WILIMINGTON, Delaware (Bloomberg) - ProtoStar Ltd., a bankrupt satellite operator providing digital television and broadband Internet in Asia, won permission to sell its two satellites at an October 14 auction.

US Bankruptcy Court Judge Mary Walrath granted approval of guidelines that would govern the sale of virtually all the assets of ProtoStar I Ltd. and ProtoStar II Ltd., the company's units. The assets include the two satellites and ground equipment, software and contracts needed to operate them, according to court papers.

ProtoStar, based in Hamilton, Bermuda, listed assets of $528 million and debt of $463 million, including units not in bankruptcy, as of December 31, in court documents filed in US Bankruptcy Court in Wilmington, Delaware. Formed in 2005, ProtoStar is owned by MHR Fund Management LLC, New Enterprise Associates and Vantage Point Venture Partners.

ProtoStar wants all bids submitted by October 8. The company had originally wanted to hold an auction on September 23 and all bids in by September 17. After negotiations with creditors the company agreed to delay all deadlines by three weeks. ProtoStar said it wants a hearing to approve the sale between October 19 and October 23.

The company asked the judge for permission to appoint a stalking horse, or lead bidder, for the assets. A stalking horse would increase bidding and "induce others to put real money on the table", ProtoStar lawyers argued at the hearing.

Ms Walrath said the proposal would be considered later.