Ma veniamo a NSR. Da quanto racconta Chris Forrester su RapidTV News, il primo slittamento risale alla metà di gennaio, quando tra il 22 e il 23 gennaio il tribunale del Delaware incaricato della gestione della dismissione delle proprietà Worldspace sotto la protezione del Chapter 11 della normativa fallimentare, avrebbe ricevuto, tra le obiezioni alla vendita, quella dei soci italiani di Worldspace Europe. New Satellite Radio avevo sostenuto davanti ai giudici americani che Worldspace non aveva alcun diritto di cedere il transponder del satellite AfriStar che Wordlspace Italia avrebbe dovuto utlizzare per diffondere i programmi al pubblico italiano, chiedendo di depennare questo transponder dai beni che Worldspace avave indicato nella sua lista degli assett. In pratica NSR asseriva che Worldspace aveva già conferito l'uso del transponder alla joint venture europea, perdendo di fatto il diritto di venderlo a qualcun altro. E' evidente che NSR vuole evitare il rischio di perdere la possibilità di usare il satellite AfriStar una volta che questo finirà nelle mani di qualcun altro.
Una mozione di emergenza di NSR è stata presentata anche il 22 febbraio, poco prima della nuova data fissata per l'asta, il 23. Riunito per l'occasione, il tribunale ha infine optato per un nuovo rinvio, al 6 marzo, anche per esaminare la controdocumentazione presentata da Worldspace per difendersi dalle pretese di New Satellite Radio. La tesi è che il transponder non è mai stato conferito a nessuno, il satellite AfriStar è pur sempre di proprietà di Worldspace e che i piani di Wordlspace Italia non erano altro che... Piani. Da quanto scrive RapidTV i giudici sarebbero propensi a negare la rivalsa presentata dalla società italiana, controllata da Class Editori. Le prospettive, per Worldspace Italia diventano sempre più incerte. I satelliti Worldspace potrebbero anche finire sotto il controllo di un operatore europeo come SES Astra, ma a quel punto la decisione sul progetto di pay radio satellitare verrà presa dal nuovo acquirente. Bisognerà aspettare l'esito della gara, tra poco più di una settimana.
Worldspace allegations over sale
Jan 22 and 23 saw a flurry of formal objections filed at the Delaware Bankruptcy Court which is looking after the Worldspace Chapter 11 restructuring. One claims Worldspace does not own everything on sale.
Most of the objections refer to understated debt amounts, with some showing considerable shortfalls in Worldspace’s calculations. Perhaps more important, however, was a detailed allegation from Worldspace’s Italian partners that the bankrupt broadcaster is deliberately attempting to sell “assets it does not own”.
Today (January 26) an auction of Worldspace assets is due to take place, and on Friday the Court is scheduled to decide who takes over the business, dependent on the bids made at today’s auction. The motions now before the Court could scupper those plans.
The major objection on Jan 23 was from New Satellite Radio SRL (NSR), the joint-venture business that Worldspace had in place with Italy’s Class Editori to develop a European radio system. NSR is claiming that Worldspace’s Chapter 11 forward plans, when the business is acquired by a new owner this week, would potentially see the Worldspace/NSR agreement assigned without preserving certain valuable rights.
The Italian filing to the Delaware Court states specifically that Worldspace “are attempting to sell assets it does not own, including the Worldspace NW AfriStar beam, the 40 channels utilising the beam, and other property already contributed to [Worldspace Italy] under the Partnership Agreement”.
The document continues, saying: “New Satellite Radio is a 35% owner of Worldspace Italy, with the balance owned by WSH, a Danish company. Worldspace directly owns 100% of WSH. Neither WSH nor Worldspace Italy are Debtors in this case and are not otherwise in bankruptcy. Worldspace Italy was formed to create and implement satellite radio in Italy. Worldspace Italy is incorporated in Italy.”
New Satellite Radio in its filing then explains how the above mentioned assets, and others, were ‘invested’ by Worldspace as their contribution to the Italian venture. The documents show that Worldspace Italy could use the 40 channels of bandwidth “free of charge” for 7 years. The document states that the Italian company has entered into various contracts with third parties to implement satellite radio in Italy, and has “performed substantially” all of its contributions to the Partnership Agreement, not least securing auto contracts with Fiat and Ferrari, procuring terrestrial repeater locations and installations, and obtained Italian broadcast authorisations.
NSR says it remains supportive of Worldspace being sold, but that the “efforts respect the Italian Project” and says that the sale motion is “premature”.
Other complaints came from electronics specialists Delphi, which outlined that Worldspace’s valuation of its debt obligations to Delphi is wrongly stated. Similar objections come from research institute Fraunhofer, Italian automaker Fiat, and others.***
Worldspace sale today
Pay-radio broadcaster Worldspace has its Chapter 11 auction sale scheduled for today, Feb 23. The event takes place at 10am local time in the offices of Shearman & Sterling LLP, in New York.
Qualified bids actually had to be submitted in writing last week (by Feb 18) together with the financial background to the bidding company and other relevant documents. The auction takes place only where there are rival bidders for the same specified asset.
The final stage is before the judge in case, Judge Peter J Walsh, and is scheduled to take place this Wednesday, on Feb 25. This is a re-run of an earlier sale process, which was abandoned because there were no qualified bidders, according to Court documents.
Last Friday, Feb 20, saw a flurry of Court Motions filed in the case. Most were routine, but one from New Satellite Radio SrL, already a creditor of Worldspace and in essence representing Worldspace’s partners in their European operations, which argued (not for the first time) that Worldspace was selling assets it was not entitled to sell. New Satellite Radio wanted sight of the bids submitted, “because [Worldspace] are seeking to sell Non-Debtor assets for which NSR has an indirect interest and which are vital to its business.”
The Emergency Motion further argued that despite it not bidding for the distressed assets, it should still be able to examine the submitted bids.***
NSR fails in Worldspace legal challenge
On Feb 23 we reported the then-impending auction of Worldspace’s assets, and the objections to the sale from New Satellite Radio (NSR) which in a Motion before the Court argued that Worldspace was selling assets it was not entitled to sell. NSR seems to have lost the argument.
NSR was asking the Court to permit it to see what bids had been submitted. NSR is the European joint-venture with Worldspace which contains players like Fiat.
Worldspace itself, as well as the Official Committee of Unsecured Creditors, objected to allowing NSR sight of the bids, nor did they want to permit an emergency teleconference to discuss bids. “In this instance the Committee staunchly opposes the release of bids to NSR,” said their Court Motion, “as [we] believe it could have a detrimental affect on the sale process.” Their argument continued, saying, “The next several days are critical…as all professionals are working feverishly on negotiating the terms of the sale. NSR’s requests are nothing more than ill-timed distractions to this critical process.”
Today, Feb 25, there are a series of hearings scheduled before bankruptcy judge Peter J Walsh, including the formal Sale Hearing (scheduled for 2pm), which will determine how the Worldspace assets are distributed.***
Legal unhappiness over Worldspace sale
On Feb 25 the sale process for Worldspace’s assets was originally due to have been taking place at a Delaware bankruptcy court. A last-minute postponement pushes the Hearing Date back to March 6. Meanwhile, Worldspace filed a massive 192-page document that said – in effect – that its former European partner New Satellite Radio SrL, had made “unfounded and unconvincing” assertions that Worldspace was selling assets it was not entitled to sell.
The basis for NSR claims is that contracts and exchanges of letters between itself, and its partners (Worldspace Italia), and Worldspace formed agreements whereby NSR would use capacity on AfriStar to beam satellite radio services to Europe, and in particular Italy. The agreements amounted to an “indefeasible right of use” (IRU) to supply more than 40 channels of audio using the Northwest beam of Afristar.
“WorldSpace Italia was never granted an IRU or any other ownership right,” says the Feb 25 document. “At most WSI has an executory, contingent, contractual right of future use of the AfriStar satellite. WSI never acquired an IRU or any other ownership right in the AfriStar satellite broadcasting capacity.” The affidavit then goes on to list all the reasons why neither WSI or NSL had any reason to assume those alleged rights.
Rapid TV News is of the (non-legal) opinion that this action, like all else of the catastrophe that surrounds Worldspace, will no doubt run and run and provide guaranteed income for an army of lawyers for some considerable time yet.