Ligado Networks, a satellite service provider, filed for Chapter 11 bankruptcy in January 2025. During the proceedings, Ligado sought to enter into an agreement with AST & Science to sublease its L-band spectrum rights for a new non-geostationary orbit satellite system. Inmarsat, a competitor and co-holder of spectrum rights, objected to this transaction. After mediation, the parties signed a binding term sheet approved by the Bankruptcy Court, which required Inmarsat to affirmatively support Ligado's application to the Federal Communications Commission (FCC) once specific conditions were met. Ligado filed its FCC application in December 2025, meeting those conditions. However, Inmarsat filed a complaint in New York state court alleging a breach and later moved in federal District Court to stay the Bankruptcy Court's order requiring Inmarsat's support. The District Court granted the stay on February 27, 2026, effectively blocking Ligado from proceeding with its FCC application just days before the March 2 deadline for public comments. Ligado and AST immediately appealed to the Third Circuit, seeking an emergency stay of the District Court's order.
The Third Circuit, in a Per Curiam opinion, vacated the District Court's stay order on two principal grounds: likelihood of success on the merits and irreparable harm. First, regarding the likelihood of success, the court found the District Court committed a factual error by stating no agreement was reached regarding the Amended Inmarsat Cooperation Agreement. The record showed the parties had complied with the Bankruptcy Court's Enforcement Order by incorporating the Mediated Agreement's language into the final contracts. The court emphasized that the plain language of the Mediated Agreement was unambiguous. It required a statement that coordination exists under the agreements, but did not mandate a further coordination process before the FCC application could be filed. The court noted that 'Sympathy aside, it is axiomatic that a court may not rewrite the clear provisions of a contract to make it more reasonable or to protect a party against an unwelcome result.' The District Court's interpretation inserted an additional requirement not found in the text. Second, the court rejected the District Court's finding of irreparable harm. The court reasoned that Inmarsat could litigate the scope of the cooperation agreement in the appropriate forum if interference occurred later. The Mediated Agreement provided a detailed dispute resolution process, meaning Inmarsat was not 'gagged' from future legal action. The court concluded that Inmarsat had bargained for the obligation to support the application and that the District Court erred in concluding the stay factors were satisfied.
The vacatur of the stay order allows Ligado Networks and AST & Science to proceed with their FCC application without the immediate threat of being blocked by Inmarsat's litigation. This decision preserves the parties' ability to meet the critical March 2, 2026, deadline for public comments on the satellite application. The ruling clarifies that courts cannot rewrite unambiguous contract terms to impose additional coordination requirements not explicitly stated in the agreement. While the underlying contract dispute may still be litigated in the appropriate forum regarding future interference, the immediate regulatory pathway for the Proposed NGSO System is now open.
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