A Tale Of Two BankruptciesLaw 360

December 15, 2011

Jesse H. Austin III, Matthew L. Gibson, Eric Dodson Greenberg and Jennifer St. John Yount

Law360, New York (December 15, 2011, 1:42 PM ET) -- Over the past year, a bankruptcy proceeding in Colorado In re Tracy Broadcasting has called into question creditors ability to take a security interest in the proceeds from the future sale in bankruptcy of spectrum licenses issued to borrowers by the Federal Communications Commission.

But, in a contemporaneous proceeding aligned with the majority view In re TerreStar the influential Bankruptcy Court for the Southern District of New York upheld the right of the TerreStar creditors security interest in the proceeds from the sale of the companys FCC licenses and sharply criticized the Tracy decision.

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