By Joseph Checkler
LightSquared lost $68.1 million during November, bringing the
wireless venture's total losses since its 2012 bankruptcy filing to
$1.8 billion.
In a monthly operating report filed with U.S. Bankruptcy Court
in Manhattan, the company again attributed a bulk of the loss to
interest paid on its debt. During the month, that expense was $40.8
million. It is $1.06 billion since the start of the bankruptcy
case.
The company, controlled for years by Philip Falcone through his
Harbinger Capital Partners hedge-fund firm, is pursuing a
reorganization plan that would take control of the company away
from Harbinger and give it to Dish Network Corp. Chairman Charlie
Ergen. However, as The Wall Street Journal reported last month, Mr.
Falcone has been in talks with investors on an alternative
restructuring proposal--one in which Mr. Falcone would still own
part of LightSquared. Any rival plan would surely delay
LightSquared's emergence from bankruptcy even more, sending the
already high pile of bills higher.
For instance, LightSquared paid $4.6 million in professional
fees during November, bringing that total to $125.7 million since
the beginning of the case.
Other expenses include $1.1 million paid toward salaries,
commissions and fees, which total $135.2 million since the
beginning of the case. The company also paid a $6 million spectrum
reuse fee and has put $61.6 million toward such fees since the May
2012 Chapter 11 filing.
LightSquared has scheduled a Thursday hearing to update its
bankruptcy judge, Shelley C. Chapman, on its case. A rival plan, by
Mr. Falcone or others, hasn't been filed with the court.
The only plan up for consideration is the one that would give
control to Mr. Ergen, LightSquared's largest lender. The deal would
pay off a group of bank lenders, whose roughly $1 billion in debt
would be satisfied in debt. Their loans are the ones subject to the
whopping interest payments LightSquared has shelled out in the
case.
LightSquared filed for Chapter 11 in May 2012, shortly after
federal regulators refused to clear LightSquared's plans to launch
its wireless network. Those regulators heeded warnings from the
global positioning systems industry that the network could
interfere with GPS.
LightSquared isn't able to fully use spectrum--limited pockets
of airwaves that mobile-phone and Internet companies use--that it
owns without support from the Federal Communications Commission.
The FCC has so far refused to grant such approval.
Meanwhile, LightSquared's case has gone through many
machinations, some involving Mr. Falcone and some not. He and other
Harbinger officials have resigned from the company's board of
directors, although Harbinger still owns some debt in a smaller
piece of the company.
As Mr. Falcone's grip on LightSquared loosened, he sued the
entities he feels are responsible for his $2 billion or so in
losses on the investment. Those parties include Dish, Mr. Ergen,
the U.S. government and the global-positioning systems companies
that have warned LightSquared's network--which Mr. Falcone hoped
would someday provide low-cost mobile services to hundreds of
millions of Americans--could interfere with GPS.
All of those parties have denied any wrongdoing.
Write to Joseph Checkler at joseph.checkler@wsj.com
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