Bankrupt wireless company LightSquared Inc. has proposed a new restructuring plan that would remove certain regulatory hurdles to its exit from chapter 11 while potentially subordinating the bankruptcy claim held by its largest creditor, an entity run by Dish Network Corp Chairman Charles Ergen, Reuters reported on Saturday. In court papers filed late on Friday night, LightSquared outlined a restructuring plan fueled by $2.35 billion in new financing from Fortress Investment Group and others, which would not be contingent on gaining regulatory approval for a planned wireless network, as was its previous plan. It would allow its current equity owner, Phil Falcone's Harbinger Capital Partners, to retain a stake in the company post-bankruptcy, along with Fortress and Melody Capital, also a financier of the new loans. But Ergen's investment vehicle, despite being the largest holder of LightSquared's loan debt, would be paid out in the form of new debt, rather than cash, like other lenders. The new debt may or may not be secured by collateral, depending on whether Ergen votes in favor of the plan.
