-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IuwP0sUzIndFXGr9nso0kLD/zTNB9zRz3hDyqbo29OM3EcPjwjyNFAL5zMOfJNiN w7TR6A9Hmks1nzVPSgL2Jg== 0000950134-05-019189.txt : 20051014 0000950134-05-019189.hdr.sgml : 20051014 20051014161732 ACCESSION NUMBER: 0000950134-05-019189 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20051014 DATE AS OF CHANGE: 20051014 GROUP MEMBERS: HIGHLAND CAPITAL MANAGEMENT SERVICES INC GROUP MEMBERS: HIGHLAND CRUSADER OFFSHORE PARTNERS LP GROUP MEMBERS: HIGHLAND EQUITY FOCUS FUND LP GROUP MEMBERS: HIGHLAND LEGACY LIMITED GROUP MEMBERS: HIGHLAND SELECT EQUITY FUND LP GROUP MEMBERS: JAMES DONDERO GROUP MEMBERS: PAMCO CAYMAN LIMITED GROUP MEMBERS: PROSPECT STREET HIGH INCOME PORTFOLIO INC GROUP MEMBERS: PROSPECT STREET INCOME SHARES INC GROUP MEMBERS: STRAND ADVISORS INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MOTIENT CORP CENTRAL INDEX KEY: 0000913665 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 930976127 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42503 FILM NUMBER: 051139140 BUSINESS ADDRESS: STREET 1: 300 KNIGHTSBRIDGE, PKY. CITY: LINCOLNSHIRE STATE: IL ZIP: 60069 BUSINESS PHONE: 8474784200 MAIL ADDRESS: STREET 1: 300 KNIGHTSBRIDGE, PKY. CITY: LINCOLNSHIRE STATE: IL ZIP: 60069 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN MOBILE SATELLITE CORP DATE OF NAME CHANGE: 19931019 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HIGHLAND CAPITAL MANAGEMENT LP CENTRAL INDEX KEY: 0001167365 IRS NUMBER: 752716725 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 13455 NOEL ROAD STE 1300 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9726284100 MAIL ADDRESS: STREET 1: 13455 NOEL ROAD STE 1300 CITY: DALLAS STATE: TX ZIP: 75240 SC 13D/A 1 d29383sc13dza.htm AMENDMENT TO SCHEDULE 13D sc13dza
 

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 8)*

Motient Corporation

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

619908304

(CUSIP Number)

Patrick H. Daugherty, Esq.
Highland Capital Management, L.P.
Two Galleria Tower
13455 Noel Road, Suite 1300
Dallas, Texas 75240
(972) 628-4100

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

October 13, 2005

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.


 

             
CUSIP No. 619908304 Page 2 of 16

  1. Name of Reporting Person:
Prospect Street High Income Portfolio, Inc.
I.R.S. Identification Nos. of above persons (entities only):
04-3028343

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
WC

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
Maryland

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
1,155,224

8. Shared Voting Power:
0

9. Sole Dispositive Power:
1,155,224

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
1,155,224

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
1.7%

  14.Type of Reporting Person (See Instructions):
CO/IV

2


 

             
CUSIP No. 619908304 Page 3 of 16

  1. Name of Reporting Person:
Prospect Street Income Shares Inc.
I.R.S. Identification Nos. of above persons (entities only):
36-2765811

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
WC

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
Maryland

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
111,940

8. Shared Voting Power:
0

9. Sole Dispositive Power:
111,940

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
111,940

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
0.2%

  14.Type of Reporting Person (See Instructions):
CO/IV

3


 

             
CUSIP No. 619908304 Page 4 of 16

  1. Name of Reporting Person:
Highland Legacy Limited
I.R.S. Identification Nos. of above persons (entities only):

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
WC

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
Cayman Islands

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
223,880

8. Shared Voting Power:
0

9. Sole Dispositive Power:
223,880

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
223,880

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
0.3%

  14.Type of Reporting Person (See Instructions):
OO

4


 

             
CUSIP No. 619908304 Page 5 of 16

  1. Name of Reporting Person:
Highland Crusader Offshore Partners, L.P.
I.R.S. Identification Nos. of above persons (entities only):

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
WC

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
Bermuda

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
5,352,497

8. Shared Voting Power:
0

9. Sole Dispositive Power:
5,352,497

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
5,352,497

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
8.1%

  14.Type of Reporting Person (See Instructions):
PN

5


 

             
CUSIP No. 619908304 Page 6 of 16

  1. Name of Reporting Person:
PAMCO Cayman, Limited
I.R.S. Identification Nos. of above persons (entities only):

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
WC

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
Cayman Islands

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
223,880

8. Shared Voting Power:
0

9. Sole Dispositive Power:
223,880

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
223,880

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
0.3%

  14.Type of Reporting Person (See Instructions):
OO

6


 

             
CUSIP No. 619908304 Page 7 of 16

  1. Name of Reporting Person:
Highland Equity Focus Fund, L.P.
I.R.S. Identification Nos. of above persons (entities only):
46-0491961

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
WC

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
Delaware

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
1,518,779

8. Shared Voting Power:
0

9. Sole Dispositive Power:
1,518,779

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
1,518,779

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
2.3%

  14.Type of Reporting Person (See Instructions):
PN

7


 

             
CUSIP No. 619908304 Page 8 of 16

  1. Name of Reporting Person:
Highland Select Equity Fund, L.P.
I.R.S. Identification Nos. of above persons (entities only):

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
WC

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
Delaware

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
119,283

8. Shared Voting Power:
0

9. Sole Dispositive Power:
119,283

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
119,283

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
0.2%

  14.Type of Reporting Person (See Instructions):
PN

8


 

             
CUSIP No. 619908304 Page 9 of 16

  1. Name of Reporting Person:
Highland Capital Management Services, Inc.
I.R.S. Identification Nos. of above persons (entities only):

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
WC

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
Delaware

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
182,748

8. Shared Voting Power:
0

9. Sole Dispositive Power:
182,748

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
182,748

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
0.3%

  14.Type of Reporting Person (See Instructions):
CO

9


 

             
CUSIP No. 619908304 Page 10 of 16

  1. Name of Reporting Person:
Highland Capital Management, L.P.
I.R.S. Identification Nos. of above persons (entities only):
75-2716725

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
AF/WC

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
Delaware

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
8,822,764

8. Shared Voting Power:
0

9. Sole Dispositive Power:
8,822,764

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
8,822,764

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
13.3%

  14.Type of Reporting Person (See Instructions):
IA/PN

10


 

             
CUSIP No. 619908304 Page 11 of 16

  1. Name of Reporting Person:
Strand Advisors, Inc.
I.R.S. Identification Nos. of above persons (entities only):
95-4440863

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
AF

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
Delaware

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
8,822,764

8. Shared Voting Power:
0

9. Sole Dispositive Power:
8,822,764

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
8,822,764

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
13.3%

  14.Type of Reporting Person (See Instructions):
CO

11


 

             
CUSIP No. 619908304 Page 12 of 16

  1. Name of Reporting Person:
James Dondero
I.R.S. Identification Nos. of above persons (entities only):

  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) þ  
    (b) o  

  3. SEC Use Only:

  4. Source of Funds (See Instructions):
AF/PF

  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

  6. Citizenship or Place of Organization:
United States

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
9,024,326

8. Shared Voting Power:
0

9. Sole Dispositive Power:
9,024,326

10.Shared Dispositive Power:
0

  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
9,024,326

  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

  13.Percent of Class Represented by Amount in Row (11):
13.6%

  14.Type of Reporting Person (See Instructions):
IN

12


 

Page 13 of 16
     This Amendment No. 8 to Schedule 13D amends and supplements the Schedule 13D filed with the Securities and Exchange Commission (the “Commission”) on June 10, 2002, as amended by Amendment No. 1 to Schedule 13D filed with the Commission on October 20, 2003, Amendment No. 2 to Schedule 13D filed with the Commission on July 12, 2004, Amendment No. 3 to Schedule 13D filed with the Commission on November 16, 2004, Amendment No. 4 to Schedule 13D filed with the Commission on April 15, 2005, Amendment No. 5 to Schedule 13D filed with the Commission on September 7, 2005, Amendment No. 6 to Schedule 13D filed with the Commission on September 29, 2005 and Amendment No. 7 to Schedule 13D filed with the Commission on October 11, 2005 (as amended, the “Schedule 13D”). Capitalized terms used herein which are not defined herein have the meanings given to such terms in the Schedule 13D. Except as otherwise provided herein, all Items of the Schedule 13D remain unchanged.
Item 4. Purpose of the Transaction.
     Item 4 is hereby supplemented as follows:
     On October 13, 2005, Mr. James D. Dondero, a member of the Board of Directors (the “Board”) of Motient Corporation (the “Company”), whose principal business is serving as the President of Highland Capital Management, L.P., sent the attached letter to the other members of the Board, expressing his opinions and continued concerns with respect to questionable fiduciary behavior by the other members of the Board already alleged in various lawsuits, and responding to various allegations leveled against him in the letter from the Company to Mr. Dondero and accompanying press release attached as exhibits to that certain Current Report on Form 8-K filed by the Company on October 6, 2005. A copy of the letter from Mr. Dondero is attached hereto as Exhibit 11.
     In response to the foregoing actions, among others, the Reporting Persons are considering various plans or proposals which relate to or could result in the transactions or changes contemplated by Items 4(a) through 4(j) of Schedule 13D. Such plans or proposals could include acquisitions of additional shares in the open market or otherwise and potentially seeking possible changes in the present Board and management of the Company. In the interim and prior to formulating any definitive plan or proposal, the Reporting Persons may communicate with other stockholders regarding their concerns about the actions taken by the Company and its management.
Item 7. Material to be Filed as Exhibits.
     Item 7 is hereby amended and supplemented as follows:
     
Exhibit 11
  Letter of James D. Dondero to the Board of Directors of Motient Corporation, dated October 13, 2005.

 


 

Page 14 of 16
SIGNATURE
     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: October 14, 2005
         
  HIGHLAND CAPITAL MANAGEMENT, L.P.
 
 
  By:   Strand Advisors, Inc., its general partner   
 
    By:   /s/ James Dondero   
    Name:   James Dondero   
    Title:   President   
 
  STRAND ADVISORS, INC.
 
 
  By:   /s/ James Dondero    
    Name:   James Dondero   
    Title:   President   
 
  /s/ James Dondero    
  James Dondero   
 
  PROSPECT STREET HIGH INCOME PORTFOLIO, INC.
 
  By:   /s/ James Dondero    
    Name:   James Dondero   
    Title:   President   
 
  PROSPECT STREET INCOME SHARES INC.
 
 
  By:   /s/ James Dondero    
    Name:   James Dondero   
    Title:   President   
 
  HIGHLAND LEGACY LIMITED
 
 
  By:   Highland Capital Management, L.P., its collateral manager 
  By:   Strand Advisors, Inc., its general partner   
 
     
    By:   /s/ James Dondero    
    Name:   James Dondero   
    Title:   President   
 
  HIGHLAND CRUSADER OFFSHORE PARTNERS, L.P.
 
  By:   Highland Capital Management, L.P., its general partner 
  By:   Strand Advisors, Inc., its general partner   
 
    By:   /s/ James Dondero    
    Name:   James Dondero   
    Title:   President   

 


 

         
Page 15 of 16
         
  PAMCO CAYMAN, LIMITED
 
 
  By:   Highland Capital Management, L.P., its collateral manager 
  By:   Strand Advisors, Inc., its general partner   
 
    By:   /s/ James Dondero    
    Name:   James Dondero   
    Title:   President   
 
  HIGHLAND EQUITY FOCUS FUND, L.P.
 
 
  By:   Highland Capital Management, L.P., its general partner 
  By:   Strand Advisors, Inc., its general partner   
 
    By:   /s/ James Dondero    
    Name:   James Dondero   
    Title:   President   
 
  HIGHLAND SELECT EQUITY FUND, L.P.
 
 
  By:   Highland Capital Management, L.P., its general partner 
  By:   Strand Advisors, Inc., its general partner   
 
    By:   /s/ James Dondero    
    Name:   James Dondero   
    Title:   President   
 
  HIGHLAND CAPITAL MANAGEMENT SERVICES, INC.
 
  By:   /s/ James Dondero    
    Name:   James Dondero   
    Title:   President   

 


 

         
Page 16 of 16
APPENDIX I
     The name of each director and officer of HCM Services, Strand, Prospect Portfolio and Prospect Shares is set forth below. Unless otherwise indicated, the business address of each person listed below is Two Galleria Tower, 13455 Noel Road, Suite 1300, Dallas, Texas 75240. Each person identified below is a citizen of the United States of America. The present principal occupation or employment of each of the listed persons is set forth below. During the past five years, none of the individuals listed below has been convicted in a criminal proceeding or been a party to a civil proceeding, in either case of the type specified in Items 2(d) or (e) of Schedule 13D.
     
    Present Principal Occupation or Employment
Name   and Business Address (if applicable)
 
   
Highland Capital Management Services, Inc.
   
 
   
James D. Dondero, Director
  President
 
   
Mark K. Okada, Director
  Executive Vice President
 
   
Patrick H. Daugherty
  Secretary
 
   
Todd A. Travers
  Assistant Secretary
 
   
J. Kevin Ciavarra
  Assistant Secretary
 
   
David Lancelot
  Treasurer
 
   
Chad Schramek
  Treasurer
 
   
 
   
Strand Advisors, Inc.
   
 
   
James D. Dondero, Director
  President
 
   
Mark K. Okada
  Executive Vice President
 
   
R. Joseph Daugherty
  Vice President
 
   
Todd A. Travers
  Secretary
 
   
J. Kevin Ciavarra
  Assistant Secretary
 
   
Chad Schramek
  Treasurer
 
   
 
   
Prospect Street High Income Portfolio, Inc. and Prospect Street Income Shares Inc.
 
   
 
   
James D. Dondero, Director
  President
 
   
Mark K. Okada
  Executive Vice President
 
   
R. Joseph Daugherty, Director
  Senior Vice President
 
   
M. Jason Blackburn
  Secretary and Treasurer
 
   
Michael S. Minces
  Chief Compliance Officer
 
   
Timothy K. Hui, Director
  Associate Provost for Graduate Education of the Pennsylvania Biblical University, 48 Willow Green Drive, Churchville, Pennsylvania 18966
 
   
Scott F. Kavanaugh, Director
  Private investments
 
   
James F. Leary, Director
  Managing Director of Benefit Capital Southwest, Inc., 2006 Peakwood Drive, Garland, Texas 75044
 
   
Bryan A. Ward, Director
  Senior Manager of Accenture, LLP, 3625 Rosedale, Dallas, Texas 75205

 

EX-11 2 d29383exv11.htm LETTER exv11
 

EXHIBIT 11
HIGHLAND CAPITAL MANAGEMENT, L.P.
1300 Two Galleria Tower
13455 Noel Road, LB 45
Dallas, Texas 75240
October 13, 2005
Via Certified Mail
Board of Directors
Motient Corporation
300 Knightsbridge Pkwy.
Lincolnshire, Illinois 60069
Ladies and Gentlemen:
This past Thursday, Motient Corporation filed a Form 8-K that attempted to characterize me as the villain in what has certainly been a bumpy road for Motient over the past few months. Motient’s one-sided, self-exonerating public statements reveal your new strategy to shift the blame to me for your recent problems, thereby clearing a path for management and the Board to continue forward with their own self-serving agenda.
Although I am disappointed, I cannot say that I am surprised. I have become accustomed to being the party-spoiler in refusing to cover up your inappropriate actions, your fiduciary breaches and your divided loyalties that continue to adversely affect Motient and its stockholders. Based on your public statements, however, I believe I should set the record straight so that the stockholders can get a clear picture of what is actually going on here.
My “Baseless” Allegations and Our Audit Committee
Motient finally publicly disclosed in its recent public statements that its Audit Committee has been conducting an internal investigation since July 2005 of various allegations that I have asserted against other Board members, consultants to Motient and third parties. As you know, I raised these concerns directly to the Audit Committee, together with a long list of questions regarding past actions by these persons and entities, in an effort to address and correct these problems through Motient’s internal corporate governance procedures.

 


 

Board of Directors
Motient Corporation
October 13, 2005
Page 2
From the outset of this purported “investigation,” I was told that my list of questions was overly broad and did not include sufficient facts to support my allegations. I consistently responded that it was the duty of the Audit Committee to conduct a thorough investigation of these questions and to uncover the facts supporting my list of concerns. In spite of numerous requests for information and status updates, the Audit Committee provided neither and slowly went about its business, saying that their work could take up to six months to complete. Assisting the committee was their “special independent counsel,” a firm recommended by Motient’s general counsel that later admitted to assisting Motient with various past legal matters, raising questions as to its actual independence.
Motient now seeks to put an end to this investigation by pronouncing my claims to be “inaccurate, baseless, and unsubstantiated.” To date, neither I nor the entire Board of Directors have seen a formal report of the Audit Committee or any evidence of what occurred in this investigation. At no time prior to these public statements was the Board informed that this investigation was complete. At no time was information provided to the Board that supported the conclusions reached by this “kangaroo court.” Again, it appears that the deliberation and discussion process required for Board action under Delaware law was not followed. Therefore, I believe that individual Board members must immediately be provided with a copy of the report discussing the process, the facts discovered and the specific results of this investigation. Specifically, the report should address the Audit Committee’s findings regarding the apparent conflicts of interest, fiduciary lapses and excessive payments that are sprinkled throughout this company’s history over the past two years. I also demand that a Board meeting be convened to discuss this report after sufficient time is given to the Board members to digest this information.
Highland’s Lawsuits
Due to the mishandling of these matters by Motient’s Board of Directors and the continuing conflicts of interest orchestrated by the Singer brothers, Highland Capital Management decided in late August to commence litigation against Motient, its other directors and several conspiring third parties on behalf of itself and all other stockholders. Through this litigation, Highland intends to ensure that these allegations of fiduciary misconduct are properly investigated and pursued. Until this is completed, we have no intention of dismissing any of these lawsuits. In fact, we filed a fourth lawsuit against Motient on Friday in Delaware seeking to enjoin the exchange offer that Motient has recently commenced in an attempt to cure its April 2005 issuance of void preferred stock. We intend to argue for this injunction on the grounds that Motient’s actions are coercive to stockholders and that the related exchange offer materials fail to provide adequate disclosure to stockholders.
In due course, Motient and the current Board members will be required to answer the questions that we have raised, including, among others, the following:

 


 

Board of Directors
Motient Corporation
October 13, 2005
Page 3
    Was it appropriate for Motient to pay Tejas Securities, a tiny Austin-based securities firm, tens of millions of dollars in placement fees to assist Motient with its past private placements, especially considering that these sales were primarily to existing insiders? Was there any competitive bidding involved in the selection of Tejas Securities?
 
    Was it appropriate for Motient to pay Jared Abbruzzese (a Motient director for much of this time; now the Vice Chairman of Tejas Securities) and his consulting firm CTA millions of dollars in “consulting fees” to advise Motient through this process, including the advice to hire Tejas Securities?
 
    Isn’t it odd that Tejas Securities and CTA mysteriously merged their businesses in May 2005 after collecting all of these fees from Motient? Shouldn’t there have been more disclosure in Motient’s public filings of these connections?
 
    Is nobody else uncomfortable with the fact that Gary Singer, a convicted felon barred by the SEC from ever serving as a director of a public company, has been heavily involved (and paid) in orchestrating the management of Motient for the past few years?
 
    Does it not make others uncomfortable that the so-called “independent” directors of Motient and senior management of Motient have a web of connections with the Singer brothers and Mr. Abbruzzese?
Alleged Factual Inaccuracies
Motient’s recent public statements also contain various ad hominem attacks on Highland. Moreover, they urge me to address certain “inaccurate statements and factual errors” that Highland and I allegedly have made in pursuing my concerns. Based on the list of items that you have presented, it would appear that you are trying to impugn our integrity and motives through spurious allegations about immaterial facts. Set forth below are our responses:
    Highland Share Ownership
    Your Allegation: You claim that Highland misstated its aggregate share ownership in Motient when Highland reported its ownership at approximately 14%.

 


 

Board of Directors
Motient Corporation
October 13, 2005
Page 4
    The Truth: Highland and its affiliates have correctly reported on multiple occasions that their aggregate beneficial ownership of Motient’s common stock is approximately 13.6% of the outstanding shares of common stock based on Motient’s most recently published Form 10-Q. Highland has calculated this percentage in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, which requires Highland to include in this number any shares owned directly as well as any shares that may be acquired within 60 days through the exercise of any warrants or through the conversion of convertible securities.
    Public MSV Financial Statements
    Your Allegation: Highland incorrectly stated that MSV does not have audited financial statements when such financial statements were included in Motient’s last Form 10-K.
 
    The Truth: Highland acknowledges this error in its September 29 letter to Mr. Downie and regrets any confusion that it may have caused. Highland’s point was simply that MSV is not itself a public company and does not make its own periodic filings with the SEC.
    MSV’s Access to the Public Markets
    Your Allegation: Highland inaccurately stated that MSV has no access to the public markets under the rationale that “Motient is not the only public investor in MSV.”
 
    The Truth: I think you missed the point. We simply criticized the proposed MSV/Terrestar transaction in that it provides a public market for MSV equity holders that is currently not available and that Motient is being used to gain access to the public markets. This enhanced liquidity and related market access do not seem to have been considered in the valuation process related to the proposed transaction.
    Board Consideration
    Your Allegation: You state that (i) there were multiple “meetings” at which the proposed transaction was discussed, and (ii) that my representative attended “the meeting.”
 
    The Truth: The only meetings that either I or my representatives attended addressed the proposed transaction as if it were a done deal. There were only general descriptions of the deal and its terms. When pressed for greater detail, no information was provided. In fact, the final term sheet was only provided to us after the Form 8-K announcing the proposed

 


 

Board of Directors
Motient Corporation
October 13, 2005
Page 5
      transaction was released to the public. While Motient may have viewed these discussions as being satisfactory to “check the box” for corporate compliance purposes, my previous statement was that such a substantive corporate action deserves a more thorough and meaningful discussion and analysis by the Board.
Nominating Committee Actions
Motient’s public statements also reveal that its Nominating Committee has been engaged in an investigation of whether I disclosed to any third party any material non-public information that I obtained in my role as a member of Motient’s Board of Directors. I reconfirm to you that neither I nor my representatives have disclosed any material non-public information regarding Motient to any other stockholder or any third party nor have I breached my fiduciary duties to Motient or violated any laws or regulations.
Your reference to litigation by Joshua Wheelock (a former UBS trader) against Highland also is misleading and irrelevant to the issues being raised. Mr. Wheelock seeks relief from Highland in connection with claims surrounding his departure from UBS and is not alleging that either I or Highland engaged in any insider trading or disclosed material non-public information in violation of securities laws. Again, it appears you are attempting to focus attention on matters that have no relevance to the issues raised in the Highland litigation or in my series of correspondence with the Board as a means of distracting stockholders from your actions. This is consistent with Singer’s behavior in the Cooper Companies investigation. Are Gary and Steven again pulling the strings here at Motient?
It is ironic that you accuse me of taking actions that unnecessarily draw upon corporate assets by pursuing baseless actions when that is true of this Board. Your allegations against me and the half-baked investigation by the Nominating Committee are without merit and are merely an attempt by Motient’s management to deflect attention raised by my claims and to keep me uninformed about the proposed disguised sale of Motient. How can this be in the best interests of Motient stockholders?
Highland Capital and its Alleged Litigious Background
In your public statements you also suggest that Highland’s motives are tarnished because of Highland’s litigious history, a history that was never fully disclosed to you. Again, your ad hominem attack against Highland also appears to be intended to shift the spotlight in this matter from yourselves to me.

 


 

Board of Directors
Motient Corporation
October 13, 2005
Page 6
As you know, Highland is an SEC-registered Dallas-based investment advisory firm that manages approximately $16 billion of capital. The vast majority of our investments are in the form of senior secured debt of U.S.-based companies. Over the years, many of the debt issuers in which Highland has invested have filed for bankruptcy and Highland, like other similarly structured distressed investment managers, has simply sought to protect its interest (and others who are similarly situated) through the U.S. bankruptcy system and through court proceedings. This is common practice for like-minded managers.
Of the 53 suits that you actually list (note that your list includes several duplicate listings), the vast majority relate to bankruptcy-related proceedings arising from Highland’s normal distressed investment-related activities. Highland views these actions as evidence of its resolve to maximize value for investors when faced with bankrupt issuers. The remaining suits listed in your public statements involved matters that Highland believe arose in the ordinary course of its business, including (i) personnel issues at Highland, (ii) trading disputes with brokerage firms and (iii) vendor disputes. In fact, your list of litigation matters included suits in which my name was merely mentioned (and I was not even a party). Again, what purpose are you seeking to achieve by disseminating this sort of misinformation? None of the suits involved a derivative or class action claim with a company in which Highland held an equity interest.
You also argue that I failed to disclose all of these past matters to you. I have disclosed on numerous occasions that Highland has been involved in various matters arising in the ordinary course of its business. If it was so important to Motient that Highland had commenced litigation over various of its investments and if it is something that Motient did not know (which I question), Motient could have easily discovered this information by undertaking normal diligence measures. The fact that Highland is a party to various proceedings demonstrates its commitment to its investors and its desire to maximize potential investment returns. These are all goals that should be synonymous with what management of Motient is attempting to achieve for its stockholders. Unfortunately, this has not been the case. If you really want to disclose relevant litigation, consider Gary Singer’s felony conviction for securities fraud or the investigation of Steven Singer in the Cooper Companies matter.
Public Confusion
The stockholders of Motient must be wondering about Highland’s motives. Why would the largest stockholder of Motient (i) be suing Motient, and (ii) be suing the Board for past actions during times when I also served as a director? I assure you that this is not a case of retaliation for being removed from the Compensation Committee, as you suggest. Does that even make sense given the size of our investment? The simple answer is that we believe strongly in Motient’s business and its prospects, but we no longer believe in Motient’s current leadership. In fact, we believe that Motient is being harmed by its current management and Executive Committee to the detriment of its stockholders, including Highland, and that these fiduciary lapses should be rectified. After years of

 


 

Board of Directors
Motient Corporation
October 13, 2005
Page 7
trying to work with this management team through one disagreement after another, we decided to shift our strategy to one that more forcefully seeks to rectify the inappropriateness of this Board’s past actions and to prevent future actions that conflict with the best interests of Motient stockholders.
In your public statements, you remind me that I “owe all Motient stockholders a duty to act, at all times, loyally, with due care and in good faith to promote the best interests of those shareholders, and may not place [my] own interests or those of [my] affiliates ahead of [my] duties as a Motient director.” I accept these fiduciary duties and believe that I have fulfilled them at all times. I suggest, however, that you look at yourselves in the mirror when reminding me of my duties, as it is you that have strayed out of bounds.
Sincerely,
/s/ James D. Dondero
James D. Dondero

 

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