LightSquared burned through $81.4M in August, as bankruptcy proceedings churn on

Bankrupt wireless firm LightSquared burned through $81.4 million in August, and the company has now lost $1.6 billion since it filed for bankruptcy protection in May 2012. The losses are piling up as Philip Falcone and his Harbinger Capital Partners hedge fund struggle to maintain control of the firm as it seeks to exit bankruptcy.

According to the Wall Street Journal, citing a bankruptcy-court filing, the expenses the firm accrued in August were $30 million more than the company spent in July and were mostly attributed to a reuse fee it had to pay on its spectrum and a higher-than-usual charge for depreciation, depletion and amortization.

U.S. Bankruptcy Judge Shelley Chapman said last month that she would consider a date around Oct. 20 to weigh arguments over how to reorganize LightSquared. LightSqaured's latest reorganization plan would effectively cut out Falcone and Harbinger, at least from the company's "LP" unit, which controls LightSquared's larger swath of imperiled L-Band spectrum.

Under that plan, LightSquared's bank-debt holders would be paid in full and support the plan. But other creditors, including the largest holder of that bank debt, Dish Network (NASDAQ: DISH) Chairman Charlie Ergen, don't support the restructuring. Ergen would get debt and nonvoting shares as a result of his $900 million claim, if he accepts the plan. However, if he rejects the plan, how much debt he can get back would be subject to a trial over how much of his debt should be ranked lower than other claims.  

Meanwhile, Harbinger has filed its own plan and opposed LightSquared's plan. Harbinger has proposed a reorganization plan for a smaller piece of the company, the "Inc." assets, with financing from both Harbinger and a unit of J.P. Morgan Chase. LightSquared wants to restructure the two sets of assets together but has filed plans to restructure them separately in case that is what is ordered, according to the WSJ.

LightSquared entered bankruptcy protection in May 2012 after the FCC revoked its conditional license to operate because of unresolved concerns that LightSquared's planned LTE-based network in the L-band would interfere with GPS receivers.

For more:
- see this WSJ article (sub. req.)
- see this separate WSJ article (sub. req.)

Related Articles:
Falcone fights to keep control of LightSquared as bankruptcy maneuvering drags on
LightSquared settles debt dispute with Dish's Ergen
Dish, Ergen sued over LightSquared … again
LightSquared strikes new $3B restructuring deal, but Dish's Ergen looms as a stumbling block

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