Intelsat’s $115 Million Make-Whole Deal Draws Creditor Challenges

Intelsat SA’s creditors pushed back on the satellite company’s proposed $115 million settlement with noteholders, calling the deal an unnecessary gift to garner support for its reorganization plan.

Intelsat said the deal, which is part of the company’s broad plan to reorganize, would avoid costly and protracted litigation over make-whole premiums potentially owed to investors holding $1.8 billion of first-lien notes. The McLean, Va.-based company’s May 2020 Chapter 11 filing potentially triggered a default event that would require paying the premiums.

The noteholders’ claims for the premiums are unenforceable under controlling legal precedent, and Intelsat continued making interest payments on ...