FNY Partners Fund LP, et al. v. BC Partners LLP, et al. No. 3:20-03741 (N.D. Cal.) (Intelsat S. A.)
On June 5, 2020, E&C filed a class action complaint on behalf of three of its institutional clients and other similarly situated investors against BC Partners LLP (“BC Partners), Silver Lake Group, L.L.C. (“Silver Lake”), Raymond Svider and Justin Batemn in the Northern District of California. The action was brought pursuant to Sections 10(b), 20A and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) on behalf of investors that purchased Intelsat S.A. (“Intelsat”) (NYSE: I; OTC: INTEQ) common stock during the period November 5, 2019 through November 18, 2019, inclusive, and were damaged thereby.
The complaint alleges that BC Partners and Silver Lake violated provisions of the Exchange Act by selling a block of Intelsat shares while in possession of material non-public information, including that Intelsat had met with the Federal Communications Commission (“FCC”) on November 5, 2019 to discuss the private sale of certain wavebands controlled by Intelsat for future “5G” use (the “C-Band”), and that the FCC viewed negatively Intelsat’s then-existing proposal, instead favoring a public auction. Through the use of this material non-public information, BC Partners and Silver Lake collectively gained over $185 million in profits and avoided losses by selling shares of Intelsat to unsuspecting and unwitting public shareholders.
On November 18, 2019, the FCC announced it would publicly auction the C-Band spectrum that Intelsat had proposed to sell privately. In response to this disclosure, Intelsat’s share price declined 40%, or $5.38 per share, to close at $8.03 per share. If you wish to view the complaint filed by E&C, please click here.
On May 13, 2020, Intelsat filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. E&C has filed an appearance of behalf of its clients in the Eastern District of Virginia Bankruptcy Court and is closely monitoring developments in that proceeding. E&C has also submitted a Freedom of Information Act (FOIA) request and is in the process of obtaining documents further supporting the claims asserted in the action.