Some developments surfaced in the ongoing Loral bankruptcy case, EchoStar's interest in the company's assets, and DirecTV's order for satellites being built by a Loral subsidiary.
In a filing sent Tuesday to the New York bankruptcy court handling the Loral proceeding, satellite manufacturer Space Systems/Loral said it received a letter from Hughes, DirecTV's corporate parent, containing a commitment to increase its proposal for satellite assets it has for the company. The proposal includes a cash payment to SS/L three business days following the bankruptcy court's entry of a final order approving the assumption of DirecTV 7S or transfer to DirecTV of clear title to the satellite, the document from SS/L said.
DirecTV 7S, a spot-beam spacecraft being built by SS/L for the satellite TV company, is set for launch in fourth quarter 2004. Wire services reported late Tuesday that the new DirecTV/Hughes offer amounts to $165 million, up from $140 million.
SS/L said, "The original proposed transaction with DirecTV that SS/L sought approval of was not only economically profitable, but literally would serve as the foundation for SS/L's viability and the preservation of over 1,500 jobs." The satellite manufacturer added, "SS/L is gravely concerned about its reputation in the industry if it rejects a satellite contract with DirecTV for the purpose of selling the satellite to EchoStar, a direct competitor of DirecTV."
EchoStar has expressed interest in the satellite assets being built by SS/L for DirecTV. EchoStar has said in the past that bankruptcy laws and procedures allow for the sale of a satellite in the factory at the time of bankruptcy to the highest bidder, something that compelled the bid for the assets being built for its small dish rival.
Meanwhile, Reuters reported that state attorney general offices in three states - New York, Pennsylvania and Missouri - have raised competition/antitrust concerns with EchoStar's effort to gain the satellite assets. The wire service said the AGs fear the U.S. pay-TV market could be at risk if EchoStar buys the satellites in question from Loral.
EchoStar spokesperson Steve Caulk said, "The bankruptcy process gives bankrupt companies some prerogative they wouldn't have otherwise outside of Chapter 11. It's a different situation." No other updates were available from the company concerning its involvement with the Loral case.
