WASHINGTON-A federal bankruptcy judge in Baltimore last week ordered the Federal Communications Commission to surrender to unsecured creditors of Pocket Communications Inc. information intentionally omitted from the company’s reorganization plan provided last month by the FCC, Justice Department and several vendors.
The Creditors Committee argued knowledge of the entire Pocket reorganization plan is necessary to evaluate the proposal and to determine whether or not to make a counteroffer.
The FCC, Justice and lenders with secured claims-Pacific Eagle Investments Ltd. and its subsidiaries, Masa Telecom Asia Investment Pte. Ltd., Ericsson Inc. and Siemens Telecom Networks-said the redacted information was irrelevant and would cause great harm to the lenders and Pocket’s successor, NewGSM Co., if it was made public.
Judge E. Stephen Derby said secured lenders and the FCC “have not made any showing whatsoever as to which secret provisions disclose this (proprietary information and internal business planning) information. Nor have they shown what terms of the public version term sheet would be considered by the FCC in judging whether any other proposal would be an acceptable alternative. FCC approval is essential for a competing plan to be a higher and better alternative that would enable these debts to reorganize in this court for the benefit of this bankruptcy estate.”
Given that, Derby ordered the FCC to disclose information withheld from unsecured creditors. “To find otherwise,” he said, “would be to endorse secrecy in bankruptcy proceedings as a general matter.”
Public comments on the Pocket reorganization plan are due May 7 at the FCC.
Pocket filed for bankruptcy protection after failing to come up with money to begin paying the $1.43 billion it pledged for the 43 personal communications services licenses it won in the C-block auction in May 1996.
Key telecom lawmakers are angry that Pocket and its creditors are better off than other financially strapped firms under the FCC’s new debt restructuring plan.
Meanwhile, Pocket still faces a $1 billion antitrust lawsuit and a challenge to its licenses from National Telecom of Stamford, Conn.
