The history of Loral Space and Communications begins with its precedessor company, Loral Corporation, which was an aerospace and defense company founded in 1972. By 1995, the Loral Coroporation had acquired 16 aerospace and defense companies. In 1996, the Loral Corporation sold their defense industry holdings to Lockheed Martin, becoming Loral Space and Communications.

In January 2002, after an investigation by the U.S. government into Loral Space and Communications’ involvement in a rocket launch failure in China, Loral reached a settlement with the State Department to pay $14 million without admitting or denying any charges.

Later, in 2003, Loral Space and Communications filed for Chapter 11 bankruptcy. The company emerged from bankruptcy in 2005, after selling its North American satellite fleet to Intelsat, Ltd.

Since emerging from bankruptcy in 2005, Loral Space and Communications has been made up of essentially two businesses, a satellite manufacturing company and a satellite communication services company.

Loral operates its satellite manufacturing company through Space Systems/Loral, which manufactures satellites for commercial interests including television and radio.

Loral controls its satellite communications services offering through Loral Skynet Corporation. in Octoer of 2007, Loral Skynet was transferred to a joint venture with Telesat, a Canadian satellite communications company. The terms of the deal give Loral 64% ownership of Telesat.

Loral is involved in another joint venture with HISDESAT, which is a conglomeration of Spanish satellite companies including Hispasat, S.A., and the government of Spain. This venture is known as XTAR, and Loral has ownership of over 56% of the venture.

In 2008, certain shareholders of Loral Space and Communications Inc. (“Loral”), sued the board of Loral for, among other claims, breach of fiduciary duty (see In re Loral Space and Communications Inc., Consolidated Litigation, 2008 WL 4293781 (Del. Ch., Sept. 19, 2008)) for approving a non-arm’s length equity investment (“Control Transaction”) in Loral by MHR Fund Management LLC (“MHR”). According to the Delaware Chancery Court’s opinion issued by Vice Chancellor Leo Strine, the Control Transaction did not meet the entire fairness standard under Delaware law, thereby requiring the Court to modify its terms. The following provides insight into the overall finance agreement and the court’s opinion.