The U.S. Department of Justice's bankruptcy watchdog on Friday questioned the feasibility of four competing restructuring plans for bankrupt LightSquared put forth by the company and its creditors, Reuters reported on Friday. The U.S. Trustee Program said that the plans would provide third parties with overly broad releases from potential legal claims. LightSquared, in bankruptcy since 2012, is fighting to keep control of its valuable spectrum amid a takeover push by Dish Network Corp. Three creditor groups have proposed plans that contemplate an auction for the assets, and Dish has already made a baseline bid of $2.2 billion. A fourth plan, proposed by LightSquared's majority owner, Phil Falcone's Harbinger Capital Partners, would restructure the company without an auction, with Harbinger maintaining control. The Trustee's office said that the restructuring plans could be read to protect third parties from claims related to criminal conduct and professional malpractice, even though they exclude fraud and gross negligence claims from the releases. The objection will be considered at a hearing on December 10 in Manhattan bankruptcy court.
