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TerreStar Junior Lenders Sue To Void Satellite Liens

Law360 (January 19, 2011, 5:58 PM EST) -- Unsecured creditors of bankrupt communications firm TerreStar Networks Inc. are suing secured lender U.S. Bank NA to void the bank’s liens against one of the company’s satellites.

The complaint, filed Tuesday in the U.S. Bankruptcy Court for the Southern District of New York, alleges that the satellite — TerreStar-2 — and related assets are excluded property that was “carved out” from U.S. Bank’s collateral when the debtors pledged the assets to secure a $100 million loan for the satellite’s construction.

U.S. Bank, as indenture trustee for...
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