WASHINGTON-The federal government is expected Thursday to ask a U.S. bankruptcy judge in Baltimore to extend the so-called drop-dead date on the personal communications services licenses awarded to Pocket Communications Inc. in the C-block auction so the government can continue negotiating with the debtors-in-possession lenders.
Also, as many as six companies could have placed bids for some or all of Pocket’s licenses.
By the end of this week, Pocket is required to return its PCS licenses to the Federal Communications Commission for re-auction, following the expiration of the automatic stay. This date previously has been extended numerous times throughout the year.
If Judge E. Stephen Derby of U.S. Bankruptcy Court for the District of Maryland-Northern District rejects the extension, the Pocket licenses would revert to the FCC.
The government is reviewing alternative proposals received last month to replace the proposed transaction the government is negotiating with the DiP lenders. The DiP lenders, Ericsson Inc., Siemens Telecom Networks, Masa Telecom Inc. and Pacific Eagle Investments Ltd., want to create a new company, NewGSM Co., which would keep and build the Dallas and Chicago markets. The rest of Pocket’s licenses would be returned to the FCC for re-auction.
The details of the original proposed transaction were released by the FCC March 23, but it appears from comments by FCC officials that in addition to reviewing the alternative proposals, the FCC also is attempting to negotiate with the DiP lenders for a better deal.
It is believed the FCC received six “higher and better offers.” FCC sources only would confirm that this number is “in the ballpark.”
The proposals were submitted by National Telecom PCS, Western Wireless Corp., Omnipoint Communications Inc., Arch Telecom, Hawaii PCS, and Edward Johnson, said NatTel’s Jack E. Robinson.
Robinson said his proposal offers to pay $10 million in cash-$4.8 million would go to the DiP lenders and $5.2 million would go to Pocket’s creditors-and NatTel would assume all of the licenses for 10 percent of what Pocket bid (this is the less-90-percent deal awarded in April to General Wireless Inc. in another bankruptcy case) and NatTel would drop both its $1 billion antitrust lawsuit against Pocket and its license challenge at the FCC.
The Hawaii PCS proposal, according to Robinson, returns all of the licenses except those in the Pacific to the FCC and pays $1 million to the creditors and pays 50 percent of the Pocket’s bid for those licenses to the FCC.
Lawyers for both Omnipoint and Western Wireless said their proposals are confidential and cannot be released.
Attempts to reach representatives for the other bidders were unsuccessful.
Pocket originally bid more than $1 billion for 43 licenses for markets, including Chicago, New Orleans, Honolulu, Dallas, Las Vegas and St. Louis.
In addition to ruling on the extension of the drop-dead date, Judge Derby must rule on whether Pocket can participate in the C-block elections occurring June 8. All C-block bidders are expected to choose one of several debt restructuring options by that date.
The FCC is expected to ask Derby to allow Pocket to participate in the C-block election but that Pocket’s choice be kept in escrow. This scenario would allow Pocket to participate in the election but Pocket would not actually move forward based on that choice until the FCC has decided whether to accept the DiP proposal, one of the alternative proposals or to step away from bankruptcy proceeding.
