Evan Marriott
01-31-03, 02:39 PM
StarBand Gets Court OK For Microsoft Agreement
By TOM BECKER
Of DOW JONES NEWSWIRES
WILMINGTON, Del. -- StarBand Communications Inc. Thursday won court approval of an agreement with Microsoft Corp. (MSFT) that will give the debtor company the first crack at signing up Microsoft customers.
The order signed by Chief Judge Peter J. Walsh of the U.S. Bankruptcy Court in Wilmington, which is overseeing StarBand's Chapter 11 proceedings, terminates a contract between StarBand and Microsoft.
Microsoft had provided internet access to its satellite customers via StarBand's satellite services and equipment. Microsoft is no longer going to offer the satellite access to its subscribers.
As a result, 1,100 satellite customers will need to find a new internet service provider. That's where StarBand comes in.
In exchange for terminating its contract with StarBand early, Microsoft will make StarBand's services the first option for the customers. StarBand said that because the subscribers are already using StarBand equipment it is well-positioned to convert a significant number of the customers, according to court documents.
For every subscriber that converts to StarBand's services, the company will receive an extra $25 in revenue every month, according to court documents.
As part of the agreement, Microsoft and StarBand agreed to release each other from any liability or obligations arising out of the original contract, according to Judge Walsh's order.
Microsoft owns roughly 19% of StarBand's common stock. Microsoft invested approximately $50 million for its interest in the debtor company, and it held a seat on the board of directors from April 2000 to September 2001.
In addition to Microsoft, StarBand is the satellite services unit of Gilat Satellite Networks Ltd. (GILTF) and EchoStar Communications Corp. (DISH).
StarBand filed for Chapter 11 bankruptcy protection May 31, 2002. The McLean, Va.-based company listed liabilities of more than $229 million against assets of $58 million in its petition.
-Tom Becker; Dow Jones Newswires; 302-656-8830
By TOM BECKER
Of DOW JONES NEWSWIRES
WILMINGTON, Del. -- StarBand Communications Inc. Thursday won court approval of an agreement with Microsoft Corp. (MSFT) that will give the debtor company the first crack at signing up Microsoft customers.
The order signed by Chief Judge Peter J. Walsh of the U.S. Bankruptcy Court in Wilmington, which is overseeing StarBand's Chapter 11 proceedings, terminates a contract between StarBand and Microsoft.
Microsoft had provided internet access to its satellite customers via StarBand's satellite services and equipment. Microsoft is no longer going to offer the satellite access to its subscribers.
As a result, 1,100 satellite customers will need to find a new internet service provider. That's where StarBand comes in.
In exchange for terminating its contract with StarBand early, Microsoft will make StarBand's services the first option for the customers. StarBand said that because the subscribers are already using StarBand equipment it is well-positioned to convert a significant number of the customers, according to court documents.
For every subscriber that converts to StarBand's services, the company will receive an extra $25 in revenue every month, according to court documents.
As part of the agreement, Microsoft and StarBand agreed to release each other from any liability or obligations arising out of the original contract, according to Judge Walsh's order.
Microsoft owns roughly 19% of StarBand's common stock. Microsoft invested approximately $50 million for its interest in the debtor company, and it held a seat on the board of directors from April 2000 to September 2001.
In addition to Microsoft, StarBand is the satellite services unit of Gilat Satellite Networks Ltd. (GILTF) and EchoStar Communications Corp. (DISH).
StarBand filed for Chapter 11 bankruptcy protection May 31, 2002. The McLean, Va.-based company listed liabilities of more than $229 million against assets of $58 million in its petition.
-Tom Becker; Dow Jones Newswires; 302-656-8830