By Joseph Checkler
LightSquared on Friday filed a lawsuit against Global
Positioning System makers and industry groups, saying their failure
to disclose that LightSquared's network could cause GPS problems
drove the company into bankruptcy.
In a Friday complaint filed with U.S. Bankruptcy Court in
Manhattan, LightSquared said Deere & Co. (DE), Garmin
International Inc. and Trimble Navigation Ltd. (TRMB), as well as
two GPS industry groups, caused "untold damage" to the company
after it spent billions of dollars to build up its network.
"The Defendants engaged in a calculated effort to block the
deployment of a new wireless broadband network that would serve
millions of underserved consumers at lower prices while increasing
competition and innovation in the wireless industry," LightSquared
said in the filing. The company wants a jury trial in U.S.
Bankruptcy Court.
Representatives from Deere, Garmin and Trimble didn't
immediately respond to requests for comment. A spokesman for the
two industry groups named in the complaint, the U.S. GPS Industry
Council and the Coalition to Save Our GPS, didn't immediately
respond to a request for comment.
Philip Falcone's Harbinger Capital Partners, which owns
LightSquared, in August filed a suit against the same parties, in
U.S. District Court in Manhattan, 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. They all denied wrongdoing or did not
respond to requests for comment on the Harbinger suit.
Since that suit was filed, LightSquared said it needed time to
focus on its Chapter 11 case before deciding whether to join in. A
judge last month gave the company 60 days to delay a decision on
whether to sue, but just 23 days later, it filed the suit in
bankruptcy court anyway. LightSquared doesn't seek a specific
amount in damages, and some of its arguments are slightly different
from Harbinger's.
LightSquared is currently auctioning off its wireless spectrum
business, with a $2.2 billion bid by Charlie Ergen's Dish Network
Corp. (DISH) serving as the lead bid for the largest swath of
spectrum. LightSquared is trying to find other bidders for its
assets, but all along has said it believes the company would be
more valuable if its network got regulatory approval to
operate.
"The unfortunate reality is that this company unnecessarily lost
billions of dollars, and this lawsuit provides for interested
bidders the factual background between LightSquared and the GPS
industry, a deeper understanding of the alleged abuses that led to
the filing of these Chapter 11 Cases and the value of losses and
damages," LightSquared Chairman and Chief Executive said in a
statement emailed to The Wall Street Journal.
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. 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.
Mr. Falcone wants the company to wait for FCC approval of
LightSquared's network, saying the company is worth far more than
what Dish bid.
(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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