scc Doc 709 Filed 05/12/15 Entered 05/12/15 20:31:35 Main Document Pg 1 of 5

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1 Pg 1 of 5 AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, New York (212) (Telephone) (212) (Facsimile) Daniel H. Golden David M. Zensky Deborah Newman Counsel to Aurelius Capital Management, LP UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK X In re Chapter 11 NII Holdings, Inc., et al., Case No (SCC) Debtors. 1 (Jointly Administered) X JOINDER OF AURELIUS CAPITAL MANAGEMENT TO (I) EMERGENCY MOTION OF THE DEBTORS AND DEBTORS IN POSSESSION TO STRIKE OR, IN THE ALTERNATIVE, ADJOURN THE LIMITED OBJECTIONS OF THE AD HOC GROUP OF NII CAPITAL 2021 NOTEHOLDERS SEEKING TO DISALLOW AND EXPUNGE CERTAIN CLAIMS, AND (II) STATEMENT OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS IN SUPPORT OF THE EMERGENCY MOTION 1 The Debtors in the jointly administered bankruptcy cases are comprised of the following fourteen entities (the last four digits of their respective U.S. taxpayer identification numbers follow in parentheses) NII Holdings, Inc. (1412); Nextel International (Services), Ltd. (6566); NII Capital Corp. (6843); NII Aviation, Inc. (6551); NII Funding Corp. (6265); NII Global Holdings, Inc. (1283); NII International Telecom S.C.A. (7498); NII International Holdings S.à r.l. (N/A); NII International Services S.à r.l. (6081); Airfone Holdings, LLC (1746); Nextel International (Uruguay), LLC (5939); McCaw International (Brazil), LLC (1850); NII Mercosur, LLC (4079); and NIU Holdings LLC (5902). The location of the Debtors' corporate headquarters and the Debtors' service address is 1875 Explorer Street, Suite 800, Reston, VA

2 Pg 2 of 5 Aurelius Capital Management, LP ( Aurelius ), on behalf of its managed entities, hereby files this joinder to (a) the Emergency Motion ( Motion ) 2 of the Debtors and Debtors in Possession to strike the (i) Limited Objection of the Ad Hoc Group of NII Capital 2021 Noteholders' [sic] Seeking to Disallow and Expunge Certain Claims Filed by the Indenture Trustee of the 8.875% Capco Notes [Docket No. 685] and (ii) Limited Objection of the Ad Hoc Group of NII Capital 2021 Noteholders [sic] Seeking to Disallow and Expunge Certain Claims Filed by the Indenture Trustee of the 10% Capco Notes [Docket No. 686] (together, the Claims Objections ), or, in the alternative, adjourn the hearing on the Claims Objections until after the Confirmation Hearing, and (b) the Statement (the Statement ) of the Official Committee of Unsecured Creditors (the Committee ) in Support of the Motion. 1. Aurelius agrees with the Debtors and the Committee that the merits of the Claims Objections should not be heard now, and that the Claims Objections should be stricken, or, at minimum, adjourned pending this Court s adjudication of the Plan. As the Debtors and the Committee explain in the Motion and Statement, respectively, the very purpose of the Global Settlement is to avoid the cost, time, and uncertainty attendant to litigating the Transferred Guarantor Claims and the myriad other disputes that are resolved by the Global Settlement. Adjudicating the merits of the Transferred Guarantor Claims now would derail a carefully negotiated settlement that has been over a year in the making, at substantial cost to the Estates. Moreover, because the settlement of the Transferred Guarantor Claims was just one part of a larger integrated settlement involving the interdependent resolution of a wide range of potential claims against the Estates, the Claims Objections threaten not just the settlement of the Transferred Guarantor Claims, but the entire Plan. Should the Global Settlement fail, it is likely 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion or the Claims Objections, as applicable.

3 Pg 3 of 5 that most if not all of the claims that would otherwise be resolved by the Plan would instead need to be litigated. The law simply does not permit the Ad Hoc Group s eleventh-hour attempt to circumvent Section 1129 of the Bankruptcy Code and Bankruptcy Rule 9019, and squander the hard-fought efforts of the Debtors, the Committee, and the majority of the Debtors creditors that have now resulted in a near-universal consensus in these cases. 2. Without unnecessarily wading into the merits of the Claims Objections, the Court should be aware that there are meritorious arguments that would lay bare the frivolity of the arguments asserted therein. In short, the Claims Objections are premised on the argument that when the holders of unregistered, transfer-restricted notes exchange those notes for registered, freely-tradeable notes in a registered exchange offer, they unwittingly waive their rights to sue the issuer for breaches of the indenture governing the notes regardless of whether the noteholders are aware of any such breaches at the time of the exchange. This argument, if accepted, would send shock waves through the debt markets, and turn the purpose of a privateto-public exchange on its head. The sole purpose of such an exchange is to benefit noteholders by providing them with notes that can be freely sold, unrestricted by the registration and prospectus delivery provisions of the Securities Act of It is not intended to and does not alter exchanging noteholders legal rights in any other manner. 3. The language in the Letters of Transmittal seized upon by the Ad Hoc Group which provides that exchanging noteholders transferred all right, title and interest in and to the old notes does not demonstrate otherwise. This language is intended only to ensure that the issuer can cancel the old notes before issuing the new ones, to avoid having duplicate debt outstanding in violation of the governing indenture. The Registration Rights Agreements that required Capco to conduct the Exchange make clear, however, that the new and old notes are - 3 -

4 Pg 4 of 5 identical, but for the transfer restrictions, and penalties that could result from CapCo s failure to consummate the Exchange. Specifically, the Registration Rights Agreements define the new notes as debt securities of the Company and the related guarantees of the Guarantors as provided for in the Indenture identical in all material respects to the [old notes] (except that the Additional Interest provisions and transfer restrictions shall be eliminated) to be issued under the Indenture. NII Holdings, Inc., Current Report (Form 8-K) (Dec. 9, 2009), Ex. 4.2 at 2 (emphasis added) 3 ; NII Holdings, Inc., Current Report (Form 8-K) (Aug. 18, 2009), Ex. 4.2 at 2 (emphasis added). 4 The Registration Rights Agreements further demonstrate that the Exchange Offer was intended to benefit noteholders, stating that CapCo and the other entities guaranteeing the notes entered into the agreement to induce the initial purchasers of the old notes to purchase them, and for the benefit [of the initial purchasers of the old notes] and the benefit of the holders from time to time of the [old and new notes]. Id. at In addition, the Ad Hoc Group does not have standing to assert the Claims Objections, given that its members are not creditors of the Transferred Guarantors, but are instead creditors of the Transferred Guarantors indirect parent several steps up in the corporate ownership chain. Indeed, no member of the Ad Hoc Group or the Indenture Trustee for the Capco 7.625% Notes filed a proof of claim against the Transferred Guarantors, nor did the Indenture Trustee for the Capco 7.625% Notes articulate the Transferred Guarantor Claims in the proofs of claims that it filed against CapCo or the other Debtor entities at which it filed proofs of claim. Both the Second Circuit and this Court have previously held that such an attenuated interest as that held by the Ad Hoc Group members in the Transferred Guarantors is insufficient to confer standing to be heard in a debtor s bankruptcy case. See, e.g., In re Refco 3 Available at http// 4 Available at https//

5 Pg 5 of 5 Inc., 505 F.3d 109, (2d Cir. 2007); In re Innkeepers USA Trust, 448 B.R. 131, 144 (Bankr. S.D.N.Y. 2011). 5. In light of the procedural impropriety of the Claims Objections, Aurelius will refrain at this time from providing a more substantive response thereto (including by refraining from addressing the wholly inapposite case law cited therein), but reserves all of its rights to do so should the Court order that the Claims Objections be litigated now. WHEREFORE, Aurelius requests that the Court enter an order substantially in the form attached as Exhibit A to the Debtors Motion, and grant such other and further relief as is just. Dated May 12, 2015 New York, New York AKIN GUMP STRAUSS HAUER & FELD LLP /s/ David M. Zensky Daniel H. Golden David M. Zensky Deborah Newman One Bryant Park New York, New York (212) (Telephone) (212) (Facsimile) Counsel to Aurelius Capital Management, LP - 5 -