| NEW YORK
NEW YORK May 27 LightSquared and its creditors,
including Dish Network Corp Chairman Charles Ergen,
will go into court-ordered mediation to settle on a plan to
restructure the bankrupt wireless venture, lawyers said on
Judge Shelley Chapman, who oversees LightSquared's
bankruptcy in New York, had given sides until Tuesday to forge a
consensual plan to get LightSquared out of Chapter 11, or else
mediate under Judge Robert Drain, a Chapman colleague who
presided over the 2012 bankruptcy of Hostess Brands.
At a hearing in Chapman's courtroom on Tuesday, Paul Basta,
a lawyer for an independent committee supervising the
LightSquared restructuring, said sides had made some progress on
a new deal but needed help getting "across the finish line."
It sought bankruptcy protection in 2012 after U.S.
regulators revoked its license to operate spectrum because of
concerns about interference with global positioning systems
LightSquared, owned by Phil Falcone's Harbinger Capital
Partners, sued Ergen, its largest creditor, saying he used
underhanded means to acquire his $1 billion debt stake and tried
to set the stage for a takeover by Dish.
The wireless venture had hoped to restructure under a plan
that would subordinate Ergen's debt, pushing it behind other
Chapman earlier this month rejected the plan as unfair to
Ergen, ruling that only a portion of his debt should be
subordinated. She ordered settlement talks and set Tuesday as a
deadline to avoid mediation.
Basta on Tuesday said sides have discussed a global
restructuring that would require new financing, but he gave no
detail about the deal or where the financing would come from.
LightSquared is surviving in bankruptcy through a loan
package that runs out on June 15, but a company lawyer on
Tuesday said it has enough cash to last it through the end of
June. It has asked lenders to extend the maturity and is waiting
on their consent, the lawyer, Matthew Barr, said.
LightSquared may need more bankruptcy loans if mediation
extends past June 30.
(Reporting by Nick Brown; Editing by Steve Orlofsky)