NextWave informed U.S. Bankruptcy Court, White Plains, N.Y., Thur...
NextWave informed U.S. Bankruptcy Court, White Plains, N.Y., Thurs. that settlement agreement of carrier’s PCS licenses had been reached and that “the documents are being finalized,” NextWave Deputy Gen. Counsel Michael Wack said. Carrier told U.S. Bankruptcy Judge Adlai…
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Hardin in hearing that “the private parties [to agreement] may be able to sign those documents today.” Wack said necessary govt. signatures “may take a few days longer.” Bankruptcy judge also set Dec. 28 as date for hearing on motion to submit settlement agreement for court’s approval. NextWave is expected to file reorganization plan with court in Jan. Final approval by bankruptcy court is one of requirements of settlement agreement by FCC, Justice Dept., White House Office of Management & Budget, NextWave and more than dozen participants in Jan. re-auction of NextWave’s wireless licenses. Among recent changes in final rounds of negotiations is promissory note that U.S. govt. will provide to NextWave to provide extra layer of assurance that it will be paid, as long as all other aspects of settlement agreement are in place. Govt. still will be paid more than $10 billion before NextWave receives nearly $6.5 billion, which would be offset by remaining federal and state tax obligations. (Full payment to NextWave is $9.55 billion, but govt. would immediately withhold $3.05 billion as advance tax payment). According to copy of settlement agreement dated Nov. 6 obtained by Communications Daily, NextWave would agree to submit copy of settlement agreement to bankruptcy court within 15 days for approval. (Several sources have said vast majority of details agreed to late Nov. 6 have remained unchanged this week, although govt. was scheduled to put final signatures on document late Thurs.). Settlement agreement draft lays out terms under which govt. would make payment to NextWave on promissory note: (1) On 3rd business day after U.S. has received aggregate cash proceeds equal to or greater than $9.55 billion by reauction winners participating in settlement. (2) On Dec. 31, 2002. After promissory note is paid, NextWave would pay Verizon Wireless $118.1 million as long as Verizon has issued letter of credit to govt., which provides extra layer of guarantee that govt. will be paid. NextWave also would pay Alaska Native Wireless (ANW), designated entity in which AT&T Wireless has stake, $25 million under same terms. ANW and Verizon have agreed to furnish letters of credit to govt.