WorldSpace Enters Chapter 11
[Satellite Today 10-20-08] WorldSpace Inc. has filed for chapter 11 bankruptcy protection, the companies announced Oct. 17.
WorldSpace and U.S. subsidiaries WorldSpace Systems Corp. and AfriSpace Inc. filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Delaware.
WorldSpace’s board unanimously agreed to file for bankruptcy protection as a mean to raise sufficient funds to repay its senior secured notes and convertible notes by means of either a sale of the company or its assets or a recapitalization of the company. In July, WorldSpace reached an agreement with four of its creditors to defer debt payments of $19.9 million less than a month after reaching an agreement with the creditors to delay a $17.7 million payment.
In its bankruptcy filing, WorldSpace listed liabilities of more than $2 billion and assets of more than $300 million, which includes two satellites in orbit and one in storage on the ground. Creditors have agreed to fund the company with $13 million in hedge funds for up to 90 days, which the company said it will use to pay salaries of critical employees and continue operations.
WorldSpace will continue to operate its business and manage its assets as a debtor-in-possession under the jurisdiction of the court.