DBSD North America's bankruptcy saga was extended once again, as a judge postponed a hearing on a $1.1 billion bid for the company as it considers a rival bid.

DISH Network Corp. had proposed a $1.1 billion deal to buy DBSD, a satellite communications company which has been in bankruptcy proceedings since May of 2009. Judge Robert E. Gerber rejected DBSD's request to move forward with the proposal at a hearing Wednesday in New York State Bankruptcy Court.

Other bond holders, represented by Solus Alternative Asset Management and Harbinger Capital Partners, two hedge funds, said they had an alternative bid and filed a term sheet with the court. In court papers, Stephen J. Blauner, a managing director at Solus, said he had sent the term sheet to DBSD on Feb. 28, but the company had said to the court that there were no serious expressions of interest since the last hearing on Feb. 7.

Solus' offer says it is willing to put in $90 million to repay creditors. DBSD's other debts will also be paid in full, the letter says. An additional $123.9 million will go to repaying the creditors of TerreStar, another satellite communications company in bankruptcy proceedings. Much of TerreStar's debt is held by EchoStar, a sister company to DISH. The offer letter seems to contemplate combining the two companies, though Blauner says in his filing that combining the two companies isn't a necessary condition for a deal.

DISH has said it is willing to provide an $87.5 million loan to DBSD to keep it operating. DISH owns $40 million in first lien loans. Another $111 million of the 7.5% notes is owned by Chesapeake Capital Advisors, a hedge fund that has signed the filings in support of DISH.

DISH and the hedge funds aren't the only parties fighting over the ultimate fate of DBSD. Sprint says it is owed $200 million in costs for clearing out the spectrum that was originally sold to DBSD. The current bankruptcy plans call for Sprint to get about half of that, $104 million. Sprint has filed an objection to both DISH's bid and the plan put forward by Solus.

The bankruptcy plan has also had to go through several iterations. Originally one was hammered out that called for creditors to take 95% of the equity of a reorganized DBSD in exchange for their notes, while DISH would have retained the $40 million in loans under new terms. But that plan was appealed and the Second Circuit Appeals Court overturned it.

DBSD is developing a satellite constellation coupled with a terrestrial network that would provide voice and data services.

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