SES Asks for Summary Judgement in Intelsat C-Band Dispute
SES has asked Intelsat’s bankruptcy court for a summary judgement against the satellite operator, arguing that Intelsat “repudiated” its agreement with SES over the C-band clearing.
This latest filing from June 16 is an update in the dispute between the two operators that has gone on for nearly a year as part of Intelsat’s bankruptcy proceedings. In July 2020, SES filed a $1.8 billion claim against Intelsat, claiming the two companies agreed to split C-band clearing proceeds equally, but Intelsat went back on that agreement. Both operators are in the midst of clearing the C-band spectrum for 5G use, as mandated by the FCC. Intelsat disputes the claims and has accused SES of running a “smear campaign” against the company.
The bankruptcy court has scheduled a two-week trial of SES’s claims to begin on September 20, but SES has asked for a summary judgement instead. A hearing on the summary judgment motions is scheduled for August 19.
SES’s latest, heavily redacted 80-page filing details collaboration with Intelsat from the onset of the C-Band Alliance (CBA) to prove that Intelsat broke its agreement. It mentions phone calls, emails, and communications from Intelsat senior leadership including CEO Steven Spengler; General Counsel Michelle Bryan; and CFO David Tolley that SES believes proves that Intelsat knowingly went back on its agreement.
After the FCC set a public auction, “Intelsat continued to work jointly with SES, stringing SES along — even toasting over celebratory drinks — until the parties had secured $9.7 billion in accelerated relocation payments. Hours after the FCC publicly announced the $9.7 billion amount, Intelsat called SES to say the 50/50 deal was off,” SES lawyers argue in the filing.
One redacted section details how Spengler called SES CEO Steve Collar at 3 a.m. to explain and “confessed” feelings on the situation, sounding “contrite.”
The final FCC order allows for roughly $4.9 billion in accelerated relocation payments for Intelsat and roughly $4 billion for SES. SES said its 50/50 interest in the difference is approximately $421 million.
Intelsat has argued that the FCC’s public auction approach voided the agreement with SES and says the parties did not consider such an approach.
But SES disagrees with that in the latest filing, and says that they knew a public auction was possible. SES said the agreement had points to address a possible public auction. While Eutelsat was able to leave the CBA without penalty, SES said that Intelsat and SES had strict termination requirements, and a public auction was not among those conditions.
“Intelsat’s abuse of the parties’ trust and interdependence, cultivated over more than a year of working hand-in-glove, demonstrates a willful, deliberate, bad-faith breach of fiduciary duties and calls for punitive damages,” SES argues.