By Joseph Checkler NEW YORK--LightSquared on Monday said it has reached an agreement in principle on a bankruptcy loan from a group of its lenders, as the wireless satellite company's fight with another group of lenders over whether it can use the cash secured by the loans continues. Judge Shelley C. Chapman of U.S. Bankruptcy Court in Manhattan said LightSquared should take until Tuesday morning to negotiate with an ad hoc group of hedge funds holding more than $1 billion in debt secured by LightSquared's assets; the funds want severe restrictions placed on LightSquared's proposed use of the $190 million of cash it has on hand. Meanwhile, Milbank, Tweed, Hadley & McCloy LLP's Matthew S. Barr, a lawyer for LightSquared, said the company expects to file within a few days details of the debtor-in-possession loan it negotiated with a unit of U.S. Bancorp (USB), which represents a separate group of LightSquared's prebankruptcy lenders. That group holds more than $320 million in loans that are secured by the company's leases on wireless spectrum and equity interest in that spectrum. Mr. Barr didn't give details of the new debtor-in-possession loan in court, and a lawyer for U.S. Bank didn't immediately respond to a request for comment. Judge Chapman was set to decide whether LightSquared could use the $190 million to keep itself afloat during its bankruptcy, money without which the company said it probably would be forced to liquidate. But the judge called lawyers for the company and the lenders into her chambers, where they emerged apparently in agreement that discussions would continue outside the courtroom, with a hearing scheduled for Tuesday. Mr. Barr said all objections aside from those of the ad hoc group had been satisfied. The ad hoc group of lenders wants LightSquared to propose a strict monthly budget of how the cash would be used, give the lenders liens on LightSquared's assets, and pay the legal fees of the lenders and monthly interest on the loans. In addition, the lenders want the ability to ask the bankruptcy court to investigate whether it can pursue claims against Phil Falcone and his hedge-fund firm, Harbinger Capital Partners, which controls the company's equity. The lender group holds $1.1 billion of a $1.7 billion chunk of debt secured by LightSquared's assets and includes hedge-fund managers Appaloosa Management LP, Fortress Investment Group LLC (FIG) and Silver Point Capital LP. Judge Chapman on Monday also approved payments from LightSquared's bankruptcy estate to the professionals working on its Chapter 11 case, after the company satisfied objections of creditors worried that the company wouldn't have to come back to court to approve more payments if objections are made. "Fees aren't final until they're final," Judge Chapman said. She also approved some of the company's so-called "second-day" motions, including giving it the right to keep paying its employees and paying utility bills. LightSquared's stated goal of building a wireless broadband network that could provide satellite cellphone service to 260 million Americans by the end of 2015 got thrown into disarray when the Federal Communications Commission said the network would interfere with global-positioning systems. Already saddled with lots of debt, the company succumbed, filing for bankruptcy last month. Falcone and Harbinger own most of LightSquared's stock, having invested billions of dollars into a venture that sought to compete with communications heavyweights such as AT&T Inc. (T) and Verizon Wireless. But efforts to build a national network stalled as the FCC began to raise its issues. The company plans to use the breathing room of Chapter 11 to resolve these regulatory issues, address its more than $2 billion debt load and raise new capital to build out its network. (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 [email protected] Follow him on Twitter at @JoeCheckler.