LightSquared prospects look dim as bankruptcy deadline looms

14 May 2012

LightSquared, the ill-fated USD7 billion open-access Long Term Evolution (LTE) spearheaded by hedge-fund manager Philip Falcone, is teetering on the brink of bankruptcy, the Wall Street Journal (WSJ) reports, after talks with the start-ups lenders faltered. The parties reportedly have until 5pm Eastern Standard Time today to prevent LightSquared from sliding into Chapter 11 bankruptcy, although Falcone and the potential lenders remain poles apart. According to the financial daily, Falcone, whose Harbinger Capital Partners hedge-fund is LightSquared’s main backer, has been unable to agree terms with the lenders on how to cede his ownership stake in the wireless venture to them. A person close to the deal told the WSJ that the lenders are ‘asking for conditions they know Harbinger and Phil cannot agree to’. While Falcone continues to seek the middle ground, he has privately conceded that the odds of a deal look increasingly slim.

As previously reported by TeleGeography’s CommsUpdate, in February this year the Federal Communications Commission (FCC) declared that LightSquared’s use of non-traditional spectrum in the 1.4GHz and 1.6GHz bands interfered with GPS satellite navigation devices and aircraft flight safety equipment. Subsequent months have seen the stricken company beset with myriad financial and legal problems.

United States, Ligado Networks (formerly LightSquared)