By Joseph Checkler
LightSquared wants its bankruptcy judge to delay a lawsuit
against Global Positioning System device-makers and industry groups
filed by company owner Harbinger Capital Partners, saying it wants
time to analyze whether it can go after the GPS industry, too.
In a Monday filing with U.S. Bankruptcy Court in Manhattan,
LightSquared said it wants the lawsuit delayed for 60 days so it
can focus on its bankruptcy case. Then it can begin deciding
whether it wants to join the lawsuit filed by Philip Falcone's
Harbinger, which says GPS makers and industry groups didn't
disclose information about possible interference issues regarding
LightSquared's network until it was too late, forcing the company
into Chapter 11.
"LightSquared believes that its claims against the GPS
Defendants are strong and meritorious and, if those claims are
prosecuted, they may yield a significant value for all of
LightSquared's stakeholders," the company's lawyers said in a
filing. Judge Shelley C. Chapman has scheduled an Oct. 7 hearing on
the matter. At a hearing in district court last week, a judge said
he would be fine slowing down the case if Judge Chapman decides to
grant LightSquared's request for the 60-day delay.
In August, Harbinger filed the suit against Deere & Co.
(DE), Garmin International Inc., Trimble Navigation Ltd. (TRMB),
the U.S. GPS Industry Council and the Coalition to Save Our GPS,
seeking $1.9 billion in damages. In the suit, Harbinger said it
worked for years to resolve any potential GPS conflicts for devices
using its spectrum, but the device makers and GPS groups hid that
their devices were also using the LightSquared network. The
defendants have all either denied wrongdoing or not responded to
requests for comment.
The GPS suit comes at a crucial time in LightSquared's
bankruptcy case. Judge Chapman earlier this week approved
procedures for an auction of LightSquared's spectrum assets, with a
$2.2 billion bid by a unit of Charles Ergen's Dish Network Corp.
(DISH) as the current lead offer. LightSquared is searching for
parties to compete with Dish's bid, and an auction is set for late
November. A group of creditors that owns more than $1.7 billion in
LightSquared's bank debt, including an investment vehicle
controlled by Mr. Ergen, supports the Dish bid.
LightSquared filed for bankruptcy protection in May 2012 after
the U.S. government said the company's network could interfere with
global-positioning systems, causing the Federal Communications
Commission to revoke LightSquared's license to use the wireless
spectrum.
That wireless spectrum remains valuable, and Mr. Falcone has
been committed to building a nationwide, high-speed network for
years with the goal of offering cheap cellphone and wireless
service for 260 million Americans. The FCC has done further testing
of LightSquared 's network and currently is considering whether to
approve the company's application to share some of the government's
spectrum and modify its licenses. Such an approval would allow
LightSquared to deploy some of its network quickly while it waits
for approval on other parts of it. The time-consuming approval
process, though, has forced LightSquared to explore a sale.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com)
Write to Joseph Checkler at joseph.checkler@wsj.com
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