Pegasus Satellite unsecured creditors to see 50% to 60% recovery under confirmed reorganization plan

By Caroline Salls

Pittsburgh, April 15 - Pegasus Satellite Television Inc.'s unsecured creditors are expected to get a 50% to 60% recovery under the reorganization plan was confirmed Thursday by the U.S. Bankruptcy Court for the District of Maine.

Pegasus is liquidating its company and distributing the proceeds from the $938 million sale of its business to DirecTV to creditors via a liquidating trust.

Only the unsecured creditors were entitled to vote and they vote in favor after switching following last-minute negotiations with the company.

Creditors will be treated as follows:

*Classes 1A, 1B, IC and ID are secured claims, with creditors to receive 100% recovery;

*Classes 2A, 2B, 2C and 2D are priority non-tax claims creditors, which will get 100% recovery in cash;

*Class 3A creditors with general unsecured claims against Pegasus will get a 50% to 60% recovery through a share of the liquidating trust interests and/or liquidating trust available cash. The recovery is equivalent to 58% to 62% of the principal amount of the notes, excluding accrued interest. Pegasus has $899 million of the notes outstanding;

*Class 3B, 3C and 3D with general unsecured claims against Pegasus Media & Communications, the Pegasus Broadcast Television, Inc. debtors and the Pegasus Satellite Television, Inc. debtors will get 100% recovery in cash; and

*Classes 4A (subordinated claims), 5A-1 (preferred stock interests in Pegasus Satellite Communications, Inc.) 5A-2 (common stock interests in Pegasus Satellite Communications) will receive no distribution and 5B-2, C-2 and D-2 (common stock interests in Pegasus Media & Communications, Pegasus Satellite Television and Pegasus Broadcast Television, Inc.) will retain interests but are not entitled to receive dividends or other distributions under the plan.

Pegasus' pre-bankruptcy debt is comprised of senior secured bank debt through two term loan credit facilities and one revolving credit facility and unsecured bond debt. As of March 31, Pegasus had $1.5 billion in outstanding debt.

Pegasus Satellite Television Inc. filed for bankruptcy on June 2, 2004 with the U.S. Bankruptcy Court for the District of Maine. Its Chapter 11 case number is 04-20889.

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