| NEW YORK
NEW YORK Feb 4 A bankruptcy judge on Tuesday
approved a $33 million loan from a group that includes Dish
Network Corp Chairman Charles Ergen, to keep wireless
venture LightSquared afloat as it tries to hash out a bankruptcy
The deal, unveiled on Monday, was
green-lighted by Judge Shelley Chapman at a hearing in U.S.
Bankruptcy Court in Manhattan.
LightSquared's equity owner, Phil Falcone's Harbinger
Capital Partners, is fighting to keep control of the company in
a messy Chapter 11. An investment vehicle owned by Ergen has
bought up much of LightSquared's debt, while Dish offered and
later withdrew a $2.2 billion offer to purchase the company's
spectrum, an offer Harbinger did not accept.
LightSquared, which had been on pace to run out of cash by
March, needed a loan to be able to extend restructuring talks
that could go past that.
While LightSquared agreed to include the Ergen vehicle,
which is its largest single creditor, in the loan, the sides
remain at odds on the broader question of how LightSquared will
restructure. The company right now faces three competing
restructuring proposals - one backed by Harbinger and two others
put forth by creditor groups - but has said it plans to engage
creditors and work toward a consensual deal.
LightSquared has sued Ergen and Dish in a separate case
stemming from the bankruptcy, saying Ergen surreptitiously
bought up LightSquared debt to gain control of its capital
structure and effect a Dish takeover. A trial in that case is
expected to resume next week.
Other LightSquared creditors, as well, have expressed
frustration at some of the moves Ergen has made in the case. At
Tuesday's hearing, even as the sides presented a cooperative
loan, they sparred over legal fees - an issue Chapman decided to
leave for a later date.
LightSquared, which wants to build a massive wireless
network, filed for bankruptcy protection in May of 2012 after
the Federal Communications Commission revoked its spectrum
license. The FCC cited concerns that the proposed network could
interfere with GPS systems.
The case is In Re LightSquared Inc et al., U.S. Bankruptcy
Court, Southern District of New York, No. 12-12080.