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LightSquared Inc. Won Approval to Marginalize $1 Billion Debt Claim by Dish Network View Count: 139
Philip Falcone’s LightSquared Inc. won approval for the disclosure statement of its reorganization plan. According to Reuters, Dish Network Corp Chairman Charles Ergen, the largest creditor of bankrupt wireless company LightSquared, said that he believes LightSquared Inc. could be worth as much as $8.9 billion if it gained regulatory approval of its planned wireless network. LightSquared, owned by Phil Falcone’s Harbinger Capital Partners, went bankrupt in 2012. Charles Ergen then acquired about $1 billion of the company’s senior loan debt, giving him a controlling stake in LightSquared’s capital structure.
LightSquared is a company that seeks to develop a wholesale 4G LTE wireless broadband communications network integrated with satellite coverage across the United States using a block of frequencies located near the band used by the Global Positioning System. Bloomberg News has reported that LightSquared Inc. accused Charles Ergen, 61, of secretly snapping up debt in the company to hijack its reorganization and get its airwaves at a discount. According to The Street, Counsel to Ergen, Rachel Strickland of Willkie Farr & Gallagher, called the plan “as brazen an attempt to marginalize a party as I have ever seen,” during the court hearing.
According to Bloomberg News, U.S. Bankruptcy Judge Shelley Chapman said at a hearing in Manhattan that as she prepared to rule on LightSquared’s plan to reorganize $2.5 billion in financing backed by Fortress Investment Group LLC, JPMorgan Chase & Co. and Melody Capital Advisors LLC., that Charles Ergen’s claim will be put behind other creditors by an amount to be determined after further proceedings.
Image credit: www.talkandroid.comLightSquared Inc. Won Approval to Marginalize $1 Billion Debt Claim by Dish Network by Jaan