TerreStar: Lender Liens And FCC Licenses

Law360, New York (September 1, 2011, 2:54 PM EDT) -- In a recent decision[1] involving TerreStar Networks Inc. and its affiliates (the “debtors”), the U.S. Bankruptcy Court for the Southern District of New York held that the debtors’ noteholders held a valid lien on the economic value of a license granted to TerreStar by the U.S. Federal Communications Commission and that nothing in Article 9 of the New York Uniform Commercial Code (NYUCC) or Section 552 of the Bankruptcy Code invalidated that lien.

The question of whether a secured lender can obtain a valid lien on...
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