WASHINGTON-Major lenders to C-block personal communications services licensee Pocket Communications Inc. have struck a tentative deal with the Federal Communications Commission and the Justice Department to buy the bankrupt company’s Dallas and Chicago clusters. Pocket’s remaining licenses would be returned to the FCC, and its remaining debt would be canceled.
According to a plan presented to the U.S. Bankruptcy Court, District of Maryland/Northern Division last Friday, Pacific Eagle Investments Ltd., Masa Telecom Inc., Ericsson Inc. and Siemens Telecom Networks, the lenders that have kept Pocket afloat since last spring, plan to form a new company-NewGSMCo-to build out and run the two areas. In addition, sources close to the bankruptcy said the lenders would put together a $5.5 million cash fund aimed at paying the administrative expenses of the estate; if any money is left over, it will be distributed to Pocket’s unsecured creditors.
FCC Chairman Bill Kennard commented, “The only thing I will say about Pocket is that what we do should not be seen as precedent for every subsequent bankruptcy issue that comes up, because each of them is so different. In the context of a bankruptcy reorganization, each one has a different set of players, a different set of creditors, and a different set of interests and needs.”
Kennard continued, “Pocket is a good example. There you have creditors who were very interested in GSM technology; that might not be replicated in other bankruptcies. You have to take each one case by case. We aren’t attempting in the Pocket bankruptcy to write case law. What we’re trying to do is work out a situation to everyone’s mutual satisfaction.”
No prices for Chicago and Dallas were released at the meeting, however, a payment schedule to be included in a public notice was scheduled for release Friday on the FCC’s Web site. At press time late Friday, that notice still had not been posted. The notice reportedly outlines the deal cut between the lenders, the FCC and Justice; and besides giving the public a forum to discuss the issue, it puts the two clusters out for a final sale. If anyone will pay more for Dallas and Chicago than will the lenders, NewGSMCo could be a moot deal. However, the commission has not released its definition of “higher and better” when it comes to topping NewGSMCo’s offering.
It is unknown at this time how the ownership and management structures of the new company look, two important issues in that the lenders or their parent companies are foreign entities. It also is unclear if Dan and Jan Riker, Pocket’s principals, are involved in any way. FCC attorneys Stewart Block and David Horowitz, who played parts in negotiating the agreement, would not comment on the meeting or the public notice. Siemens will release a press statement today.
Jack Robinson, president of National Telecom PCS Inc., whose company has a billion-dollar suit pending against Pocket that would include its licenses, said he would have to read the public notice before being able to comment.
