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A private-equity firm backed out of a deal to acquire LightSquared Inc., the telecommunications firm in bankruptcy proceedings, amid uncertainty over when federal regulators would clear the way for the company to build out its wireless network, the Wall Street Journal reported today. Centerbridge Partners LP abandoned the deal "for economic and noneconomic reasons," a LightSquared lawyer said yesterday during a bankruptcy court hearing. Centerbridge worried that LightSquared would burn hefty amounts of cash while waiting for approval from regulators, including those at the Federal Communications Commission, to pursue a so-called spectrum swap that would allow the company to build out its network. With no assurances that a decision from the agency would come soon, Centerbridge decided against investing money in LightSquared.

Private-equity firm Centerbridge Partners LP reached a tentative deal to buy LightSquared Inc. out of bankruptcy proceedings, potentially upstaging a bid by Dish Network Corp. to take over the wireless-telecommunications firm, the Wall Street Journal reported today. Centerbridge proposed paying roughly $3.3 billion for the wireless venture, backed by financier Philip Falcone, and assuming about $1.7 billion in various liabilities, the people said. The deal would be executed under a bankruptcy reorganization plan. Dish, the satellite-television provider controlled by Charlie Ergen, earlier this year bid $2.2 billion for LightSquared. Dish has been on the hunt for more spectrum in its efforts to enter the wireless industry to diversify as the television business matures.

Bankruptcy Judge Shelley C. Chapman yesterday allowed LightSquared to move forward with its lawsuit against Dish Network Corp. and Chairman Charlie Ergen over his purchases of LightSquared debt before Dish bid for the wireless satellite company's assets, Dow Jones Daily Bankruptcy Review reported today. Judge Chapman denied a bid by Dish and Ergen to dismiss the suit, allowing LightSquared to go after Ergen on its charge that he bought the debt on behalf of Dish and not himself. Such purchases would have been illegal under LightSquared's credit agreement, which prohibited competitors from buying the debt.

The fight over defunct Nortel Networks' $7.5 billion in cash will be decided in joint U.S.-Canadian court hearings and not in arbitration, a U.S. appeals court ruled on Friday, Reuters reported on Saturday. The U.S. Court of Appeals for the Third Circuit upheld a bankruptcy court ruling in March that there was never an agreement to use arbitration to divide the pile of cash among various Nortel estates around the world. Nortel sought protection from creditors in courts around the world in 2009 and its businesses were quickly sold, reducing a once-global corporate giant to little more than a pile of cash. But it was never decided how to allocate the money raised between different insolvency and bankruptcy proceedings in different countries. An agreement governing the money refers to undefined "dispute resolvers" that Nortel's European estates argued was arbitration. The U.S. Bankruptcy Court in Wilmington, Del. disagreed, and the Court of Appeals affirmed that ruling.

Atari Inc., the company that helped give birth to the modern-day videogame industry with the introduction of now-classic games such as Asteroids and Pong, received court approval of its plan to exit bankruptcy under the control of its French parent Atari S.A., the Wall Street Journal reported today. Bankruptcy Judge James Peck confirmed the bankruptcy-exit strategy proposed by Atari that is based on a $3.4 million cash contribution plus an additional $1.75 million when Atari exits bankruptcy from parent company Atari S.A. Bankruptcy lender Alden Global Capital will be paid in full the $3.8 million it is owed. Atari will use its remaining cash to pay up to $560,000 to unsecured creditors when it leaves bankruptcy, another $560,000 a year after that and $630,000 the following year.

Charles Ergen knew that his relationship to Dish Network Corp. and EchoStar Corp. made it improper for him to buy up LightSquared Inc.’s debt, according to new allegations in a lawsuit filed against him, Bloomberg News reported yesterday. Philip Falcone’s Harbinger Capital Partners hedge fund made the claims yesterday in an amended complaint in bankruptcy court. Ergen first looked into whether Dish could acquire LightSquared debt in the fall of 2011, and an investigation then concluded that Dish was prohibited from buying LightSquared debt because it was a competitor, according to the complaint.

Dish Network Inc. shareholders are asking a Nevada judge to exclude the company’s chairman and controlling shareholder, Charlie Ergen, from the bankruptcy court auction of LightSquared Inc., Bloomberg News reported yesterday. Ergen, who privately bought $1 billion in LightSquared debt, has a conflict of interest, and Dish’s $2.22 billion bid for LightSquared’s wireless spectrum should be overseen by an independent committee, lawyers for the shareholders argued at a hearing yesterday. The Jacksonville Police and Fire Pension Fund said in a complaint brought on behalf of the satellite-television provider against the board of directors that Ergen’s private purchase of LightSquared’s debt conflicts with Dish’s strategic interests in the company’s assets, and that a “corporate governance breakdown” at the company had ensued. The pension fund said that Dish had created a two-person special committee to protect it from a “blatant conflict of interest” between the company, which seeks to buy spectrum as part of its business strategy, and Ergen, who “secretly made himself LightSquared’s largest creditor” by buying its debt from around the time of its bankruptcy filing in May 2012.

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.

Bankrupt wireless communications firm LightSquared Inc. has filed a lawsuit accusing Dish Network Corp. and its chairman, Charles Ergen, of improperly trying to take control of LightSquared's broadband spectrum, Reuters reported yesterday. The lawsuit, filed in bankruptcy court on Friday, is an effort to revive an earlier case by LightSquared's controlling stakeholder, Phil Falcone's Harbinger Capital Partners, that was thrown out last month. LightSquared alleges that Dish, Ergen, and other Ergen-controlled entities made improper trades and violated a key credit agreement in order to become LightSquared's largest creditor, with the intention of taking control of LightSquared's spectrum, the airwaves used for wireless communications.

A tentative takeover bid for BlackBerry from its largest shareholder collapsed yesterday, clouding the immediate future of the company, the New York Times DealBook blog reported today. Fairfax Financial Holdings of Toronto, the insurance and investment company, had made a conditional, nonbinding offer to buy the 90 percent of BlackBerry shares it does not own for $9 each, valuing the company at about $4.7 billion. But Fairfax announced yesterday that it would not proceed with the offer, setting the once-mighty company on a path into the unknown and sending its stock into a tailspin. Shares of BlackBerry fell more than 16 percent, to $6.49. Adding to the uncertainty and confusion was the company’s announcement that Thorsten Heins, who was appointed chief executive in January 2012 with a mandate to turn the company around, had stepped down. BlackBerry said that John S. Chen, the former chief executive of Sybase, would become BlackBerry’s executive chairman and acting chief executive but offered no indication of how long he would serve in the top management role. In place of a takeover, Fairfax and a group of institutional investors will invest $1 billion through debt securities that can be converted into common shares at $10 a share. Exactly how BlackBerry will use that cash to restore its position in the smartphone market is unclear, and neither Fairfax nor BlackBerry would identify the other investors.