Judge Alfredo Pérez of the US Bankruptcy Court for the Southern District of Texas granted the motions of the US Trustee and the ad hoc noteholder group to appoint an examiner in the Hughes Satellite Systems Corporation’s Chapter 11 cases at Wednesday’s (26 August) hearing, directing the UST to appoint an independent examiner to investigate more than $1.5bn of allegedly self-dealing prepetition transactions between the debtors and non-debtor parent EchoStar Corporation.
The parties agreed to defer the fight over the examiner's scope, initial budget, and privilege access to a 17 September hearing. Per the order, the UST is to submit a proposed order on scope and initial budget by noon on 16 September.
The ruling rejects the debtors' argument that the Hughes special committee — comprising of two independent directors appointed by EchoStar Chairman Charles Ergen five days before the petition date — was sufficient to conduct any needed investigation.
Separately, Judge Pérez approved a second interim cash collateral order running through the week ending 25 September, kicking the final cash collateral fight — including a disputed roughly eight-fold hike in independent director compensation put in place days before the petition — to that date.
The backdrop
Hughes...
