%1

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.

GateHouse Media Inc., which owns more than 400 community newspapers and hundreds of local websites, is restructuring its $1.2 billion debt in a prepackaged chapter 11 filing, The Associated Press reported yesterday. Newcastle Investment Corp., which owns 52 percent of GateHouse's debt, then plans to combine GateHouse's media empire with the 33 Dow Jones Local Media publications that it recently bought from News Corp. for $87 million. Newcastle would then spin off those operations to form a new publicly traded company called New Media. GateHouse became overleveraged during the 2008 financial crisis, but over the past four years has doubled digital revenue and cut $150 million in costs. The prepackaged reorganization already has the support of other creditors, who will have the option to convert their positions to stock in GateHouse or cash at terms of 40 cents on the dollar. Both GateHouse Media and Newcastle Investment are affiliates of Fortress Investment Group LLC, which specializes in buying troubled businesses.

Philip Falcone’s LightSquared Inc. shouldn’t be allowed to run its own bankruptcy auction, a group of lenders said, citing depleted cash, a changing industry and a controlling shareholder who wants to block the sale, Bloomberg News reported yesterday. The lenders, a trustee or an independent committee should conduct the planned asset auction, the lenders said in a filing yesterday in court. Since the chapter 11 case began, LightSquared’s cash has dwindled by $125 million to about $61 million, Steve Zelin of financial adviser Blackstone Group LP said in support of the lenders.

Eastman Kodak Co. selected nine people to serve on its new board after it emerges from bankruptcy, including six new members, the Wall Street Journal reported today. Rochester, N.Y.-based Kodak sought chapter 11 protection in January 2012. Since then, it has been working to sell assets and shed unprofitable business lines to reorganize around its commercial-imaging business, which includes digital printers and motion-picture film. The new board members will be Mark S. Burgess, chairman of packaging-products manufacturer Clondalkin Group; Matt Doheny, president of investment firm North Country Capital LLC; John Janitz, chairman of investment firm Evergreen Capital Partners LLC; George Karfunkel, chairman of consultancy Sabr Group; Jason New, senior managing director of private-equity firm Blackstone Group L.P. and Derek Smith, managing principal of investment firm BlueMountain Capital Management.

Philip Falcone's Harbinger Capital on Friday sued agricultural equipment maker Deere & Co and Global Positioning System companies and groups for damages of $1.9 billion as it looks to recoup its investment in bankrupt wireless company LightSquared, Reuters reported yesterday. The lawsuit's defendants, who include GPS companies Garmin International and Trimble Navigation Ltd., had opposed LightSquared's plans to build a wireless network because of concerns it would interfere with GPS systems, which are used in everything from farming to airline navigation. Other defendants include industry groups the U.S. GPS Industry Council and the Coalition to Save Our GPS. Harbinger, which has spent billions of dollars on LightSquared, said in a complaint filed on Friday that it never would have made the investments if the GPS industry had disclosed potential interference problems between the LightSquared spectrum and GPS equipment between 2002 and 2009.

Phil Falcone’s hedge fund sued satellite TV mogul Charlie Ergen and his Dish Network Corp. for $4 billion yesterday for an alleged loan-trading scheme aimed at stripping Falcone of his control over LightSquared Inc., a bankrupt wireless communications business, Reuters reported yesterday. Billionaire Ergen has turned his focus to LightSquared after bowing out of a takeover fight for another wireless company, Sprint Corp., which agreed to a deal with Japan’s SoftBank Corp. Ergen increased his bid for LightSquared to $2.2 billion last month. LightSquared is a provider of satellite-based mobile voice and data services to hundreds of thousands of devices used in the public safety, security and asset-tracking sectors. It is building a 4G LTE broadband mobile network that it says will serve 260 million people. The lawsuit by Falcone’s Harbinger Capital Partners alleges that Ergen and his affiliates engaged in a complex fraudulent scheme to become LightSquared’s biggest lender. Harbinger alleges Ergen is trying to use that position to strip Falcone of the company.

A group of lenders to Philip A. Falcone’s LightSquared Inc. proposed a reorganization plan for the company, saying that its LP unit should be sold at auction with the lead offer from an entity owned by Dish Network Corp., Bloomberg News reported yesterday. L-Band Acquisition LLC, wholly owned by Dish, raised its offer for LightSquared’s assets to $2.2 billion by adding $220 million in cash under certain conditions, Tom Lauria, a lawyer for the lenders, said yesterday in court. LightSquared has refused to meet with L-Band. Bankruptcy Judge Shelley Chapman admonished lenders’ lawyers for not telling her in advance that they intended to file the plan before yesterday’s hearing. The hearing was scheduled to consider a timeline for LightSquared to receive proposals. Judge Chapman approved a timeline that requires competing bids by the end of the day on Dec. 6 and sets a hearing to confirm a final plan to begin Dec. 10.

Maxcom Telecomunicaciones SAB, a Mexico City-based carrier, filed for chapter 11 protection in the U.S., Bloomberg News reported yesterday. Maxcom listed $11.1 billion in assets and $402.3 million in debt in its court filing yesterday. Maxcom, which has struggled to compete with billionaire Carlos Slim’s America Movil SAB, said on April 25 that it was considering filing for chapter 11 after a takeover deal with Ventura Capital Privado SA collapsed when the company failed to persuade 80 percent of bondholders to accept its restructuring proposal. The company’s defaulted bonds surged to a 10-week high earlier this month after it unveiled a second restructuring proposal with Ventura Capital. The telephone company said June 18 it missed an $11 million bond payment as it held discussions with Ventura and bondholders.

Philip A. Falcone’s bankrupt LightSquared Inc., said that it foresees competing proposals to reorganize its assets and asked the court for a deadline of Sept. 4 to take proposals, Bloomberg News reported on Friday. The broadband network services provider, also facing a $2 billion cash offer for its assets from an entity owned by Dish Network Corp. Chairman Charlie Ergen, lost the exclusive right to control its reorganization July 15. It hasn’t been able to get creditor support for a reorganization timeline and is proposing a streamlined process, it said on Friday in court papers. LightSquared asked the bankruptcy court for permission to have outlines of all competing plans filed by Sept. 4, with a Dec. 16 confirmation hearing to approve the best offer.

Microelectronics company Endicott Interconnect Technologies Inc., which was spun off from International Business Machines Corp. (IBM) in 2002, filed for chapter 11 protection on Wednesday and plans to sell its assets, Dow Jones Newswires reported yesterday. In court documents, Endicott said that competition from foreign manufacturers and reduced federal spending as a result of sequestration have caused revenues to fall drastically since 2009. The Endicott, N.Y.-based company designs and produces printed circuit boards and advanced flip chip and wire bond semiconductor packages for clients that include IBM, Cisco Systems Inc., Northrop Grumman Corp. and the U.S. Department of Defense. Endicott Interconnect projects revenue in 2013 will be less than $100 million, compared to a high of $414 million in 2008, according to court documents.