By Joseph Checkler
LightSquared filed a new restructuring plan that would put the
company in the hands of current owner Philip Falcone and his
Harbinger Capital Partners hedge-fund firm, as well as investment
firms Fortress Investment Group LLC and Centerbridge Partners
LP.
The proposal, filed early Thursday morning with U.S. Bankruptcy
Court in Manhattan, marks a dramatic reversal from the last plan
LightSquared filed with the court. That plan would have wiped out
Mr. Falcone's stake and given a majority of the equity to Dish
Network Corp. Chairman Charlie Ergen, the wireless venture's
biggest creditor.
This one would pay off Mr. Ergen, who is owed more than $1
billion through his SPSO investment vehicle, with a five-year note.
A group of investors owning about $1 billion in LightSquared's bank
debt would also be paid off via a note.
In court Thursday, LightSquared and the bankruptcy judge,
Shelley C. Chapman, overseeing the case thanked Judge Robert Drain
for mediating the agreement.
While Harbinger would be the largest shareholder of the new
LightSquared, it wouldn't have any representation on the board of
director. Harbinger also agreed to drop its various lawsuits
against several entities, including Mr. Ergen, the U.S. government
and the GPS industry. LightSquared will also drop its litigation
against Mr. Ergen for his purchase of the company's debt.
Write to Joseph Checkler at joseph.checkler@wsj.com
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