NEW YORK, July 1 (Reuters) - Bankrupt wireless venture LightSquared on Tuesday revealed a restructuring proposal that would cede 74 percent of its equity to a new investor group that includes JPMorgan Chase & Co, Cerberus Capital Management and Fortress Investment Group.
Phil Falcone’s Harbinger Capital Partners, which now controls LightSquared, would retain about 12 percent of the new equity, according to Joshua Sussberg, a lawyer for a committee overseeing LightSquared’s restructuring efforts. Sussberg was speaking at a hearing in U.S. Bankruptcy Court in Manhattan.
The investment group would supply $1.75 billion in new liquidity.
LightSquared’s largest creditor, Dish Network Corp Chairman Charles Ergen, would be repaid $470 million in cash and an unsecured note worth at least $492 million, said Sussberg, who is with Kirkland & Ellis. Ergen has not agreed to the plan.
LightSquared and Ergen have been bitter rivals throughout the bankruptcy. LightSquared has accused Ergen of surreptitiously buying up its debt in violation of a credit agreement that bars competitors like Dish from owning company debt. Ergen insisted the investment was personal.
LightSquared went bankrupt in 2012 after the Federal Communications Commission revoked its spectrum license amid fears its planned wireless network could interfere with GPS systems.
The latest restructuring is slated to go before Judge Shelley Chapman for approval sometime in August. (Reporting by Nick Brown in New York; editing by Tom Hals and Phil Berlowitz)