Tue 10/12/2021 17:05 PM
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Relevant Documents:
Anchorage ICF Claim
Cyrus ICF Claim

Ad hoc Intelsat SA convertible noteholder group members Anchorage Capital and Cyrus Capital last week filed guarantee claims as Intelsat Jackson unsecured noteholders against certain Intelsat parent entity debtors, including Intelsat Connect Finance SA, or ICF, Intelsat (Luxembourg) SA, Intelsat Holdings SA and Intelsat Investments SA, the so-called MidCo debtors, which could complicate confirmation of the Intelsat debtors’ chapter 11 plan. Anchorage says it holds approximately $110.8 million in 2024 Jackson unsecured notes and $70.5 million in principal amount of 2025 notes, while Cyrus says it holds approximately $28.7 million in 2024 notes and approximately $155.3 million in 2025 notes. The total Jackson notes outstanding exceed $7 billion.

As indicated in the attachments to the claims filed by Anchorage and Cyrus on Oct. 6 and Oct. 4, respectively, the Aug. 25 plan support agreement between the debtors and the Intelsat Jackson crossover group, which generally represents the interests of Jackson unsecured noteholders, requires the Jackson noteholder trustee to withdraw its disputed guarantee claims against the MidCo debtors, but not “TopCo” debtors Intelsat SA and Intelsat Investment Holdings Sàrl, on the effective date. By asserting their own guarantee claims against the MidCo debtors independent of the trustee - claims that they say cannot be withdrawn by the trustee under the settlement - Anchorage and Cyrus could possibly undermine the settlement and thus the plan, which is opposed by the convertible noteholders.

The Anchorage and Cyrus claims could also force the debtors to litigate the validity of the guarantee claims prior to confirmation. The convertible group has accused the debtors of seeking to avoid a ruling disallowing those claims in order to use the guarantee claims against the TopCo debtors to secure an accepting impaired class at those debtors over the rejecting votes of convertible noteholders.

The convertible noteholder group itself objected to the guarantee claims filed by the Jackson notes trustee, arguing that these claims were validly released by the parent entities on the eve of bankruptcy under pressure from Cyrus. Anchorage and Cyrus still object to those claims, according to the attachments to their proofs of claim, but seek to preserve their guarantee claims as unsecured noteholders against the MidCo debtors in the event the trustee claims are allowed but then withdrawn by the trustee in accordance with the PSA.

“[T]he effectiveness of the Amended Plan is conditioned on the agreement among the parties to the Plan Support Agreement that all of the Parent Debtor Proofs of Claim be withdrawn with prejudice, other than those filed against the TopCo Debtors,” Cyrus says in its claim attachment. “The withdrawal by the Indenture Trustee of the Master Proofs of Claim it has filed against the MidCo Debtors would essentially seek to waive Cyrus’s claims against those Debtors,” Cyrus continues, and “[n]o party (least of all, the Indenture Trustee) has the authority to unilaterally waive any claims that Cyrus may have against the MidCo Debtors on account of its holdings of the Cyrus 2024 Notes.”

Editor's note: The original version of this story did not include the principal amounts for all of the claimants' holdings in both 2024 and 2025 Jackson unsecured notes as indicated in the proofs of claim.
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