Opinion ID: 152242
Heading Depth: 2
Heading Rank: 3

Heading: Financing the 2000 Planthe Claim 14 Loans

Text: In addition to the TDS loan that would pay for the Ericsson and OEDA claims, three other TDS loans are important to our story. [3] The loans were part of the 2000 Plan and have become the subject of a new claim in the 2006 bankruptcy. We will call these advances of funds the Claim 14 Loans. The Claim 14 Loans comprise the Confirmation Loan, the Working Capital Loan, and the Construction Loan. The Confirmation Loan furnished funds for a $30 million collateral payment to Ericsson that is not in issue, as well as funds to pay administrative expense claims, priority claims, and a few other claims that are not important to this case. The loan was to be secured by a first priority security interest in all of Airadigm's Unlicensed Assetsa term defined in the 2000 Plan to include every Airadigm asset except the FCC licenses and the proceeds of the licenses. However, the 2000 Plan and the loan documents suggest that the loan was not a loan at all, but an asset sale. Although the loan accrued interest at a yearly rate of 8.5%, the 2000 Plan also stated that [t]he Confirmation Loan will be repaid by the surrender to Buyers that is, TDSof all collateral securing the Confirmation Loan, and Buyers shall be obligated to accept a surrender of the collateral in full and complete satisfaction of the Confirmation Loan. 2000 Plan § 6.3 (emphasis added). That feature, repayment solely by collateral surrender, is the FCC's problem with the loan. The second TDS loan was the Working Capital Loan. The Working Capital Loan was secured by a negative pledge of Airadigm's assets and was to be used by Airadigm for its ongoing working capital needs. Under the 2000 Plan, the loan amount was for up to $600,000 per month, an amount which would be reduced to the extent Airadigm could stand on its own. Interest on the Working Capital Loan was to accrue at a yearly rate of 8.5%. The amount of the loan and the interest were due and payable on the Funding Termination Date. 2000 Plan §§ 6.6, 6.7. The loan was to be repaid by surrendering Airadigm's non-license assets. App. 135. The third TDS loan was the Construction Loan. The Construction Loan was for not less than $1.5 million    for the purpose of financing [Airadigm's] acquisition and construction of additional cell sites. The loan was secured by a first priority purchase money security interest in the equipment and property that was purchased with the loan. The loan contained the same now-controversial provision that appeared in the other loans: The Construction Loan will be repaid by the surrender of the collateral securing the Construction Loan to [TDS], and [TDS] shall be obligated to accept a surrender of the collateral in full and complete satisfaction of the Construction Loan. 2000 Plan § 6.8.