-----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, V1dOmaUlms8PQ+J3M1XwDUmQeNt90+I9qswm7VjsbSInqu4it9QpKhKFw9TKjdCJ pNXrLuhtFrBge8/u4bZUgw== 0000950134-05-019534.txt : 20051021 0000950134-05-019534.hdr.sgml : 20051021 20051021171654 ACCESSION NUMBER: 0000950134-05-019534 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20051021 DATE AS OF CHANGE: 20051021 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: 051150439 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 d29529sc13dza.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. 9)*

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 21, 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 17

  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


 

             
CUSIP No. 619908304 Page 3 of 17

  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


 

             
CUSIP No. 619908304 Page 4 of 17

  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


 

             
CUSIP No. 619908304 Page 5 of 17

  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


 

             
CUSIP No. 619908304 Page 6 of 17

  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


 

             
CUSIP No. 619908304 Page 7 of 17

  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


 

             
CUSIP No. 619908304 Page 8 of 17

  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


 

             
CUSIP No. 619908304 Page 9 of 17

  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


 

             
CUSIP No. 619908304 Page 10 of 17

  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


 

             
CUSIP No. 619908304 Page 11 of 17

  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


 

             
CUSIP No. 619908304 Page 12 of 17

  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


 

Page 13 of 17
     This Amendment No. 9 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 19, 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, Amendment No. 7 to Schedule 13D filed with the Commission on October 11, 2005 and Amendment No. 8 to Schedule 13D filed with the Commission on October 14, 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 21, 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 the General Partner of Highland Capital Management, L.P. (“Highland”), sent the attached letter to the other members of the Board, addressing the amended exchange offer by the Company (the “Exchange Offer”), attached as an exhibit to the tender offer of the Company filed with the Commission on October 12, 2005, pursuant to which the Company is seeking to exchange its Series B Cumulative Convertible Preferred Stock (the “Series B Preferred”) for outstanding shares of Series A Cumulative Convertible Preferred Stock of the Company (the “Series A Preferred”). The Exchange Offer amends the initial exchange offer of the Company which was commenced on September 27, 2005 (the “Initial Exchange Offer”), in response to a class action lawsuit (the “Class Action”) that was brought against the Company and certain of its officers and directors to enjoin the Initial Exchange Offer, on behalf of certain of the Reporting Persons and all similarly situated holders of the Series A Preferred. As the Exchange Offer is in direct response to the issues raised by the Class Action, Mr. Dondero’s letter requests that the Board approve the reimbursement of all fees and costs with respect to the Class Action incurred by the holders of the Series A Preferred. Mr. Dondero’s letter also expresses his significant concerns that the Exchange Offer still contains material misstatements and omissions that make it impossible for holders of the Series A Preferred to make a fully informed decision regarding the Exchange Offer. A copy of the letter from Mr. Dondero is attached hereto as Exhibit 99.1.
     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 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
     Pursuant to the acquisition on April 15, 2005, of an aggregate of 90,000 shares of the Series A Preferred by Highland Crusader Offshore Partners, L.P., Highland Equity Focus Fund, L.P., Highland Capital Management Services, Inc. and Highland (collectively, the “Highland Purchasers”) from the Company in a private offering (the “Series A Preferred Offering”), certain of the Reporting Persons own shares of the Series A Preferred that are currently the subject of litigation, which, among other things, seeks the rescission of the Company’s sale of the Series A Preferred.


 

Page 14 of 17

     In connection with the Series A Preferred Offering, on April 15, 2005, the Highland Purchasers acquired warrants to purchase an aggregate of 33,951 shares of Common Stock from the Company (the “April 2005 Warrants”). The Reporting Persons understand that as a result of the Company’s failure to have a registration statement covering the April 2005 Warrants declared effective by the Commission, the April 2005 Warrants are currently vesting pursuant to their terms. However, due to certain restrictions in the April 2005 Warrants affecting persons beneficially owning more than 9.9% of the Company’s outstanding common stock, the Reporting Persons are currently unable to exercise their April 2005 Warrants.
Item 7. Material to be Filed as Exhibits.
     Item 7 is hereby amended and supplemented as follows:
     
Exhibit 99.1
  Letter of James D. Dondero to the Board of Directors of Motient Corporation, dated October 21, 2005.


 

Page 15 of 17

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 21, 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 16 of 17

             
    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 17 of 17

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-99.1 2 d29529exv99w1.htm LETTER TO BOARD OF DIRECTORS exv99w1
 

EXHIBIT 99.1
HIGHLAND CAPITAL MANAGEMENT, L.P.
1300 Two Galleria Tower
13455 Noel Road, LB 45
Dallas, Texas 75240
October 21, 2005
Via Certified Mail
Board of Directors
Motient Corporation
300 Knightsbridge Pkwy.
Lincolnshire, Illinois 60069
Ladies and Gentlemen:
As you know, on October 7, 2005, affiliates of Highland Capital Management, L.P. (collectively, “Highland”), on behalf of themselves and other similarly situated holders of Series A Convertible Preferred Stock (“Series A”), brought an action (the “Complaint”) against Motient Corporation (the “Company”) and its directors seeking to enjoin the exchange offer of Company shares originally announced on September 27, 2005 (the “Exchange Offer”). On October 12, 2005, the Company amended the documentation relating to the Exchange Offer to modify various prior disclosures concerning the proposed exchange of Series A shares for shares of Series B Convertible Preferred Stock (“Series B”). This amendment also attempted to amend the terms and structure of the Exchange Offer such that Series A shares would no longer be coerced into accepting the exchange.
The Complaint alleged that the Company and its directors breached their fiduciary duties to the Series A holders by failing to disclose all material facts relating to the Exchange Offer and by structuring its terms so as to inequitably coerce the Series A holders into tendering pursuant to the Exchange Offer. Only after the Complaint was filed and the court scheduled a hearing on a related motion for expedited discovery did the Company file the amended Exchange Offer documents.
Because the October 12, 2005 amendments were in direct response to and provided some of the relief sought by the Complaint, I would request that the Board approve reimbursement for and agree to pay all fees and costs, including reasonable attorneys’ fees, incurred by Highland (on behalf of the Series A holders) relating to the Complaint. The Complaint, which resulted in legally required changes to the Exchange Offer’s misleading disclosures and coercive structure, yielded a substantial benefit to the Series A holders and the Company. Therefore, it is only appropriate that the Company reimburse Highland for these fees and costs.

 


 

Board of Directors
Motient Corporation
October 21, 2005
Page 2
While the amended disclosures addressed many of the issues identified in the Complaint, the current disclosures, even as amended, continue to raise several issues that I think should be addressed by the Company and the members of the Board before the expiration of the Exchange Offer so that the Series A holders are able to make a fully informed decision regarding the Exchange Offer.
First, I am deeply troubled by the newly included statements in the Exchange Offer documentation regarding accounting “consents.” In a remarkably evasive sentence, the Company states that “If the required accounting consents were given and the Series was later found to be void, the accounting firm issuing the consent could have potential liability with respect to the financial statements included in the registration statement that they audited.” This statement requires clarification. Is there really an issue regarding “consents” or is the issue more fundamental — the contingent liability resulting from issuing void shares and/or a possible restatement of prior quarters given the voidability issue? Has management even talked to its auditors about the meaning of this disclosure and cleared the statements with them? Are the auditors unwilling to provide this “consent” if any portion of the Series A shares remains outstanding? If Highland or any other Series A holder elects not to exchange, does this issue really go away? Is 100% acceptance required to correct this problem — not a majority on which the Exchange Offer is conditioned? Is this statement a disguised assertion by the accountants that they believe the Series A shares are in fact void? If not, why else would the level of stockholder participation in the Exchange Offer affect their willingness to issue the accounting “consents”? Does this inability to obtain accounting “consents” for audited financial statements more broadly affect the Company and its financial statements? Shouldn’t this be disclosed? Indeed, does this mean that the Company is currently unable to obtain any audited financial statements for any purpose? Does this require public disclosure and perhaps a Form 8-K filing? The holders of the Series A shares are entitled to more information on this critical issue, especially if the Series B shares may be subject to the same issue and the exchange does not solve the problem.
Second, the October 12, 2005 amendments included the statement that the Board of directors is not making a recommendation as to whether Series A holders should exchange their shares for Series B shares, supposedly in direct response to either issues raised by the Securities and Exchange Commission or because I have expressed strong opposition to the Exchange Offer as evidenced by litigation in Texas1 and the Complaint. To my knowledge, the Board has not met to discuss the Exchange Offer (unless that meeting was called without the required notice and conducted without my presence). I know of no meeting where the Exchange Offer documents were reviewed or a conclusion
 
1 The new disclosures in the October 12, 2005 amendments (repeated at least twice) suggesting that Highland is somehow to blame for the Company’s 2005 issuance of the Series A shares in violation of the Company’s charter are both inaccurate and misleading. Rather than debate the reasons for the Company’s failure, a Texas court will decide the validity of the Series A shares after hearing the complete facts.

 


 

Board of Directors
Motient Corporation
October 21, 2005
Page 3
was reached regarding the decision not to recommend to stockholders whether to tender pursuant to the Exchange Offer.
Perhaps the newly-formed Executive Committee is making this recommendation, but even among the broad powers that the Executive Committee arrogated for itself, the power to speak for the Board as a whole was not one of those powers. In any event, the disclosure is misleading. The holders of the Series A shares are entitled to a frank disclosure of the recommendation of the Board of Directors, not the opinion of the Executive Committee masquerading as the Board of Directors.
Third, the Exchange Offer gives the directors, Andrews Kurth LLP and others a broad release from potential liability to the Series A holders. This action appears to be self-interested and an inherent conflict of interest and one that should not be sanctioned by the Board. At a minimum, the conflict should be highlighted and discussed. The rush to documentation and lack of deliberation provide further evidence of the ongoing wrongs being perpetuated by current management of the Company. I would also question whether such release would be an enforceable “knowing” release in light of the incomplete disclosures in the Exchange Offer materials referenced elsewhere herein.
Fourth, the disclosure regarding the liability releases is materially misleading. They reference releases of the Company’s officers, directors, agents, attorneys and representatives. Who exactly is receiving these releases? Why was Andrews Kurth included, although not specifically named in the documents? More importantly, what consideration, if any, have these parties (including Andrews Kurth) provided for these releases? Are the releases legally binding? Why are the releases part of the Exchange Offer? Who initiated a report for releases? The stated goals and purposes of the Exchange Offer could be reached without these releases. Nowhere does it state that one of the purposes of the Exchange Offer is to obtain these releases. Has the Company released these same third parties? If so, why and why is it not disclosed? If not, why then are the preferred stockholders being asked to release those claims? Why are these releases included — I can only assume to benefit and cover up the past bad acts of management.
Fifth, there are a number of other areas where the Exchange Offer documents continue to mislead investors. Specifically, I am deeply concerned by, and point your attention to, the following non-exhaustive list of issues raised by the amended Exchange Offer:
  Ø    Insufficient disclosure regarding the potential value of any rescission right associated with the Series A shares to the Series A holders as a result of the Company’s declining stock price and dilution threatened by the proposed transaction with Mobile Satellite Ventures, LP;

 


 

Board of Directors
Motient Corporation
October 21, 2005
Page 4
  Ø   Misleading disclosure regarding dividend payments stating that the first semi-annual dividend payment on the Series A shares is due on November 15, 2005, which is seven months, rather than six months, from the April 15, 2005 initial calculation date for dividends; and
  Ø   Misleading disclosure stating that the initial intent of parties was that Series A holders would have “limited,” rather than no, voting rights.
Clearly, a careful review of all disclosures is required — including a review by each Board member and the requisite due diligence by the Board and management.
At this point in time, given the issues raised by these omissions and misleading disclosures and the lack of complete information provided by the Company regarding the Exchange Offer, Highland has determined that it does not have enough information to make an informed decision with respect to the Exchange Offer. Given the lack of information disclosed by the Company, coupled with the above stated omissions and misleading disclosures, Highland would currently be inclined not to exchange its Series A shares pursuant to the Exchange Offer.
I regret that the Board’s continued practice of rushing the decision-making process (a criticism I have raised time and time again) has yet again harmed the Company’s stockholders, in this case by producing inferior documentation containing misleading disclosures and yielded a coercive Exchange Offer. I regret that the other directors have elected to freeze me out of the Board’s decision-making process. Those decisions do not relieve the Company and the directors of their fiduciary duty to provide full, fair and accurate disclosures to the holders of Series A shares and the market as whole. I encourage the Company and the other directors to fulfill their duties and provide full, complete and accurate disclosures concerning the Company and the Exchange Offer and, in the future, to follow proper decision making procedures based on input from all directors elected by the stockholders.
Sincerely,
/s/ James D. Dondero
James D. Dondero
cc: Securities and Exchange Commission

 

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