LightSquared in negotiations with creditors to avert liquidation

LightSquared is currently negotiating with its creditors in order to prevent a liquidation of its assets, according to multiple reports of the company's bankruptcy proceedings.

According to reports from Bloomberg and Dow Jones Newswires, LightSquared has reached an agreement with one group of creditors but is still in negotiations with another group.

Matthew Barr, a lawyer for LightSquared, said the company scored a debtor-in-possession loan from a unit of U.S. Bancorp (USB), which holds more than $320 million in loans that are secured by LightSquared's assets. However, LightSquared is still in discussions with an ad-hoc group of hedge funds holding more than $1 billion in debt secured by LightSquared's assets. That group wants a bankruptcy judge to place restrictions on how LightSquared uses its remaining $190 million in cash.

The issue reportedly is set to be discussed today in bankruptcy court.

LightSquared filed for Chapter 11 bankruptcy protection last month. Harbinger Capital Partners, headed by Philip Falcone, sunk more than $3 billion into LightSquared with the intention of building a wholesale LTE network. But the FCC in February revoked a conditional waiver for LightSquared to build a wholesale LTE network due to GPS interference concerns related to the 1.6 GHz L-band spectrum that LightSquared intended to employ. LightSquared has since been battling to stay afloat.

LightSquared has said it intends to fight the FCC's ruling. The company is also attempting to gain FCC approval for a spectrum exchange that would allow it to launch services on radio waves that do not interfere with GPS functions.

For more:
- see this Bloomberg article
- see this Dow Jones Newswires article

Related Articles:
LightSquared files for Chapter 11 bankruptcy protection
LightSquared to pay Inmarsat $56.3M, delays further payments until 2014
Lawmakers press FCC to give LightSquared new spectrum
LightSquared to FCC: 'We are not going away'

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