In re: Fort Wayne Telsat, Inc., No. 11-2112 (7th Cir. 2011)
Annotate this CaseIndiana University had an Instructional Television Fixed Service license, issued by the FCC, that authorized broadcast on specified frequencies. A not-for-profit ITFS licensee can lease unused frequencies to a for-profit entity. The university was contemplating assigning frequencies to PBS, but before it did, PBS quitclaimed its rights to the debtor. Thinking that the transfer was final, debtor modified equipment at a cost of $350,000. The bankruptcy trustee filed a claim against the university, contending that it had promised PBS the license, that debtor had reasonably relied on the promise, and that the doctrine of promissory estoppel entitled debtor to damages of $116,000. The claim settled for $100,000. Because the settlement left the estate with insufficient assets to pay unsecured creditors, a creditor challenged it. The bankruptcy court, district court, and Seventh Circuit affirmed. The trustee decided that pursuing a claim for the license was hopeless and made a reasonable decision.
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