| NEW YORK
NEW YORK Jan 31 LightSquared Inc and its
various creditors are in talks to devise a consensual plan to
restructure the wireless company's assets and end its
bankruptcy, the company told a judge on Friday.
LightSquared, owned by Phil Falcone's Harbinger Capital
Partners, is trying to bridge disagreements among proponents of
three separate reorganization proposals currently on the table,
according to Paul Basta, a lawyer for a special committee
overseeing the company's restructuring. The disclosure was made
during a hearing in U.S. Bankruptcy Court in New York.
The talks so far do not include representatives for Dish
Network Corp Chairman Charles Ergen, whose debt
holdings make him LightSquared's largest single creditor.
LightSquared has accused Ergen of surreptitiously buying the
debt to effect a takeover of LightSquared by Dish, a key
competitor. A trial on that dispute remains ongoing.
Ergen could be included in the talks down the line, Basta
said. Dish last year made a $2.2 billion bid for LightSquared's
valuable spectrum assets, but pulled the bid the morning the
trial began earlier this month.
LOAN HEARING ADJOURNED
The company on Friday was granted a postponement until
February 4 of an originally scheduled agenda item to discuss a
$33 million loan to help LightSquared survive during bankruptcy.
LightSquared attorney Matthew Barr said the final terms of the
so-called debtor-in-possession loan have not been reached.
LightSquared needs proceeds from such financing soon as the
company could run out of cash by March, according to its budget.
The injection of funds would enable it to run operations at
least through the end of the first quarter. As disclosed in
court filings, LightSquared expects the restructuring plan
confirmation process to extend into March.
Several competing proposals for DIP loan financing have been
made, including one from a Fortress Investment Group and a
subset of LightSquared secured lenders. Ergen has also offered
funding through an investment vehicle he controls, and a
proposed loan from Harbinger was newly disclosed at Friday's
Harbinger's loans would be structured as a junior loan to
avoid a fight with senior LightSquared lenders over collateral
claims, as Harbinger's bankruptcy claims rank junior to those of
the secured group. A senior loan from Harbinger would have
elevated its claims above those of other lenders.
The case is In re: LightSquared Inc, U.S. Bankruptcy Court,
Southern District of New York, No. 12-12080.