Dish Network Corp. Chairman Charlie Ergen would receive a controlling stake in troubled wireless company LightSquared under the company's newest restructuring plan, Dow Jones Daily Bankruptcy Review reported today. The deal, reached Friday as a result of mediation with Bankruptcy Judge Robert Drain, would give Ergen 60 percent of the new equity in the restructured LightSquared plus $1 billion in new junior debt. JPMorgan Chase Co., one of LightSquared's lenders, would receive a total of 31.9 percent of the equity and a seat on the board of directors in exchange for its debt and $189 million in funding. Other lenders would receive a smaller piece of equity and warrants to purchase common stock.
Hedge fund manager Phil Falcone's efforts to hold onto a piece of his LightSquared wireless venture took a hit yesterday when a bankruptcy judge denied a request by his Harbinger Capital Partners to wipe out a lender group's $1.7 billion claim against a unit of the company, Reuters reported yesterday. Bankruptcy Judge Shelley Chapman criticized the request as an attempt by Harbinger, which controls LightSquared, "to leapfrog up the capital structure over secured creditors." LightSquared has been in chapter 11 bankruptcy since 2012, when regulators barred it from using its wireless spectrum due to fears of interference with GPS systems. It has proposed a restructuring plan that would transfer control of the company to the lenders. Harbinger, hoping to salvage some equity, submitted a competing plan in August, which would split LightSquared's so-called "Inc" and "LP" units and allow Harbinger to retain a stake in the Inc assets. But Harbinger's plan was contingent on Judge Chapman ruling that the lenders did not have any claim against the “Inc” assets.
A bankruptcy judge in New Hampshire yesterday ordered the unsealing of papers spelling out, in detail, the reasons jilted Apple Inc. supplier GT Advanced Technologies Inc. filed for chapter 11 protection, the Wall Street Journal reported today. Apple sought to keep the information under wraps out of fear it will harm its reputation and its relationships with other suppliers. Over Apple’s protests, Judge Henry Boroff said that he would take another look at the challenged document, an affidavit signed by GT Advanced Chief Operating Officer Daniel Squiller and filed with the court. Next week, the judge said, he will issue an order unsealing Squiller’s statement. The Oct. 6 bankruptcy filing sent GT Advanced’s stock into a dive and bond prices tumbled, as shocked investors clamored for more information about what went wrong between the smartphone maker and the company it had set up in the business of producing sapphire material for smart screens. At a court hearing Thursday, Judge Boroff said that Bankruptcy Code protections against defamatory information don’t apply to Squiller’s characterizations of Apple’s behavior.
A pension fund said yesterday that GT Advanced Technologies Inc. shouldn’t be allowed to destroy papers filed under seal in its bankruptcy because shareholders may need the information in lawsuits, Bloomberg News reported yesterday. A sealed declaration by GT Advanced’s chief operating officer, Daniel Squiller, “details the reasons precipitating and necessitating” the bankruptcy, information litigants in at least nine federal securities lawsuits will need, the City of Pontiac General Employees’ Retirement System said in a filing yesterday in U.S. Bankruptcy Court in New Hampshire. GT Advanced filed for bankruptcy this month without specifying why. The Merrimack, N.H.-based company, which makes synthetic sapphire used to strengthen smartphone screens, later cited a burdensome supply agreement with Apple Inc. but continues to keep many of the details secret. The company has since reached a settlement with Apple that originally called for the destruction of Squiller’s declaration once the bankruptcy court approved the deal. Securities law requires all documents that may be relevant to a case be preserved, the retirement fund said in its filing.
GT Advanced Technology Inc., which struck an agreement with erstwhile partner Apple Inc. last week that allowed it to proceed with its bankruptcy, said that the iPhone maker had threatened to seek damages of more than $1 billion against the company. Former stock market darling GT Advanced, once set to become the main supplier of scratch-resistant sapphire to Apple, surprised markets when it filed for chapter 11 earlier this month. It failed to meet performance targets set out in its supply agreement with Apple, setting the stage for its failure, according to court filings. GT Advanced said in a court filing late on Monday that it needed to settle with the iPhone maker to avert a costly legal battle it might not win. "The alternative to the settlement agreement would be months, if not years, of costly, time-consuming, and distracting litigation with Apple over a wide range of contested issues, the success of which GTAT could not guarantee," the company said in a court filing late on Monday. http://www.reuters.com/article/2014/10/28/gt-advanced-tech-bankruptcy-a…
In related news, Dow Jones & Co. Inc., publisher of the Wall Street Journal, has asked a court to deny a request by Apple Inc. and GT Advanced Technology Inc. to keep under seal some documents relating to GT Advanced's bankruptcy. Dow Jones, owned by News Corp., said that keeping the documents under seal is an offense to constitutional principles of public access, according to the publisher's court filing yesterday. GT Advanced, which supplied sapphire material to Apple to make smartphone screens, filed for chapter 11 protection earlier this month under mysterious circumstances. GT refused to explain why it had imploded, citing confidentiality clauses in its Apple contracts. http://www.reuters.com/article/2014/10/29/gt-advanced-tech-bankruptcy-d…
Shareholders of GT Advanced Technologies are lobbying regulators to form a committee to vouch for their interests in the sapphire maker's bankruptcy, saying that they believe their shares may still have value, Reuters reported yesterday. GT Advanced, which supplied sapphire to Apple Inc., filed for chapter 11 protection this month under mysterious circumstances, sending shares plummeting. The case boggled the minds of market analysts when GT refused to explain why it had imploded, citing confidentiality clauses in its Apple contracts. While shareholders are typically wiped out in bankruptcy, GT Advanced stockholders believe their equity may not be worthless. Some are reaching out to the U.S. Department of Justice's bankruptcy regulator, the U.S. Trustee Program, asking it to form a committee in GT's bankruptcy to represent shareholder interests. According to a source close to the effort, law firm Brown Rudnick, which routinely represents creditors in big chapter 11 cases, is drafting a letter to the Trustee on behalf of a shareholder group requesting a committee.
The unexpected bankruptcy filing of a defunct Massachusetts company raised the suspicion yesterday of a bankruptcy judge who said that he had "significant doubts" about the legality of the case, Dow Jones Daily Bankruptcy Review reported today. Judge Brendan Shannon punted on the dismissal question Tuesday but ruled that a sale hearing, scheduled to take place today, connected to long-running litigation between Global Naps and Verizon New England Inc. could go forward. Absent Judge Shannon's ruling, the so-called automatic stay triggered by a bankruptcy filing would have prevented the hearing from taking place. Global Naps, a onetime local exchange carrier, has been under a court-appointed receiver's control since 2010 to ensure that it pays a $57.7 million judgment owed to Verizon New England from the lawsuit, which started as a fight over fees.
Apple and GT Advanced Technologies Inc. struck an agreement yesterday that will let GT begin the shutdown of key Arizona operations, and shed some more light on why the former stock market darling abruptly filed for bankruptcy this month, Reuters reported yesterday. A lawyer for GT, Apple's erstwhile sapphire supplier, described the deal at a hearing in U.S. Bankruptcy Court in Springfield, Mass., saying that it would save the company money and allow it to be more open about its mysterious chapter 11 filing on Oct. 6. Scant details have emerged since the filing, which wiped out most of GT's market value and triggered speculation as to what might have soured its relationship with Apple. It remains unclear how much information GT would get to reveal under Tuesday's agreement, which was described verbally by GT's lawyer but has not been fully outlined in court filings.
LightSquared lost another $64.8 million in September, bringing Philip Falcone ’s wireless venture’s total losses to more than $1.6 billion since the project filed for bankruptcy protection more than two years ago, the Wall Street Journal reported today. In a financial snapshot filed in bankruptcy court on Wednesday, lawyers for LightSquared attributed the bulk of the losses to interest payments on its debt. LightSquared paid $38.6 million on interest costs related to its debt during September, court papers show. The interest payments, which were mostly made to the holders of LightSquared’s bank debt, now stand at $981.8 million since the company filed for bankruptcy. The company also spent $4.6 million on lawyers and advisers who have been trying to figure out how to get the company out of chapter 11 protection. LightSquared filed for bankruptcy in May 2012 after federal regulators refused to approve its plans to launch the wireless network, which they said could interfere with global-positioning systems. Since that point, the company has lost $1.66 billion, court papers show.
Global Naps Inc. sought chapter 11 bankruptcy protection Tuesday, years after being placed into a receivership to satisfy a court loss to Verizon New England Inc., Dow Jones Daily Bankruptcy Review reported today. Bankruptcy court papers estimate assets of $10 million to $50 million and debts of $50 million to $100 million for the company, which was established as a competitive local exchange carrier. A federal appeals court ruling from last year involved a decade-plus of litigation between Global Naps and Verizon New England, which is listed in bankruptcy court papers as the top-ranking creditor, owed nearly $36 million.
