LightSquared wants to see the benefits of a potential FCC decision to rejigger its spectrum holdings, and Philip Falcone's Harbinger Capital Partners is continuing to fend off an attempt by Dish Network (NASDAQ: DISH) to take control of LightSquared.
"All LightSquared entities should be permitted to reorganize and enjoy the significant value realized when the FCC grants LightSquared's pending applications," LightSquared said in a filing Thursday in Manhattan bankruptcy court, according to Bloomberg. During the company's Dec. 30 court hearing, its lawyers discussed the company's recent talks with the FCC behind closed doors in U.S. Bankruptcy Judge Shelley Chapman's chambers.
LightSquared is still in bankruptcy protection, but has recently put forward a plan by Fortress Investment Group, JPMorgan Chase & Co. and Melody Capital Advisors to get LightSquared out of bankruptcy. That standalone plan, put forward late last month, includes a $2.5 billion exit loan and at least $1.25 billion in new equity. Falcone and Harbinger, which controls LightSquared's equity, are backing the new plan.
The new LightSquared plan, which is conditioned on approval from the FCC for LightSquared to modify its spectrum holdings, is competing with a plan put forward by Dish to acquire LightSquared's spectrum for $2.2 billion. Dish's plan does not have conditions.
A hearing on the competing plans is set to begin Jan. 9, according to Bloomberg. Later in January, LightSquared will argue to Judge Chapman that its new Fortress-led plan is actually better than the Dish plan, according to Dow Jones Business News. The judge will then decide between the two proposals.
At the heart of the matter is a battle over LightSquared's L-Band spectrum, which Dish is seeking to acquire to enhance its spectrum holdings. LightSquared entered bankruptcy protection in May 2012 after the FCC revoked its conditional license to operate because of unresolved concerns that its planned LTE-based network would interfere with GPS receivers.
Dish's bid was filed by a group of LightSquared lenders that are owed nearly $2 billion. LightSquared is pursuing a lawsuit against Dish Chairman Charlie Ergen over his acquisition of LightSquared debt. LightSquared argues that Ergen bought the beleaguered company's debt on behalf of Dish and not himself. Such purchases are illegal under LightSquared's credit agreement, which prohibits competitors from buying the debt, the company has said.
- see this Bloomberg article
- see this Dow Jones Business News article
- see this separate Bloomberg article
- see this Reuters article
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