WASHINGTON—Motient Corp. said Chairman Steven Singer and four other directors will not seek re-election at the wireless company’s annual meeting, a development that comes at a time when Highland Capital Management L.P.—the company’s largest single investor—is lodging a proxy fight to completely revamp the board.
Motient, with a legacy wireless data network and significant ownership in two mobile satellite service companies, said board changes are not a response to Highland’s campaign to oust Motient’s board of directors.
“In preparation for the 2006 annual meeting of our stockholders, our nominating committee has decided to reconstitute the board to best support Motient’s strategic direction and protect and serve our stockholder’s interests,” said Motient. “Gerald Goldsmith, Gerald Kittner, Steven Singer, Jonelle St. John and Barry Williamson provided Motient with invaluable expertise and insight over the last few years and we thank them for their contributions. Despite Highland’s meritless allegations, they are departing with successful track records of service.”
Highland’s James Dondero has filed various lawsuits, the most recent last week in Delaware, accusing Motient of gross mismanagement, extensive board and management self-dealing and conflicts of interest.
Motient gave notice of board departures and proposed replacements in filings yesterday and today at the Securities and Exchange Commission. Motient said it intends to file its preliminary proxy statement and set a date for its annual shareholder meeting before the end of the week.
“As we move forward with our strategic plan, a board composed of individuals who bring new perspectives and industry expertise to the task of guiding the pursuit of our next phase of development will enhance our efforts. Raymond Steele, David Meltzer, Jacques Leduc, David Grain and David Andonian come to Motient with a wealth of industry and operational expertise that is directly relevant to the needs of Motient and our interests in MSV and TerreStar.” The five men are current board members. The new board pushed by Motient also would include Robert Brumley, president and chief executive officer of TerreStar Networks Inc.
Motient holds 49 percent and 61 percent stakes in Mobile Satellite Ventures L.P. and TerreStar Networks, respectively.
“Highland remains committed to ensuring Motient has a board and new management team that is working in the best interests of Motient stockholders,” said Denise DesChenes, spokeswoman for Highland.
Kittner, chairman of Motient’s nominating committee, stated, “I am proud to have served Motient over the past several years, as are my colleagues on the board. Together, we have navigated the company forward despite the adversarial initiatives of Mr. Dondero and Highland Capital. Though meritless, Mr. Dondero’s attacks increased the complexity of many issues, yet the board was able to accomplish each one of its goals.”
Motient, which emerged from bankruptcy in 2002, lost $158.4 million on revenues of $13.8 million in 2005. Motient had revenues of $36.9 million and $54.5 million in 2004 and 2003, respectively.
The Lincolnshire, Ill., company is betting on a new satellite architecture—which required federal regulatory approval—allowing MSS operators to supplement networks with land-based cellular networks. Doing so could enable MSV, TerreStar and other MSS operators to deliver service to small hand-held wireless phones, rather than large satellite phones used by government but largely a dud in the consumer space. Motient is also looking for a major telecom partner.
