StarBand Cleared To Exit Bankruptcy
McLean, Va.-based satellite Internet provider StarBand Communications has received approval from the U.S. Bankruptcy Court in Delaware to emerge from Chapter 11 protection. This is the final clearance required from the bankruptcy court for StarBand to implement its reorganization plan. The effective date of the emergence should occur by the end of November.
The company filed for Chapter 11 bankruptcy protection on May 31, 2002, in the wake of a major dispute with strategic partner Gilat Satellite Networks. Through settlement of this dispute, renegotiations of key contracts, reductions in staffing offset by increased automation, creation of a new sales force and continued addition of new customers, StarBand is poised to emerge as a stronger, more financially stable company, its officials said.
The company’s capital structure has significantly improved with the conversion of approximately $113 million of bank debt to equity. In addition, approximately $90 million of debt to Gilat will convert to equity and a $14 million post-emergence note. Further, StarBand and Gilat have entered into a new technology and hardware supply agreement providing for $7.5 million in additional financing.