Telecommunications

Sonnenschein's Corporate Reorganization & Bankruptcy, Telecommunications, Corporate, Litigation, Real Estate, Taxation and other practice groups have handled a wide variety of bankruptcy, restructuring, workout and related issues across the nation and globally related to nearly every aspect of the telecommunications and communications industries.  Areas in which Sonnenschein has particular expertise include:

• Discussing options relating to Chapter 11 reorganization, including credit counseling, formulating and negotiating debtor-in-possession financing arrangements, asset sales and plans of reorganization
• Reciprocal services agreements and related setoff issues
• Rejection, assumption, assignment, and specific performance of executory contracts
• Taxation issues, including excise and other telecommunications-based taxes
• Treatment of rights of way and easement agreements
• Regulatory compliance, including licensing concerns such as license applications, renewals and transfers, and treatment of FCC licenses and other governmental debts and claims in bankruptcy
• Treatment of IRU agreements for customer-owned dark fiber networks
• Rights vis-à-vis third-party service providers

Representative Engagements

The following is a summary of certain of the matters in which we have been actively involved for the party or parties noted in the descriptive text and that are of a public nature.  There are also representations in non-public matters that are not discussed by name herein. 

NewComm Wireless Services, Inc. (P.R.): 
We represented NewComm Wireless Services, Inc., a wireless communications company, as debtor and debtor-in-possession in its Chapter 11 case.  NewComm owns and operates a cellular telephone network in Puerto Rico with approximately 90,000 subscribers.  Its Chapter 11 case is among the largest ever filed in that district.  Sonnenschein professionals filed the case with an interrelated transaction consisting of:  (i) a $38 million DIP financing facility, (ii) an asset purchase agreement for approximately $110 million, and (iii) a $17 million network upgrade and buildout.  Sonnenschein attorneys also represented the company in litigation against a creditor, who had commenced (but immediately dismissed) an involuntary proceeding against the company several months prior to its voluntary bankruptcy filing. We negotiated a settlement agreement that resulted in the subordination of over $100 million in claims of a former affiliate. A Section 363 auction was held that resulted in $40 million in overbidding. This allowed confirmation of a plan that paid general unsecured creditors in full. Prior to the auction, the unsecured creditors risked little or no recovery of their claims. Equity holders and the subordinated claims also received distributions under the plan.

Loral Space & Communications, Ltd. (S.D.N.Y.): 
We represented the equity committee in the Chapter 11 cases of Loral Space & Communications, Ltd. and its affiliates.  Loral manufactures and operates geostationary satellites that operate at altitudes of 22,000 miles above the earth and provide telecommunications service and direct-to-home television broadcasts to users located around the world, generating typical annual revenues in excess of $2 billion.  The equity holders were principally concerned with ensuring that Loral's businesses were valued properly.  The cases culminated in a heavily contested two-week confirmation hearing in which competing valuations, each supported by significant and complex expert testimony, were proffered by the debtors, the creditors committee and the equity committee.

Digital Teleport, Inc. (E.D. Mo.): 
We represented the Chapter 11 debtor and its affiliates in this case.  The company's main business is high-bandwidth fiberoptic networks that transmit information from main trunk lines to local service providers in the Midwest.  Early in the case, the debtor shed a series of agreements pertaining to the usage of dark fiber.  Generally, Sonnenschein was able to obtain waivers of rejection damage claims.  Certain non-core fiber routes were sold to third parties.  Also important to the case were material issues with rights of way agreements with state departments of transportation and local municipalities.  The business ultimately was sold as a going concern to an affiliate of CenturyTel and a distribution of approximately 90 cents on the dollar was paid to unsecured creditors.

Plan B Communications, Inc. (S.D.N.Y.): 
We represented the debtor-in-possession in this Chapter 11 case.  The debtor is a regional provider of local telephone service in the northeastern United States.  Through effective negotiation with the company's creditors, we were able to implement comprehensive financial and operational restructuring necessary to allow the company to emerge from Chapter 11 as a viable operating business.

Future Link Corp. (S.D.N.Y.): 
We represented the Chapter 11 debtors in these cases.  The debtors' businesses included providing server-based computing, application support, information security, technical support and hardware sales to an international customer base.  We have effectively used the Chapter 11 case to conduct an orderly liquidation of essentially all the debtors' assets for the benefit of their creditors.

Onsite Access LLC (S.D.N.Y.): 
We represented a purchaser of substantial and valuable fiberoptic telecommunications infrastructures from the debtor in this Chapter 11 case.  These transactions included negotiating related customer service contracts.

AmCom General Corporation (Del.): 
We represented the debtors in these Chapter 11 cases.  These cases involved selling radio stations to a higher (and better) bidder after voiding a prior purported purchase agreement.  The sale included securing FCC approval of the stations' licenses.

Regulatory Compliance: 
Members of our firm have extensive experience advising clients on FCC and state regulatory requirements in connection with the sale of telecommunications assets and transfer of control transactions for bankrupt and restructuring carriers.  We advise clients on requirements for discontinuance and disconnection of telecommunications services to customers in certain markets and notice to customers of the sale of assets and transfer of control.  We also represent clients in obtaining FCC and state regulatory approvals for the transfer of control of these assets.

Other Key Engagements: 
We represented the Official Committee of Unsecured Creditors in the Chapter 11 case of CellNet Data Systems, Inc., a provider of wireless fixed data communications networks for the utility industry.  In the ICG Communications, Inc. Chapter 11 case, we represented Sun Microsystems, a material lessor of essential equipment.  In each of the In-Flight Phone Corporation and Orbcomm Global, L.P. Chapter 11 cases, we represented an indenture trustee who also served as a member of the creditors committee.

In the matter of Open Port Technology, an Illinois telephony services company, we represented the assignee for the benefit of creditors who then sold the assets to a strategic buyer.  We represented a commercial customer who had reciprocal capacity agreements with Adelphia Communications, Inc. in its Chapter 11 cases.  We also represented a group of television stations in an out-of-court workout of their loans.
 
Sonnenschein regularly represents a number of large wireless carriers, including Alltel Wireless, T-Mobile, Sprint Nextel, US Cellular and Rural Cellular, on a wide variety of matters including federal and state regulatory matters, and  transactional, intellectual property and litigation matters.  In addition, Sonnenschein represents CTIA-The Wireless Association, the leading U.S. and international trade association for wireless carriers.  Sonnenschein also has significant experience with the various issues related to the development and installation of cellular phone towers, including siting, zoning, environmental and historic preservation issues.