LightSquared Inc.’s proposed format for an auction of its wireless-spectrum assets is improper, according to a group of lenders, and may foil a $2.22 billion offer from a unit of Charlie Ergen’s Dish Network Corp., Bloomberg News reported yesterday. The bankrupt company run by Philip Falcone faces a fight over how to sell its assets after the lenders filed an objection in Manhattan bankruptcy court. LightSquared proposes letting a committee that includes Falcone’s investment firm Harbinger Capital Partners LLC choose the winning bid, something lenders say shouldn’t be allowed because Harbinger opposes any sale of LightSquared’s assets. LightSquared’s proposed bid procedures are part of “its scorched-earth strategy” which also included filing a lawsuit against the global positioning system industry, lenders said. The lawsuit violated bankruptcy rules and the GPS industry has decided not to support LightSquared’s technology, according to today’s filing.
