 See Appendix Aatached t hiPublic No "arorng2s190 "ul "aCBR § 110. "a1cBR 55 1.106, 1113

APPENDIX A (IB Docket No. 05—233) Numbers (Previou) CallSigm NexLcenice shetcaneste2—00140 LoalOien. i. DP 1+2, 522, 52357, 52670 Lonl Signet Copontion SATTCNRS2—I0141 LoalOien. i. DP szsee saam,52219, LonlSionet Coperiien smm smet SES—T/C—2008062—00637 Lorl SiynetNetwork Services In. BOOOTE7(Lend)(4 o) Lornl Siynet NetworkServies In. ore SES—TIC2000GEIM.. Lonl SpceCom Coperiion DIP BMOSHE(Lea)G6toui) Lorl SpoccCom Corportion SES—TC2000200809 Lonl SpacCom CoporntonDIP Bt20101, EOe Lonl SpceCom Coporation New ownERsir stRucture LoralSpace& Communicatons nc. (etmard CJ LoralSpcet Communications Holtings Corporation (Dotmward Too% 100% LoralStymet Corporation Space Sntem @oimare Loral tnc. 1o0% Loral Spacecom Corporaton Deiware 1o0% Loral Sknet Network Services inc. Detewares 100% Loral Cberstr, LLC


Document Created: 2005-09-30 16:37:04
Document Modified: 2005-09-30 16:37:04
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