April 18 (Reuters) - Bankrupt telecommunications company TerreStar Networks Inc sought court approval to hold an auction for all its assets, saying it was the best way to maximize value.
The company said Dish Network Corp’s $1.4 billion acquisition of bankrupt hybrid satellite and land-based communications company DBSD North America in March was an important data point in determining the market value of its own assets.
In court papers filed late on Friday, TerreStar said an auction will also spur creditors, who have been locked in a battle since the Chapter 11 filing, to resolve their differences and come up with a viable alternative to a sale.
TerreStar said potential bidders have to submit their bids by June 8.
The company has been looking for ways to exit bankruptcy protection after a proposed debt-for-equity restructuring deal with its largest secured creditor and digital set-top box maker EchoStar Corp ended in February. [ID:nL3E7DH1R9]
TerreStar and its 12 affiliates sought protection from creditors in October 2010 weighed down by more than $1 billion of debt.
TerreStar Networks’ parent TerreStar Corp , which was not part of the initial bankruptcy proceeding, also filed for Chapter 11 in February.
Formerly known as Motient Corp, TerreStar launched its first satellite, TerreStar-1, in July 2009, and has been building a second, TerreStar-2.
The case is In re: TerreStar Networks Inc, U.S. Bankruptcy Court, Southern District of New York, No. 10-15446. (Reporting by Santosh Nadgir; Editing by Maju Samuel)