Tags: LightSquared | Dish | bankruptcy | FCC

LightSquared Lenders Fight to Preserve Dish-Based Exit Plan

Wednesday, 22 Jan 2014 02:33 PM

A group of LightSquared Inc. lenders urged a judge to push forward a bankruptcy exit plan calling for Philip Falcone’s wireless venture to be purchased by a Dish Network Corp. affiliate, even though the entity says its bid is no longer on the table.

Lawyers for the lenders group, which holds debt in LightSquared unit LightSquared LP, argued to U.S. Bankruptcy Judge Shelley Chapman in Manhattan that the Dish entity shouldn’t be allowed to drop out of their plan.

A court order allowing the Dish affiliate, L-Band Acquisition LLC, to make a $2.22 billion bid for LightSquared was “totally clear that everything is irrevocable,” Glenn Kurtz, a lawyer for the lenders group, said in a hearing today.

The Dish affiliate “repudiated its agreement” to buy the assets, lawyers for the lenders said in a Jan. 20 court filing. The group wants to force the Dish entity to make good on its bid or to be allowed to pursue damages.

A lawyer for L-Band, Rachel Strickland, said the entity is “free to withdraw its bid at any time” and could “do that by handing them a Post-It note” notifying the lenders group of the termination.

LightSquared, controlled by Falcone’s Harbinger Capital Partners LLC, is seeking to exit bankruptcy through a separate plan supported by Fortress Investment Group LLC, JPMorgan Chase & Co. and Melody Capital Advisors LLC.

Ergen Purchases

Although the Dish affiliate said it wants to back out of the lenders’ bid, LightSquared has alleged that Dish Chairman Charlie Ergen secretly acquired $1 billion of its debt in an attempt to take over its spectrum.

Ergen contends he bought the debt as a personal investment and not for Dish. A trial taking place before Chapman over Ergen’s purchases may determine whether his claim for the $1 billion in debt will be disallowed.

LightSquared, based in Reston, Virginia, sought to establish a high-speed wireless network. The company filed for bankruptcy in May 2012 after the Federal Communications Commission blocked its initial proposal to use wireless spectrum, saying it might interfere with global-positioning system navigation equipment.

Complicating the company’s bid to exit bankruptcy, the FCC said last week that LightSquared’s plan may not be approved by the agency by the end of the year.

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A group of LightSquared Inc. lenders urged a judge to push forward a bankruptcy exit plan calling for Philip Falcone's wireless venture to be purchased by a Dish Network Corp. affiliate, even though the entity says its bid is no longer on the table.
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2014-33-22
Wednesday, 22 Jan 2014 02:33 PM
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