A lawyer for LightSquared yesterday said that the company will set aside $400 million to give certain bankruptcy lenders, including Dish Network Corp. Chairman Charles Ergen, the option to take a portion of their repayments in cash instead of notes, Reuters reported yesterday. The bankrupt wireless venture, opening a week-long trial seeking a judge's approval of its debt restructuring plan, is looking to end one of the most litigious bankruptcies of recent years. LightSquared, owned by Phil Falcone's Harbinger Capital Partners, was planning to build a massive wireless network when it was forced to file for bankruptcy in May 2012, after the Federal Communications Commission revoked its spectrum license over potential GPS interference. Since then, no fewer than seven restructuring proposals have failed amid creditor fights over the treatment of debt and the underlying value of LightSquared's spectrum. To end its bankruptcy, LightSquared must convince Bankruptcy Judge Shelley Chapman that its latest plan treats creditors fairly. The plan would let Harbinger retain some equity but cede operational control, transfer a chunk of equity to lenders Fortress Investment Group and Centerbridge Partners, and repay other lenders, including Ergen, via notes.
