(Reuters) - A federal appeals court on Monday upheld a decision rejecting claims of fraud by Harbinger Capital Partners, the equity owner of bankrupt wireless venture LightSquared, against Deere & Co and other GPS firms.
Hedge fund Harbinger had accused Deere, Garmin International, Trimble Navigation Ltd, and a GPS industry group of misleading LightSquared about interference concerns and hastening the wireless spectrum’s plunge into bankruptcy.
But the 2nd U.S. Circuit Court of Appeals in New York affirmed a ruling by the Manhattan federal court in February, saying Harbinger’s arguments were “without merit.”
LightSquared has separately brought claims against the parties, which are currently being litigated in the Southern District of New York.
While the 2nd Circuit decision is a blow for Harbinger, it comes just three days after the Federal Communications Commission (FCC) approved LightSquared’s request to transfer its valuable wireless spectrum into a newly-formed company.
The FCC green light means that LightSquared will likely emerge from its bitter bankruptcy by the end of the year.
LightSquared filed for bankruptcy in 2012 after the FCC revoked its license to build a planned wireless network over fears it could interfere with GPS systems.
The bankruptcy has been closely watched in the restructuring world after several failed reorganization attempts amid ongoing acrimony between the company and its creditors.
Following the FCC’s approval on Friday, LightSquared said it will soon notify U.S. Bankruptcy Judge Shelley Chapman when its confirmed restructuring plan will go into effect, allowing the official exit from its 3-1/2-year bankruptcy.
LightSquared’s new management team includes Chairman Ivan Seidenberg, former chairman and chief executive officer of Verizon Communications, and former FCC Chairman Reed Hundt.
The new team does not include Phil Falcone, the head of Harbinger, which was forced to give up much of its equity and all of its operational control of LightSquared under the Chapter 11 restructuring plan.
(This version of the story was corrected throughout to show that the ruling only affects Harbinger)
Reporting by Tracy Rucinski; Editing by Noeleen Walder and Tom Brown
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