Ligado Networks, a satellite service provider, filed for Chapter 11 bankruptcy and sought to sublease its spectrum rights to AST & Science to build a new satellite system. After Inmarsat objected to this transaction, the parties reached a Mediated Agreement approved by the Bankruptcy Court, which required Inmarsat to affirmatively support Ligado's application to the Federal Communications Commission for spectrum licensing. When Ligado filed the application, Inmarsat sued in New York state court alleging a breach of contract. The Bankruptcy Court ordered Inmarsat to dismiss that suit and enforce the agreement, but Inmarsat appealed to the District Court for the District of Delaware. The District Court granted Inmarsat's motion to stay the Bankruptcy Court's order, effectively halting Ligado's ability to enforce the agreement just days before the FCC's public comment deadline. Ligado and AST appealed immediately to the Third Circuit, arguing the stay would cause irreparable harm by missing the regulatory window.
The Third Circuit, in a Per Curiam opinion, vacated the District Court's stay on two principal grounds: likelihood of success on the merits and irreparable harm. First, regarding the merits, the court found the District Court made a factual error by concluding no agreement existed regarding the Amended Cooperation Agreement. The parties had complied with the Bankruptcy Court's order to incorporate the Mediated Agreement's terms. The court emphasized that the plain language of the contract was unambiguous: it required a statement that coordination existed under the agreements, not that a new coordination process be completed. The court stated, '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.' Second, the court rejected the District Court's finding of irreparable harm. The Third Circuit noted that Inmarsat could litigate the scope of the agreement in the appropriate forum if interference occurred later. The Mediated Agreement provided a dispute resolution process, and Inmarsat was not 'gagged' from making representations to the FCC as long as the conditions were met. The court concluded that the District Court erred in finding the first two stay factors were satisfied.
The District Court's stay order is vacated, allowing Ligado and AST to proceed with enforcing the Bankruptcy Court's order requiring Inmarsat to support the FCC application. This clears the path for the satellite transaction to proceed under the approved Mediated Agreement before the FCC's deadline. However, the decision leaves open the question of how interference between the systems will be handled, as Inmarsat retains the right to litigate the scope of the agreement in the appropriate forum if specific interference arises. The ruling reinforces the principle that bankruptcy courts' enforcement of mediated agreements should not be lightly stayed by district courts absent a clear contractual ambiguity.
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