(Adds liquidity details, background and quotes throughout from Tuesday's court hearing)
By Nick Brown
NEW YORK, July 1 (Reuters) - Bankrupt wireless venture LightSquared on Tuesday revealed a new restructuring proposal that would cede 74 percent of its equity to a new investor group that includes JPMorgan Chase & Co, Cerberus Capital Management and Fortress Investment Group.
Phil Falcone's Harbinger Capital Partners, which now controls LightSquared, would retain about 12.5 percent of the new equity, according to Joshua Sussberg, a lawyer for a committee overseeing LightSquared's restructuring efforts. Sussberg was speaking at a hearing in U.S. Bankruptcy Court in Manhattan.
JPMorgan, Cerberus and Fortress would supply $1.45 billion in new liquidity, with other investors in the group chipping in another $300 million. Existing lenders with around $1 billion in debt would be repaid in cash.
LightSquared's largest creditor, Dish Network Corp Chairman Charles Ergen, would be paid back with $470 million in cash and an unsecured note worth at least $492 million, said Sussberg, who is with Kirkland & Ellis.
Ergen has not agreed to the plan, and while his lawyer, Rachel Strickland, said she is willing to keep discussing a possible compromise, she is also preparing for a fight. On Tuesday, Strickland called for a full-fledged trial on the plan's fairness.
LightSquared and Ergen have been bitter rivals throughout the bankruptcy. LightSquared has accused Ergen of surreptitiously buying up its debt in violation of a credit agreement that bars competitors like Dish from owning company debt. Ergen insisted the investment was personal.
LightSquared went bankrupt in 2012 after the Federal Communications Commission revoked its spectrum license because of fears that its planned wireless network could interfere with GPS systems.
The patience of Judge Shelley Chapman, overseeing the case, has worn thin as the bankruptcy reaches its 26th month and gears up for what could be a second major trial, tentatively scheduled for late August.
In the first weeks-long trial over whether Ergen used underhanded means to acquire his LightSquared debt, the judge found no heroes. In her May ruling, she rejected LightSquared's proposed restructuring but blamed both sides for their inability to compromise.
Chapman sent both sides to mediation under fellow U.S. Bankruptcy Judge Robert Drain. In a report last week, Drain said Ergen "wasted the parties'...time," refusing to negotiate in good faith and leaving one of the sessions without Drain's permission.
LightSquared and its other creditors now have a new plan they like. But on Tuesday, Ergen's camp demanded another lengthy two-phase trial that examines both the plan's overall legality and the appropriateness of how it treats Ergen's debt.
Chapman chided Strickland, Ergen's lawyer, over perceived delay tactics, saying "delay is not this case's friend, but delay is something that can be utilized by your client at this point."
Ergen "is not looking for delay," Strickland said. "My client is looking for his day in court." (Reporting by Nick Brown in New York; Editing by Tom Hals, Phil Berlowitz and Jan Paschal)