Dec 26 U.S. wireless communications company
LightSquared proposed exiting bankruptcy with financing from
$2.75 billion in fresh loans and an equity investment of at
least $1.25 billion, according to court documents.
The plan is backed by Fortress Investment Group,
Melody Capital Advisors, JPMorgan Chase & Co and
Harbinger Capital Partners, according to papers filed in
Manhattan's U.S. Bankruptcy Court on Tuesday. Harbinger is
Philip Falcone's hedge fund and LightSquared's controlling
The proposal replaces a previous plan based on an auction of
the company's assets. LightSquared scrapped the auction after it
did not receive any qualified bids to compete with a $2.2
billion bid led by Charlie Ergen, the chairman of rival Dish
Under the plan, Fortress, Melody and Harbinger are providing
the new equity investment.
The latest proposal is conditioned on approval of
LightSquared's license application by the Federal Communications
The company proposed borrowing at least $285 million from
Melody Capital Advisors LLC to cover the period between court's
approval of its proposed plan, which could come as soon as
January, and FCC license approval, which could take many months.
LightSquared filed for bankruptcy last year after the FCC
blocked its plan for a 4G LTE terrestrial wireless network
because the regulator feared it would interfere with GPS
In November, LightSquared sued GPS industry leaders
including Garmin International Inc for reneging on
representations to LightSquared that its network would not
interfere with global positioning systems devices.
U.S. Bankruptcy Court Judge Shelley Chapman ordered a
hearing on LightSquared's motion to modify its reorganization
plan for 10 a.m. EST Monday.
LightSquared argued it should be allowed to implement the
new plan without going back to creditors to get their approval
because the latest deal increases the recovery for creditors.
A hearing to confirm LightSquared's proposed plan is
scheduled for Jan. 9.
The plan estimated the company's assets would be worth $8.4
billion, assuming an effective date of Sept. 30 and FCC approval
for the company's license.
The case is In re: LightSquared Inc, U.S. Bankruptcy Court,
Southern District of New York, No. 12-12080.