Hughes Satellite Systems Corporation - Chapter 11 Case Summary

Business Description

Hughes Satellite Systems Corporation ("HSSC"), along with its Debtor affiliates (collectively, the "Debtors" and, together with HSSC's non-Debtor subsidiaries, "Hughes" or the "Company"), is a global provider of satellite communications and broadband technology. Over the past five decades, the Company has developed technologies that reshaped the satellite communications industry, including very-small-aperture terminal ("VSAT") technology in 1984, the first consumer satellite broadband services in the 1990s, and the proprietary JUPITER™ high-throughput satellite system, together with a fleet of satellites utilizing that technology, from the 2000s through the 2020s.

The Company manages its business activities and reports its financial results as a single operating segment—the Hughes segment—which constitutes the Broadband and Satellite Services segment of non-Debtor parent EchoStar Corporation ("EchoStar"). Within that segment, Hughes serves three principal customer groups:

• Consumers: broadband internet service to approximately 641,000 subscribers across rural and underserved communities in North and South America.
• Enterprise and government customers: managed connectivity, defense communications, satellite networking solutions, and in-flight broadband delivered worldwide.
• Satellite operators: satellite ground systems, antennas, and terminals designed and manufactured by the Company and deployed in 100 countries.

Satellite Network

Hughes serves its customers across both geostationary orbit ("GEO") and low earth orbit ("LEO") satellite networks.

• The GEO network comprises a fleet of six satellites orbiting roughly 22,300 miles above the equator, supported by 69 terrestrial gateways worldwide—assets representing billions of dollars of capital investment by the Company and its non-Debtor affiliates.
• The Company has also invested in next-generation LEO capabilities, including advanced LEO ground systems, flat panel antenna technology, multi-orbit terminal technology, and interoperable network platforms intended to deliver lower-latency, higher-throughput connectivity.
  • According to the Company, these investments position Hughes as a ground infrastructure and managed services layer for the expanding global LEO constellation market, complementing and extending the reach of its GEO network.

Financial and Workforce Profile

• The Company generated approximately $1.4 billion in consolidated revenue for the fiscal year ended Dec. 31, 2025.
• The consumer broadband business has experienced structural declines driven by LEO competition, while the enterprise and government business is growing and is expected to be an important component of the Company's strategic future.
• The Debtors employ approximately 1,275 individuals in the United States and hold more than 800 active and pending patents spanning satellite waveform technology, phased-array antenna design, multi-transport network architectures, and 5G non-terrestrial network systems.

The Debtors' Chapter 11 Cases are separate from, and are being separately administered from, the chapter 11 cases commenced on June 30, 2026 by certain other EchoStar subsidiaries and affiliates of the Debtors before the same Court, jointly administered under the caption In re DISH DBS Corporation, DISH Wireless L.L.C., et al., Case No. 26-90627 (Bankr. S.D. Tex.) (CML) (the "DISH Chapter 11 Cases"). The DISH Chapter 11 Cases pertain solely to EchoStar's Pay-TV segment and its legacy Wireless segment and do not relate to the Broadband and Satellite Services segment operated by the Company.

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Corporate History

Hughes was founded in 1971 in Rockville, MD, operating out of a residential garage to assemble circuit boards for telecommunications products. The Company moved quickly from those origins into satellite development, designing satellite ground systems and commercial satellite networking technology.

VSAT and the Consumer Broadband Era

• In the 1980s, the Company developed and commercialized VSAT technology, which allowed businesses to connect to satellites through compact, customer-site ground terminals in place of the large, expensive ground stations that had previously made satellite connectivity impractical for most commercial users.
• Walmart became the first commercial VSAT customer in 1984. Over the following decade, Hughes expanded VSAT networks across the retail, financial services, and petroleum industries.
• In the late 1990s, the Company launched DirecPC, the world's first consumer satellite broadband service, and has shipped more than 11 million satellite set-top boxes globally.

JUPITER Platform Development

• In 2009, the Company operated SPACEWAY 3, the world's first commercial Ka-band GEO satellite, establishing the technological foundation for the JUPITER high-throughput satellite system.
• Hughes has since scaled that system across three successive generations of satellites and network infrastructure—JUPITER 1, JUPITER 2, and JUPITER 3—which together deliver over 820 Gbps of Ka-band capacity to customers throughout the Americas. The Debtors own two of the three satellites and lease the third from a non-Debtor affiliate.

Ownership and Reporting

• HSSC is a direct, wholly owned subsidiary of EchoStar, a publicly traded, diversified telecommunications company that is not a debtor in these or any other chapter 11 cases.
• HSSC and its subsidiaries operate under the HUGHES® brand, which includes the Hughesnet®, HughesON™, and JUPITER™ brands.
• HSSC is itself a separate reporting company that files periodic reports with the SEC, including annual reports on Form 10-K and quarterly reports on Form 10-Q.

Organizational Structure

Each of the following direct or indirect wholly owned subsidiaries of HSSC is a Debtor in these Chapter 11 Cases and a guarantor of HSSC's outstanding funded debt:

• Hughes Network Systems, LLC: the Debtors' primary operating subsidiary, through which the consumer broadband, enterprise, aeronautical, government, technology, and manufacturing operations are conducted, and which holds various FCC licenses related to the Company's orbital and terrestrial satellite assets.
• HNS License Sub, LLC: holds certain FCC and other regulatory licenses and authorizations used in the Debtors' operations.
• EchoStar Orbital L.L.C.: holds certain orbital assets used in the Debtors' operations.
• EchoStar Satellite Services L.L.C.: holds certain legacy orbital assets, including two legacy communications satellites, and continues to receive revenues from customers that have purchased capacity on those satellites.
• HNS Real Estate, LLC: holds certain real property interests utilized in the Debtors' operations.
• Hughes Network Systems International Service Company: supports the Debtors' international enterprise operations.
• HNS Americas, L.L.C.: conducts enterprise and managed services operations across Latin America, with local operating subsidiaries in Colombia, Mexico, Costa Rica, Peru, Chile, Ecuador, Panama, and Argentina, among other countries.
• HNS Americas II, L.L.C.: holds certain additional Latin American operational assets and equity interests.
• HNS-India VSAT, Inc.: the U.S. holding entity for the Debtors' Indian operations and parent of the local Indian entities.
• Hughes Communications, Inc.: an inactive, intermediate holding company.
• EchoStar Government Services L.L.C.: an inactive subsidiary.

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Operations Overview

Hughes operates three lines of business within its single Hughes segment—consumer broadband, enterprise and government services, and satellite technology and manufacturing—each leveraging the Company's proprietary satellite platform, global ground infrastructure, and multi-transport networking capabilities.

Consumer Broadband

The Company provides satellite broadband internet under the Hughesnet brand, primarily to residential and small-to-medium business customers in rural and underserved communities in North and South America. Service is delivered through a fleet of three high-throughput Ka-band geostationary satellites:

• JUPITER 1 (EchoStar XVII): Debtor-owned; launched July 2012 with 120 Gbps of capacity at 107° West longitude.
• JUPITER 2 (EchoStar XIX): Debtor-owned; launched December 2016 with 200 Gbps of capacity at 97.1° West longitude.
• JUPITER 3 (EchoStar XXIV): leased from EchoStar XXIV L.L.C., a non-Debtor EchoStar subsidiary. One of the world's largest and most powerful high-throughput geostationary satellites, with 500 Gbps of capacity at 95.2° West longitude.
  • Launched in July 2023, JUPITER 3 addressed critical capacity constraints while expanding coverage into Latin America.

As of the Petition Date, the Company had approximately 641,000 broadband subscribers. The consumer business is cash-generative and is expected to fund the Company's investment and anticipated growth in enterprise and government opportunities.

Enterprise and Government Services

The enterprise and government business is the Company's fastest growing and currently most strategically important line of business, comprising four primary offerings:

• North America managed services: SD-WAN, cybersecurity, and private 5G connectivity delivered to enterprise customer sites across the retail, financial services, petroleum, hospitality, and other corporate markets, serving major national retailers, restaurant chains, banks, and petroleum companies.
• Aeronautical connectivity: multi-orbit in-flight internet access for commercial airlines under multi-year agreements, integrating Ka-band GEO and Ku-band LEO satellite service through the Company's proprietary antenna systems.
• Defense and intelligence communications: secure, resilient satellite and 5G communications systems for the U.S. government and allied defense programs.
• International enterprise: managed satellite and hybrid networks for multinational corporations, telecommunications operators, and government clients across Latin America, Europe, India, and the Middle East.

As of March 31, 2026, the Company held approximately $1.5 billion in contracted enterprise backlog. These services are enabled in part by a fleet of six satellites providing Ka-band and Ku-band coverage across the Americas and Europe.

• Alongside the JUPITER 1, JUPITER 2, and JUPITER 3 satellites, the Company holds capacity leases on three additional satellites serving enterprise and government customers in the Americas and Europe: Eutelsat 65 West A, Telesat T19V, and EchoStar 105/SES-11.

Satellite Technology and Manufacturing

The Company designs, develops, and manufactures satellite ground systems, electronically steered antennas, modems, gateways, and user terminals deployed by satellite operators and government agencies worldwide. Its proprietary satellite platform is used by satellite operators across six continents, and the JUPITER antenna and gateway product line is central to the growing aeronautical business.

• The Debtors' 140,000-square-foot manufacturing facility in Germantown, MD is compliant with applicable U.S. government regulations, including the International Traffic in Arms Regulations ("ITAR"), Export Administration Regulations ("EAR"), and requirements applicable to Controlled Unclassified Information ("CUI").
  • That compliance qualifies the Company for defense and national security contracts requiring domestic, controlled-access manufacturing.
• The Company is active across a range of U.S. and allied defense programs, including protected satellite communications ground system development, private 5G network deployments for defense customers, satellite communications modems integrated on defense contractors' products, and technology development contracts awarded by the U.S. government.

Regulatory Framework

The Company's U.S. satellite operations are regulated by the Federal Communications Commission (the "FCC") under the Communications Act of 1934, as amended.

• The Company's FCC licenses authorize the operation of satellites at specific geostationary orbital positions and in specific spectrum bands, as well as the operation of earth stations and gateways used to communicate with those satellites in the same bands. Such licenses are generally subject to periodic renewal, and the Company's licenses have historically been renewed on a routine basis.
• The Company is also subject to FCC rules governing interference protection, signal strength, satellite construction milestones, technical operating parameters, annual reporting, and annual regulatory fees applicable to its orbital assets and ground infrastructure.
• In operating its business, the Company must comply with U.S. export control and trade sanctions laws and regulations, including the EAR, ITAR, and regulations administered by the U.S. Department of the Treasury's Office of Foreign Assets Control.

International operations are conducted principally through non-Debtor foreign subsidiaries and joint ventures and are subject to the telecommunications and satellite regulatory regimes of the jurisdictions in which those entities operate:

• Brazil: local subsidiaries hold authorizations to provide satellite broadband and managed network services and are subject to Brazilian telecommunications regulations.
• India: subsidiary Hughes Communications India Private Limited holds licenses from the Indian Department of Telecommunications to provide VSAT-based satellite communications services.
• Europe: the Company provides managed network solutions and satellite services to enterprise and government customers, subject to applicable European Union, UK, and member state telecommunications directives and licensing requirements.

More broadly, the Company must obtain satellite landing rights and market access authorizations in each foreign jurisdiction where it provides satellite services, with those authorizations dependent on the national regulations established by the applicable foreign government or international body.

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Prepetition Obligations

As of the Petition Date, the Debtors reported approximately $1.5 billion in total funded debt obligations, consisting of two series of senior notes issued by HSSC — one secured, governed by an indenture administered by Wilmington Savings Fund Society, FSB (“WSFS”) as successor trustee, and one unsecured, governed by an indenture administered by U.S. Bank Trust Company, National Association, as trustee. The Company’s prepetition capital structure is summarized below:

5.250% Senior Secured Notes due Aug. 1, 2026

• HSSC issued approximately $750 million in aggregate principal amount of Senior Secured Notes pursuant to an indenture dated July 27, 2016, as supplemented. The full principal amount remains outstanding as of the Petition Date, together with approximately $19.6 million in accrued and unpaid interest.
  • The notes may be secured by substantially all of the assets of HSSC and the Guarantors, and are jointly and severally guaranteed by each Guarantor.
  • U.S. Bank Trust Company, National Association previously served as indenture trustee and collateral agent for the Senior Secured Notes and was succeeded in those roles by WSFS on July 31, 2026.
  • During the year ended Dec. 31, 2025, EchoStar purchased approximately $123 million of the Senior Secured Notes in open market trades and continues to hold the repurchased notes.

6.625% Senior Unsecured Notes due Aug. 1, 2026

• HSSC also issued approximately $750 million in aggregate principal amount of Senior Unsecured Notes under an indenture dated July 27, 2016, as supplemented. The full principal amount remains outstanding as of the Petition Date, together with approximately $24.7 million in accrued and unpaid interest.
  • The notes are jointly and severally guaranteed by each of the Guarantors.
  • Because Aug. 1, 2026 fell on a Saturday — a “Legal Holiday” under the Senior Notes indentures — payment on both series was not required until the next succeeding non-Legal Holiday, Monday, Aug. 3, 2026, with no additional interest accruing over the intervening period.

2026 Intercompany Loans

• HSSC leases the full capacity of the JUPITER 3 satellite from non-Debtor EchoStar XXIV L.L.C., an EchoStar subsidiary, under an operating lease (the “J3 Satellite Lease”) with an initial seven-year term and a monthly lease charge of approximately $15.9 million.
• In February 2026, HSSC and EchoStar entered into two intercompany financing agreements to fund historical rent payments owed but not timely paid by the Debtors under the J3 Satellite Lease. The full principal amount of both loans remains outstanding as of the Petition Date.
  • A secured financing agreement with an initial principal amount of $50 million.
  • An unsecured financing agreement with an initial principal amount of $1 million, plus accrued and unpaid interest outstanding under the secured agreement.
  • Interest accrues on both agreements at 13.75% per year, payable in arrears at maturity or upon any voluntary prepayment. Both mature on the earlier of receipt of a demand letter requesting payment in full or Aug. 1, 2026 (subject to the same Legal Holiday convention described above).

Other Intercompany Obligations

• The Debtors routinely transact both among themselves and with non-Debtor affiliates in the ordinary course, as described more fully in the First Day Motions. Intercompany obligations are generally reconciled and recorded on a cashless basis.
• Among the Debtors, Hughes Network Systems, LLC (“HNS”) serves as the primary operating subsidiary, generating substantially all of the Debtors’ revenue and centrally managing cash receipts, vendor disbursements, payroll, and benefits for the remaining Debtor entities.
  • HNS funds the other Debtors’ operating accounts from its main concentration account on an as-needed basis, creating intercompany receivables and payables on each entity’s general ledger.
  • Inter-Debtor activity also includes periodic lease payments of approximately $6 million per month from HNS to Debtor EchoStar Orbital L.L.C. in connection with the JUPITER 2 satellite, which EchoStar Orbital owns.
• Prepetition transactions with non-Debtor affiliates include the J3 Satellite Lease as well as agreements under which the Debtors provide warranty, operations, maintenance, and hosting services for satellite and ground-based communications equipment owned by EchoStar and its other subsidiaries.
  • EchoStar administers certain insurance policies, surety bonds, letters of credit, and tax obligations on the Debtors’ behalf, charging the Debtors’ allocable share through intercompany payables.
  • Several foreign non-Debtor affiliates support the business by securing new contracts and servicing customers locally, and the Debtors have historically provided ordinary course intercompany funding to those affiliates as required.

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Events Leading to Bankruptcy

Overview

• The Chapter 11 Cases result, among other factors, from two converging pressures: the consumer broadband market’s structural transition from geostationary (“GEO”) to low-earth-orbit (“LEO”) satellite infrastructure, and the maturity of approximately $1.5 billion of Senior Notes that the Debtors lack the cash to repay.
  • While the Company’s substantial GEO and LEO investments have strengthened its position in the enterprise and government markets, they did not insulate the consumer business from an accelerating competitive shift that has eroded subscriber volumes and forced a fundamental reorientation of strategic focus.
  • The Company is now pivoting toward its enterprise and government segments—businesses that are growing and represent its strategic future—while continuing to service its existing direct-to-consumer base. The Debtors intend to use these cases to right-size their capital structure and effectuate that transition without interruption to the critical services and technology they provide to customers.

Competitive Disruption from LEO Satellite Operators

• Demand in the consumer satellite broadband market was historically driven by necessity rather than preference. Rural households and remote businesses across the United States and Latin America—areas beyond the practical reach of cable, fiber, or DSL infrastructure—relied on satellite broadband as their only viable connectivity option, and the Company built its consumer business in these underserved markets.
  • Geostationary satellites, orbiting approximately 22,300 miles above the Earth, deliver the broad geographic coverage needed to reach those populations, but the physics of that altitude impose round-trip signal latency of roughly 600 milliseconds—a tradeoff customers historically accepted in exchange for connectivity they could not otherwise obtain.
• That calculus changed as competitors successfully deployed LEO constellations, including SpaceX, Amazon Leo, and other operators.
  • Operating at altitudes between approximately 340 and 1,200 kilometers—a fraction of GEO altitude—LEO satellites deliver latency typically in the 20 to 40 millisecond range, approaching terrestrial broadband performance, with data speeds competitive with cable and DSL.
  • As LEO constellations expanded and consumer costs declined, competitors entered the Company’s historical markets with a product that outperforms GEO broadband on the metrics consumers value most: speed and latency. These operators have achieved significant scale and coverage across North America and Latin America, competing directly with the Company’s HughesNet service.
• The impact on subscriber volumes has been material. As of the Petition Date, the Company had approximately 641,000 broadband subscribers, a decline of approximately 21.7% from approximately 819,000 subscribers as of June 30, 2025.
  • The Company does not expect the trend to reverse, viewing LEO competition as structural rather than cyclical as competitors continue to expand coverage and reduce costs.

Financial Deterioration

• The shrinking consumer subscriber base has weighed on financial results, compounded by a fixed cost structure—satellite lease obligations, ground infrastructure operating costs, and network operations expenses—that does not decline proportionately with consumer volumes.
  • For the fiscal year ended December 31, 2025, the Company reported a net loss of approximately $1.274 billion, driven largely by revenue declines in the consumer broadband business and a significant non-cash impairment charge.

Strategic Repositioning and Workforce Reductions

• Management and its professionals are developing a multi-year business plan intended to shift the revenue mix from a consumer-dominated business to an enterprise and government-led platform, with those customers—already a growing share of 2025 revenue—expected to become the predominant source of consolidated revenue.
  • The transition is supported by an approximately $1.5 billion contracted enterprise backlog, recent contract awards from commercial airlines and U.S. defense agencies, and the Company’s expanding role as a multi-orbit ground infrastructure and managed services provider for LEO satellite operators.
  • The consumer broadband business, though materially declining, remains cash-generative and is expected to fund continued investment in these higher-growth opportunities during and beyond these cases.
• The Company has also moved to reduce the size and shape of its personnel base across all levels, including parts of senior leadership.
  • Between July 24 and July 28, 2026, the Debtors notified approximately 400 employees of their termination. Contemplated termination dates vary, but the majority fall between Sept. 22 and Sept. 28, 2026—60 days after notice—reflecting the Debtors’ judgment that a 60-day transition period is important both to those employees and to preserving and maximizing business value, and would comply with the requirements of the federal and state Worker Adjustment and Retraining Notification (“WARN”) Acts to the extent applicable to those employees. The Debtors anticipate continuing to pay salary and benefits through the 60-day transition period.

Senior Notes Maturity and Failed Refinancing

• The Debtors carry approximately $1.5 billion in aggregate principal amount of funded debt—roughly $750 million in senior secured notes and roughly $750 million in senior unsecured notes—that matured on August 1, 2026, with payment due August 3, 2026 under the governing indentures.
  • Because August 1, 2026 fell on a Saturday—a “Legal Holiday” under the indentures—payment was not required until the next succeeding non-Legal Holiday, Monday, August 3, 2026, with no additional interest accruing for the intervening period.
• As of the Petition Date, the Debtors lacked the cash to repay the Senior Notes at maturity, had no committed financing to fund the obligations, and had been unable to access the capital markets on terms permitting a refinancing.
  • The indentures further constrain the Debtors’ ability to incur additional indebtedness, make certain investments, and take other steps that might otherwise have supported a refinancing transaction.

Negotiations with the Ad Hoc Group

• Ahead of the Petition Date, the Debtors and their advisors engaged with an ad hoc group of Senior Noteholders—represented to hold approximately 80% of the outstanding aggregate principal amount of the Senior Notes—and its advisors regarding a potential standstill to create time to negotiate a restructuring of the funded indebtedness, including exchanging term sheets reflecting proposed forbearance terms intended to avoid a filing.
  • Those discussions did not produce agreement on a standstill, refinancing, or consensual restructuring prior to maturity.
• On July 21, 2026, the Debtors received a letter from counsel to the Ad Hoc Group raising allegations concerning certain prepetition transactions between the Debtors and EchoStar and its non-Debtor subsidiaries, specifically:
  • The terms of the J3 Satellite Lease with EchoStar XXIV, which the Ad Hoc Group contends requires above-market payments by the Debtors;
  • Cash dividends totaling approximately $1.029 billion paid by the Debtors to EchoStar in February and March 2024;
  • Income tax reimbursements of approximately $196 million made by the Debtors to EchoStar in 2024; and
  • The referral of the Company’s consumer subscribers to SpaceX in connection with EchoStar’s sale of certain spectrum assets to SpaceX.
• The letter asserted that these transactions may give rise to claims—including for fraudulent transfer and breach of fiduciary duty—against EchoStar, certain of its subsidiaries, and the individuals then serving as the Debtors’ directors and officers, certain of whom also held EchoStar roles, including Mr. Charles Ergen.
  • The Debtors do not concede the merit of any of the allegations and reserve all rights against all parties. The Special Committee, comprised of independent directors, has been established to conduct a full investigation of the matters raised, and the Debtors are not seeking First Day relief that would prejudice any party’s rights with respect to these issues, which will be addressed as necessary at the appropriate time.
• On July 28, 2026, counsel to the Ad Hoc Group wrote to the Clerk of the Court objecting to any request for an expedited hearing process in the anticipated cases, including with respect to the use of cash collateral securing the Senior Secured Notes, and stating that it had requested—but not received—drafts of first-day pleadings and advance notice of intended relief.
  • At the time that letter was sent, the Debtors had not filed these cases, had not sought relief from any bankruptcy court, and had not determined whether or when to commence cases or what first-day relief they would request; they remained engaged in discussions with the Ad Hoc Group regarding a possible standstill or consensual restructuring.
  • Notwithstanding what the Debtors characterize as the Ad Hoc Group’s highly aggressive approach, the Debtors and their advisors remain committed to engaging with the Ad Hoc Group, its advisors, and all stakeholders toward a consensual resolution that right-sizes the capital structure, preserves going-concern value, and positions the Company for long-term success.
• The Debtors emphasize that their estates are separate and distinct from EchoStar and its non-Debtor affiliates, including the debtors in the DISH Chapter 11 Cases. Debtor assets, including cash generated from operations, will be used solely for the benefit of the Debtors’ estates and creditors and will not subsidize or fund the operations, obligations, or liabilities of EchoStar, the DISH debtors, or any other non-Debtor affiliate absent further order of the Court.

Governance Enhancements

• On July 28, 2026, Anthony Horton and Michael Buenzow were appointed to HSSC’s Board of Directors as independent directors.
  • Mr. Horton brings extensive financial and business leadership experience across public and private companies and currently serves as Chief Executive Officer of AR Horton Advisors, Lead Independent Director of Team, Inc., and Independent Director of Talen Energy Corporation.
  • Mr. Buenzow brings over 25 years advising C-suite leaders across diverse industries, including 23 years at FTI Consulting, Inc., where he served as Senior Managing Director and Vice Chairman of Restructuring through 2025; he is currently the founder of Turn 180 LLC.
  • Following the appointments, the Board consists of Mr. Horton, Mr. Buenzow, and Mr. Ergen, HSSC’s Principal Executive Officer and EchoStar’s Co-Founder, Chairman, President, and Chief Executive Officer.
• That same day, the Board unanimously approved formation of a Special Committee comprised of the Independent Directors, having concluded that neither director holds—or has held—material business relationships, close personal relationships, or other affiliations with the Company or its related parties that would impair independent judgment or the discharge of their duties under HSSC’s bylaws and applicable law.
  • The Special Committee was delegated authority to review and evaluate the Debtors’ capital structure, assets, liabilities, operations, liquidity, and financial condition, and to consider, negotiate, approve, and implement financing, restructuring, sale, or other strategic transactions where the Board or the Committee reasonably determines an actual or potential conflict exists between the Debtors and EchoStar or its non-Debtor subsidiaries.
  • The Committee also holds sole power to conduct an independent investigation into the merits and potential value of claims and causes of action held by the Debtors against EchoStar or its non-Debtor subsidiaries, and to prosecute, settle, release, or otherwise act upon them, together with authority to take related actions and retain independent advisors. The Special Committee retained Kirkland & Ellis to advise it in discharging these duties.
• Also on July 28, 2026, the Board appointed Robert Del Genio as HSSC’s Chief Restructuring Officer. Mr. Del Genio is a Senior Managing Director at FTI Consulting, Inc. (“FTI”) and co-leader of the Corporate Finance and Restructuring segment of FTI’s New York Metro Region, with more than 40 years of restructuring and M&A experience and prior chief restructuring officer, strategic planning officer, or interim chief executive roles at companies including Posigen, Ascend Performance Materials, Voyager Aviation Holdings, CHC Group, The Weinstein Company Holdings, PHI, and Western Global Airlines.
  • As CRO, Mr. Del Genio oversees the Debtors’ operational and financial management in connection with preparation for the Chapter 11 Cases, strategic initiatives and restructuring activities, cash management and liquidity forecasting, and vendor management and stakeholder communications. He is the declarant supporting the Chapter 11 petitions and First Day Motions.
  • FTI was engaged on July 7, 2026 to assist White & Case LLP in advising the Debtors and to provide restructuring advisory services, and is the Debtors’ proposed financial advisor. White & Case serves as the Debtors’ counsel, and Epiq Corporate Restructuring, LLC is the proposed claims, noticing, and solicitation agent.
• On July 31, 2026, HSSC appointed Ramesh Ramaswamy as Executive Vice President, General Manager. Mr. Ramaswamy joined HSSC in 1985 as a software engineer and advanced through management roles in engineering, operations, marketing, and sales.
• On August 2, 2026, the Board—including the Independent Directors—unanimously authorized the commencement of these Chapter 11 Cases to preserve business value and effectuate the Company’s strategic transition.

Cash Collateral & Path Forward

• The Senior Secured Notes may be secured by a first-priority lien on substantially all assets of HSSC and each Guarantor pursuant to a Security Agreement dated June 8, 2011, and are guaranteed on a joint and several basis by the Guarantors, with WSFS acting as indenture trustee and collateral agent for the Secured Noteholders.
  • The Collateral may include substantially all of the Debtors’ real and personal property, accounts receivable, subscriber receivables, equipment, inventory, intellectual property, orbital slot licenses and regulatory authorizations, investment property, deposit accounts, and proceeds. Cash generated from operations may constitute “cash collateral” under section 363(a) of the Bankruptcy Code, in which the Secured Noteholders may assert a security interest.
• The Debtors require immediate access to cash collateral to fund ongoing operations. As of the Petition Date, they held approximately $61.2 million in cash and cash equivalents on a bank basis, with operations continuing to generate operating cash flow from a combination of durable consumer broadband cash flows from JUPITER satellite operations and growing enterprise and government revenue.
  • The Debtors do not currently project a need for debtor-in-possession financing but reserve the right to seek authorization for a DIP facility if available cash and cash collateral prove insufficient to support operations and the costs of administering these cases.
  • Proposed uses of cash include ordinary course operating expenses (workforce compensation and benefits, rent and ground infrastructure costs, satellite lease payments, utilities, and critical vendor payments); capital expenditures necessary to maintain satellite infrastructure and network operations; professional fees and administrative expenses; and payments authorized under the First Day Motions—all in accordance with a budget against which the Debtors will report regularly.
• In exchange, the Debtors propose adequate protection for the Secured Noteholders consisting of replacement and continuation of existing prepetition liens on postpetition estate property to the extent such liens were valid, properly perfected, and enforceable, in each case to the extent of any diminution in Collateral value; superpriority administrative expense claims under section 507(b), junior only to any Court-approved professional fee carve-out, to the extent of any diminution in value; and compliance with the budget and any agreed or Court-ordered variance testing.
  • The Debtors submit that this protection is fair and reasonable, noting that the satellite fleet continues to operate at high utilization levels and that ongoing consumer, enterprise, and government cash flows demonstrate the Collateral’s value is being preserved through continued operations, with substantial going-concern value maintained and enhanced.
  • Interim and final access to cash collateral is critical to funding operations, paying employees, maintaining satellite service for subscribers, satisfying enterprise and government contract obligations, and administering these cases without disruption. Absent interim authority, the Debtors state they would have no alternative to immediate liquidation—a value-destructive outcome causing immediate and irreparable harm to the estates, creditors, and stakeholders, and eliminating any prospect of a successful reorganization.