Pegasus Units Seek Shelter

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The direct-broadcast satellite subsidiaries of Pegasus Communications Corp. filed for Chapter 11 bankruptcy protection on June 2.

The company’s move was a response to an that same day’s announcement that the National Rural Telecommunications Cooperative no longer has the exclusive rights to distribute DirecTV Inc.’s direct-broadcast satellite service in its territories. NRTC member Pegasus’ rights were terminated as part of the agreement. But Pegasus’ executives continue to assert rights to provide DirecTV service to 8.4 million homes in 41 states.

This is just the latest legal action over distribution rights among the three players. A four-year-old lawsuit concluded in April when a federal jury in California awarded DirecTV $51.5 million in damages from Pegasus regarding a lawsuit that company filed claiming that DirecTV breached a joint marketing contract. Then in May, a federal district court judge granted DirecTV’s motions to eliminate all remaining claims against it by Pegasus and Golden Sky Systems Inc.

The bankruptcy petition, filed in Portland, Maine, does not include parent Pegasus Communications Corp.

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