| NEW YORK
NEW YORK May 6 Creditors of hedge fund manager
Philip Falcone's telecom start-up LightSquared have agreed to
extend talks a second week, avoiding a default for now on about
$1.6 billion of debt, according to a source familiar with the
The person, who asked not to be named, said on Sunday that
talks could continue until May 14 as LightSquared's debt holders
had agreed to extend the deadline.
The person would not comment on specifics around the talks
between LightSquared and the creditors, which have been
negotiating to restructure LightSquared's 96 percent ownership
by Falcone's Harbinger Capital Partners.
Debt holders, including billionaire investor Carl Icahn and
hedge fund manager David Tepper, had initially threatened to
declare a default on the loan, which would have forced a
bankruptcy, if there was no agreement by April 30. Last week,
they extended that deadline until May 7.
A spokesman for Harbinger was not immediately available to
comment on the extension.
LightSquared's future was thrown into doubt in February
after the U.S. Federal Communications Commission said it would
revoke the start-up's permission to build a high-speed wireless
network because tests had shown that it would risk interfering
with Global Positioning Systems.
These systems support crucial services such as aviation
safety and military systems as well as devices used in
industries such as construction and agriculture.
LightSquared's fate has become an important concern for
investors in Falcone's $3.8 billion hedge fund, which has sunk
some 60 percent of its money into the telecom startup.
Last year, Harbinger posted a 47 percent decline in value,
largely because of a write-down on the value of the fund's