The judge presiding over Intelsat SA’s bankruptcy case denied stockholders an official voice in how the satellite communications company’s $15 billion in debt is restructured, saying they couldn’t show a “substantial likelihood” that holders of equity stakes are entitled to a recovery, WSJ Pro Bankruptcy reported. Judge Keith L. Phillips of the U.S. Bankruptcy Court in Richmond, Va., declined to order the appointment of an official committee to represent shareholders, cover their legal fees from Intelsat’s coffers and give them more sway over restructuring talks. The judge said that there wasn’t a substantial likelihood that the Intelsat parent company, rather than a subsidiary, has first claim on nearly $5 billion in expected payments from the Federal Communications Commission. The interests of stockholders also are being advanced by other constituencies, including a group of convertible bondholders, making an equity committee unnecessary, the judge added. Only in rare instances do equity shareholders receive a recovery in corporate bankruptcies, usually only when the debt is paid in full and there is cash left over.
