-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KU/1OpguJHEp576PDDUK8ZhjveR57PKkZpZllqygmE4AKIiTYURWK8bVcUl1k/Ee YF2MoRUxlOlVP70xmklS7w== 0000950134-05-018539.txt : 20050929 0000950134-05-018539.hdr.sgml : 20050929 20050929122746 ACCESSION NUMBER: 0000950134-05-018539 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20050929 DATE AS OF CHANGE: 20050929 GROUP MEMBERS: HIGHLAND CAPITAL MANAGEMENT SERVICES INC GROUP MEMBERS: HIGHLAND CRUSADER OFFSHORE PARTNERS LP GROUP MEMBERS: HIGHLAND EQUITY FOCUS FUND LP GROUP MEMBERS: HIGHLAND LEGACY LIMITED GROUP MEMBERS: HIGHLAND SELECT EQUITY FUND LP GROUP MEMBERS: JAMES DONDERO GROUP MEMBERS: PAMCO CAYMAN LIMITED GROUP MEMBERS: PROSPECT STREET HIGH INCOME PORTFOLIO INC GROUP MEMBERS: PROSPECT STREET INCOME SHARES INC GROUP MEMBERS: STRAND ADVISORS INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MOTIENT CORP CENTRAL INDEX KEY: 0000913665 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 930976127 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42503 FILM NUMBER: 051110393 BUSINESS ADDRESS: STREET 1: 300 KNIGHTSBRIDGE, PKY. CITY: LINCOLNSHIRE STATE: IL ZIP: 60069 BUSINESS PHONE: 8474784200 MAIL ADDRESS: STREET 1: 300 KNIGHTSBRIDGE, PKY. CITY: LINCOLNSHIRE STATE: IL ZIP: 60069 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN MOBILE SATELLITE CORP DATE OF NAME CHANGE: 19931019 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HIGHLAND CAPITAL MANAGEMENT LP CENTRAL INDEX KEY: 0001167365 IRS NUMBER: 752716725 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 13455 NOEL ROAD STE 1300 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9726284100 MAIL ADDRESS: STREET 1: 13455 NOEL ROAD STE 1300 CITY: DALLAS STATE: TX ZIP: 75240 SC 13D/A 1 d29060sc13dza.htm AMENDMENT TO SCHEDULE 13D sc13dza
 

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 6)*

Motient Corporation
(Name of Issuer)

Common Stock, par value $0.01 per share
(Title of Class of Securities)

619908304
(CUSIP Number)

Patrick H. Daugherty, Esq.
Highland Capital Management, L.P.
Two Galleria Tower
13455 Noel Road, Suite 1300
Dallas, Texas 75240
(972) 628-4100
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

September 29, 2005
(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

 

             
CUSIP No. 619908304 Page 2 of 16
  1. Name of Reporting Person:
Prospect Street High Income Portfolio, Inc.		 I.R.S. Identification Nos. of above persons (entities only):
04-3028343
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Maryland
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
1,155,224
8. Shared Voting Power:
0
9. Sole Dispositive Power:
1,155,224
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
1,155,224
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
1.7%
  14.Type of Reporting Person (See Instructions):
CO/IV

 

             
CUSIP No. 619908304 Page 3 of 16
  1. Name of Reporting Person:
Prospect Street Income Shares Inc.		 I.R.S. Identification Nos. of above persons (entities only):
36-2765811
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Maryland
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
111,940
8. Shared Voting Power:
0
9. Sole Dispositive Power:
111,940
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
111,940
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
0.2%
  14.Type of Reporting Person (See Instructions):
CO/IV

 

             
CUSIP No. 619908304 Page 4 of 16
  1. Name of Reporting Person:
Highland Legacy Limited		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Cayman Islands
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
223,880
8. Shared Voting Power:
0
9. Sole Dispositive Power:
223,880
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
223,880
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
0.3%
  14.Type of Reporting Person (See Instructions):
OO

 

             
CUSIP No. 619908304 Page 5 of 16
  1. Name of Reporting Person:
Highland Crusader Offshore Partners, L.P.		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Bermuda
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
5,352,497
8. Shared Voting Power:
0
9. Sole Dispositive Power:
5,352,497
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
5,352,497
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
8.1%
  14.Type of Reporting Person (See Instructions):
PN

 

             
CUSIP No. 619908304 Page 6 of 16
  1. Name of Reporting Person:
PAMCO Cayman, Limited		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Cayman Islands
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
223,880
8. Shared Voting Power:
0
9. Sole Dispositive Power:
223,880
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
223,880
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
0.3%
  14.Type of Reporting Person (See Instructions):
OO

 

             
CUSIP No. 619908304 Page 7 of 16
  1. Name of Reporting Person:
Highland Equity Focus Fund, L.P.		 I.R.S. Identification Nos. of above persons (entities only):
46-0491961
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Delaware
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
1,518,779
8. Shared Voting Power:
0
9. Sole Dispositive Power:
1,518,779
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
1,518,779
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
2.3%
  14.Type of Reporting Person (See Instructions):
PN

 

             
CUSIP No. 619908304 Page 8 of 16
  1. Name of Reporting Person:
Highland Select Equity Fund, L.P.		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Delaware
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
119,283
8. Shared Voting Power:
0
9. Sole Dispositive Power:
119,283
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
119,283
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
0.2%
  14.Type of Reporting Person (See Instructions):
PN

 

             
CUSIP No. 619908304 Page 9 of 16
  1. Name of Reporting Person:
Highland Capital Management Services, Inc.		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Delaware
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
182,748
8. Shared Voting Power:
0
9. Sole Dispositive Power:
182,748
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
182,748
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
0.3%
  14.Type of Reporting Person (See Instructions):
CO

 

             
CUSIP No. 619908304 Page 10 of 16
  1. Name of Reporting Person:
Highland Capital Management, L.P.		 I.R.S. Identification Nos. of above persons (entities only):
75-2716725
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF/WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Delaware
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
8,822,764
8. Shared Voting Power:
0
9. Sole Dispositive Power:
8,822,764
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
8,822,764
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
13.3%
  14.Type of Reporting Person (See Instructions):
IA/PN

 

             
CUSIP No. 619908304 Page 11 of 16
  1. Name of Reporting Person:
Strand Advisors, Inc.		 I.R.S. Identification Nos. of above persons (entities only):
95-4440863
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Delaware
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
8,822,764
8. Shared Voting Power:
0
9. Sole Dispositive Power:
8,822,764
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
8,822,764
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
13.3%
  14.Type of Reporting Person (See Instructions):
CO

 

             
CUSIP No. 619908304 Page 12 of 16
  1. Name of Reporting Person:
James Dondero		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF/PF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
United States
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
9,024,326
8. Shared Voting Power:
0
9. Sole Dispositive Power:
9,024,326
10.Shared Dispositive Power:
0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
9,024,326
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
13.6%
  14.Type of Reporting Person (See Instructions):
IN

 

Page 13 of 16
     This Amendment No. 6 to Schedule 13D amends and supplements the Schedule 13D filed with the Securities and Exchange Commission (the “Commission”) on June 10, 2002, as amended by Amendment No. 1 to Schedule 13D filed with the Commission on October 20, 2003, Amendment No. 2 to Schedule 13D filed with the Commission on July 12, 2004, Amendment No. 3 to Schedule 13D filed with the Commission on November 16, 2004, Amendment No. 4 to Schedule 13D filed with the Commission on April 15, 2005 and Amendment No. 5 to Schedule 13D filed with the Commission on September 7, 2005 (as amended, the “Schedule 13D”). Capitalized terms used herein which are not defined herein have the meanings given to such terms in the Schedule 13D. Except as otherwise provided herein, all Items of the Schedule 13D remain unchanged.
Item 4. Purpose of the Transaction.
     Item 4 is hereby supplemented as follows:
     On September 29, 2005, Highland Capital Management, L.P. sent a letter to the Chief Operating Officer of Motient Corporation (the “Company”) expressing its concern regarding certain matters set forth in that certain Current Report on Form 8-K filed by the Company on September 22, 2005. A copy of this letter is attached hereto as Exhibit 6.
Item 7. Material to be Filed as Exhibits.
     Item 7 is hereby amended and supplemented as follows:
     
     Exhibit 6
  Letter of Highland Capital Management, L.P. to the Chief Operating Officer of Motient Corporation, dated September 29, 2005.

 

 

Page 14 of 16
SIGNATURE
     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: September 29, 2005
             
    HIGHLAND CAPITAL MANAGEMENT, L.P.
 
            
    By:   Strand Advisors, Inc., its general partner
 
            
 
      By:   /s/ James Dondero
 
           
 
      Name:   James Dondero
 
      Title:   President
 
    STRAND ADVISORS, INC.
 
    By:   /s/ James Dondero
 
           
 
  Name:   James Dondero
 
  Title:   President    
 
            
    /s/ James Dondero
     
    James Dondero
 
            
    PROSPECT STREET HIGH INCOME PORTFOLIO, INC.
 
            
    By:   /s/ James Dondero
         
    Name:   James Dondero
    Title:   President
 
            
    PROSPECT STREET INCOME SHARES INC.
 
            
    By:   /s/ James Dondero
         
    Name:   James Dondero
    Title:   President
 
            
    HIGHLAND LEGACY LIMITED
 
            
    By:   Highland Capital Management, L.P., its collateral manager
    By:   Strand Advisors, Inc., its general partner
 
            
 
      By:   /s/ James Dondero
 
           
 
      Name:   James Dondero
 
      Title:   President
 
            
    HIGHLAND CRUSADER OFFSHORE PARTNERS, L.P.
 
            
    By:   Highland Capital Management, L.P., its general partner
    By:   Strand Advisors, Inc., its general partner
 
            
 
      By:   /s/ James Dondero
 
           
 
      Name:   James Dondero
 
      Title:   President

 

 

Page 15 of 16
             
    PAMCO CAYMAN, LIMITED
 
            
    By:   Highland Capital Management, L.P., its collateral manager
    By:   Strand Advisors, Inc., its general partner
 
            
 
      By:   /s/ James Dondero
 
           
 
      Name:   James Dondero
 
      Title:   President
 
            
    HIGHLAND EQUITY FOCUS FUND, L.P.
 
            
    By:   Highland Capital Management, L.P., its general partner
    By:   Strand Advisors, Inc., its general partner
 
            
 
      By:   /s/ James Dondero
 
           
 
      Name:   James Dondero
 
      Title:   President
 
            
    HIGHLAND SELECT EQUITY FUND, L.P.
 
            
    By:   Highland Capital Management, L.P., its general partner
    By:   Strand Advisors, Inc., its general partner
 
            
 
      By:   /s/ James Dondero
 
           
 
      Name:   James Dondero
 
      Title:   President
 
            
    HIGHLAND CAPITAL MANAGEMENT SERVICES, INC.
 
            
    By:   /s/ James Dondero
         
    Name:   James Dondero
    Title:   President

 

Page 16 of 16
APPENDIX I
     The name of each director and officer of HCM Services, Strand, Prospect Portfolio and Prospect Shares is set forth below. Unless otherwise indicated, the business address of each person listed below is Two Galleria Tower, 13455 Noel Road, Suite 1300, Dallas, Texas 75240. Each person identified below is a citizen of the United States of America. The present principal occupation or employment of each of the listed persons is set forth below. During the past five years, none of the individuals listed below has been convicted in a criminal proceeding or been a party to a civil proceeding, in either case of the type specified in Items 2(d) or (e) of Schedule 13D.
     
    Present Principal Occupation or Employment
Name   and Business Address (if applicable)
Highland Capital Management Services, Inc.
    
 
    
 
    
James D. Dondero, Director
  President
 
    
Mark K. Okada, Director
  Executive Vice President
 
    
Patrick H. Daugherty
  Secretary
 
    
Todd A. Travers
  Assistant Secretary
 
    
J. Kevin Ciavarra
  Assistant Secretary
 
    
David Lancelot
  Treasurer
 
    
Chad Schramek
  Assistant Treasurer
 
    
Strand Advisors, Inc.
    
 
    
James D. Dondero, Director
  President
 
    
Mark K. Okada
  Executive Vice President
 
    
Patrick H. Daugherty
  Secretary
 
    
J. Kevin Ciavarra
  Assistant Secretary
 
    
Todd A. Travers
  Assistant Secretary
 
    
Appu Mundassery
  Assistant Secretary
 
    
David Lancelot
  Treasurer
 
    
Chad Schramek
  Assistant Treasurer
 
    
Prospect Street High Income Portfolio, Inc. and Prospect Street Income Shares Inc.
 
James D. Dondero
  President
 
    
Mark K. Okada
  Executive Vice President
 
    
R. Joseph Dougherty, Director
  Senior Vice President
 
    
M. Jason Blackburn
  Secretary and Treasurer
 
    
Michael S. Minces
  Chief Compliance Officer
 
    
Timothy K. Hui, Director
  Associate Provost for Graduate Education of the Pennsylvania Biblical University, 48 Willow Green Drive, Churchville, Pennsylvania 18966
 
    
Scott F. Kavanaugh, Director
  Private investments
 
    
James F. Leary, Director
  Managing Director of Benefit Capital Southwest, Inc., 2006 Peakwood Drive, Garland, Texas 75044
 
    
Bryan A. Ward, Director
  Senior Manager of Accenture, LLP, 3625 Rosedale, Dallas, Texas 75205

  EX-99.6 2 d29060exv99w6.htm LETTER exv99w6

 

Exhibit 6
HIGHLAND CAPITAL MANAGEMENT, L.P.
1300 Two Galleria Tower
13455 Noel Road, LB 45
Dallas, Texas 75240
September 29, 2005
Christopher Downie
Chief Operating Officer
Motient Corporation
300 Knightsbridge Pkwy.
Lincolnshire, Illinois 60069
Mr. Downie:
As you are aware, Highland Capital Management, L.P. and certain of its affiliates (collectively, “Highland”) beneficially own approximately 14% of the outstanding Common Stock of Motient Corporation (“Motient”). We have reviewed Motient’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 22, 2005, which included as an exhibit a press release announcing that Motient had executed a non-binding letter of intent in connection with a proposed transaction “to consolidate the ownership of Mobile Satellite Ventures LP (“MSV”) and TerreStar Networks Inc. (“TerreStar”) within Motient.” The stated purpose of this transaction is to “simplify the ownership and governance of each of MSV and TerreStar, better enabling each of them to pursue more effectively their deployment of separate hybrid satellite and terrestrial based communications networks . . .”
As a large stockholder and plaintiff in pending proceedings against members of Motient’s current Board of Directors and advisors, we are deeply concerned about this proposal, which we believe effectively results in Motient selling a majority interest in itself to MSV. We suspect this transaction only furthers current management’s scheme to undercut the value of Motient to its current stockholders and to line the pockets of certain insiders and fiduciaries through transactions that are not arm’s length and that involve conflicts of interest, self-dealing and breaches of fiduciary duties.
We also are concerned that the current management announced the transaction without the requisite consideration and deliberation by Motient’s full Board of Directors. The press release does not indicate that this transaction was approved by the full Board of Directors in a meeting where the Board was fully informed about the transaction and its effect on stockholders. We can only ask: Why? We believe it would be inappropriate to announce such a transaction without a Board meeting where the Board is fully briefed on the transaction, its effects and its real purpose. Moreover, the Form 8-K and press release are silent on what steps, if any, existing management

 

 

has taken to ensure that the suspected conflicts of interest, self-dealing and breaches of fiduciary duty have not influenced this proposed transaction.
In any event, using the sketchy terms outlined in the Form 8-K and press release, it is evident that the proposed transaction is a bad deal for Motient and its stockholders. The proposed deal impliedly values the combined L-Band at approximately $2.7 billion (or approximately $0.40 MHz POP, according to industry publications) and the combined S-Band at approximately $0.5 billion (or approximately $0.22 MHz POP, according to industry publications). We believe, however, that based upon our review of market comparables and industry data the valuation above significantly overvalues the L-Band and significantly undervalues the S-Band. Given that Motient currently owns approximately 61% of the S-Band and approximately 49% of the L-Band, we believe that the inaccurate valuation described above will result in dramatically skewed exchange ratios among the parties in the proposed transaction. Specifically, we believe that the excess Motient shares provided to MSV stockholders in the proposed transaction will materially and irreparably dilute existing Motient stockholders and, at the same time, transfer hundreds of millions of dollars in value and potential appreciation to MSV stockholders. Moreover, the proposed issuance of approximately 93 million shares of Motient Common Stock represents a greater number of shares than are currently outstanding (approximately 71 million shares), and thus effectively results in a sale of a majority interest of the company at a disadvantageous price to Motient’s existing stockholders.
Be advised that Highland has retained a valuation firm that recently testified before Congress regarding the value of spectrum. Their preliminary analysis indicates that the L-Band is a less valuable spectrum than the S-Band because of potential interference and other technical considerations. Thus, if the S-Band and L-Band were properly valued and the exchange ratios were set accordingly, following the transaction, we believe that current Motient stockholders, not MSV stockholders, would obtain control of the combined companies because of their current large ownership position in the S-Band. Instead, current Motient stockholders would own approximately 43% or less of the combined entities. We believe that such a transaction could not be in the best interests of existing Motient stockholders.
In addition, the 8-K raises the following questions:
–   Why is Motient willing to give up majority control of the S-Band, which is its most valuable and liquid asset, at a low valuation in a transaction in which it will become a minority stockholder in a new company that it will not control? This is even stranger given that the Form 8-K and press release state that the new company intends to then spin-off the S-Band assets to Motient stockholders. The net of the proposal will be that before the proposed transaction, Motient stockholders would own approximately 61% of the S-Band; after the deal, they will own approximately 43% or less of the S-Band, which interest would then be spun off to Motient stockholders.
 
–   Why is Motient willing to pay a premium to MSV for the L-Band when MSV has no audited financials and no access to the public markets other than through Motient? Does the fact that Jared Abbruzzese and Gerald Kittner are directors of MSV’s general partner play any role in this decision? Is this another conflict of interest? Both Abbruzzese and

 

 

    Kittner are defendants in Highland’s lawsuit filed on behalf of Motient that accuses them of prior conflicts of interest, self-dealing and breaches of fiduciary duty. Is this more of the same?
–   Why doesn’t Motient explore a transaction that truly does simplify the ownership structure of the L-Band and S-Band (its supposed purpose), such as selling the L-Band to MSV at the value implied by the proposed deal and buying the minority S-Band interests at the implied value?
Motient’s Board of Directors must address these issues before a definitive agreement is reached. False rumors, innuendos and attacks on Highland aside, please keep in mind that we continue to be Motient’s largest stockholder and we do not have a conflict of interest in the transaction or a separate financial interest in CTA, Tejas or MSV (unlike other management members and insiders). We also are not tainted by loyalty to the Singers. We simply seek to protect the rights of all Motient stockholders in the face of a proposed transaction that is not clearly described and that is being dictated by management and advisors with a checkered track record, as detailed in our previous suit.
We will, in the best interests of all stockholders, continue to oppose actions that we believe are improper or involve conflicts of interest, self-dealing or breaches of fiduciary duties. We ask that you change course and recognize your responsibilities to all stockholders. If you continue to act in a manner inconsistent with the best interests of Motient’s stockholders, we will continue our quest to pursue all available remedies and to thwart these improper activities at every turn.
Sincerely,
Highland Capital Management, L.P.
By: Strand Advisors, Inc., its general partner
       
   
By:   /s/ Patrick H. Daugherty    
  Patrick H. Daugherty   
  Secretary   
 
cc:     Board of Directors of Motient Corporation

 

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