Plaintiffs in Intelsat Insider-Trading Suit Seeking 30-Day Filing Delay

Lead plaintiff Walleye Group in the April 2020 securities class action alleging insider trading of Intelsat stock is seeking a 30-day deadline extension to file its second amended complaint in the action, if it opts to file one at all, said its motion Monday (docket 4:20-cv-02341) in U.S. District Court for Northern California in Oakland.

U.S. District Judge Jeffrey White in a Sept. 27 order partially granted and partially denied the defendants’ motions to dismiss Walleye’s first amended complaint, finding the lead plaintiff’s allegations of insider trading were “insufficient.” But the judge granted Walleye leave to further amend its complaint, setting a Friday deadline for filing if the plaintiffs decide to do so.

The lawsuit alleged that Intelsat CEO Stephen Spengler and other C-Band Alliance members met with FCC officials to discuss the status of previous plans to auction off C-band spectrum privately, which the C-band Alliance had proposed and advocated for. During a Nov. 5, 2019 meeting with then-FCC Chairman Pai’s senior counsel Nicholas Degani, there was confirmation that the FCC was moving away from the alliance’s proposal. According to a confidential witness who worked at the alliance and was briefed on the meeting afterwards, “the meeting had gone poorly and … the messaging from the FCC was negative. Soon “after the November 5 meeting, McGlade, BC Partners, and Silver Lake sold $246 million in stock through a private block sale conducted by Morgan Stanley,” according to the lawsuit.

Walleye “failed to sufficiently allege” that defendants Silver Lake, BC Partners and David McGlade “possessed material non-public information and that it has failed to allege sufficient facts to show Defendants acted with scienter,” ruled White. Silver Lake consents to the motion to extend, and McGlade doesn't oppose it, it said. BC Partners and its affiliate defendants oppose the motion, "stating their view that the case is weak," said a declaration by Carol Villegas of Labaton Sucharow, counsel for lead plaintiff Walleye and lead counsel for the proposed class.

The prior amended complaint was filed more than 19 months ago, said Walleye, rationalizing its need for a 30-day extension. “Substantial developments concerning Intelsat, including lengthy bankruptcy proceedings, have occurred since then,” it said.

Walleye and its fellow plaintiffs “are diligently reviewing available information and renewing their investigation, to determine whether to file a second amended complaint,” it said. “The additional requested time would assist Plaintiffs in making a fully informed decision, and would cause a negligible delay in the overall timeline of the matter.”