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Philip Falcone's LightSquared blew through another $55.4 million last month, bringing the company's total losses to $1.3 billion since it filed for bankruptcy two years ago, the Wall Street Journal reported on Saturday. In a monthly operating report filed in bankruptcy court on Thursday, LightSquared again attributed a bulk of the losses to interest payments on its debt. In April, those payments totaled $36.9 million, bringing the amount of interest paid to $788.2 million since the wireless venture's May 2012 Chapter 11 filing. LightSquared's case had another major glitch last week when Judge Shelley Chapman threw out its restructuring plan, calling it a "sophisticated shell game" engineered by Falcone to be too unfair to Dish Network Corp. Chairman Charlie Ergen, the largest holder of LightSquared bank debt. She separately ruled that Ergen sidestepped the rules when he bought the debt, and that some of his claims should be placed below those of other creditors. In a strongly worded reading, Judge Chapman implored the lawyers and advisers on both sides to reach a settlement by May 27, or she will order mediation. The judge cited the cost of the case as the reason she read her ruling aloud, rather than wait the weeks it would take to finalize a written order.

Judges in Wilmington, Delaware, and Toronto jointly kicked off a novel cross-border trial yesterday to divvy up the $7.3 billion that was raised in the liquidation of once-mighty telecoms equipment maker Nortel Networks, which went bust in 2009, Reuters reported yesterday. Bankruptcy Judge Kevin Gross and Ontario Superior Court Justice Frank Newbould heard opening arguments yesterday from four attorneys: two in Wilmington and broadcast in Toronto, and two in Toronto and broadcast in Wilmington. The judges must decide how to allocate the money among former Nortel businesses in Canada, the U.S. and Europe. Administrators overseeing those former Nortel business units cannot repay creditors, make up pension shortfalls or pay off Nortel bonds until they know how much money they will receive.

To hear more about the Nortel case and other top cross-border cases and issues, be sure to join ABI in New York on June 20 for the Cross-Border Insolvency Program. For more information or to register, please click here: http://www.abiworld.org/CB14/

The historic Nortel Networks Corp. cross-border bankruptcy trial will begin today in Wilmington, Del., and Toronto, the Wall Street Journal reported today. Judges will decide how to divvy up $7.3 billion from the sale of patents and other assets between Nortel divisions in Canada, the U.S. and Europe. The trial is one of the largest bankruptcy cases ever dealt with in Canadian courts, and it will be closely watched in the legal community because of the unusual cross-border hearing conducted using closed-circuit video cameras before Justice Frank Newbold of the Ontario Superior Court and Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del. (Subscription required.)
http://blogs.wsj.com/bankruptcy/2014/05/09/forward-motions-cross-border…

To hear more about the Nortel case and other top cross-border cases and issues, be sure to join ABI in New York on June 20 for the Cross-Border Insolvency Program. For more information or to register, please click here: http://www.abiworld.org/CB14/

Philip Falcone’s LightSquared Inc. won a judge’s approval to marginalize a $1 billion debt claim by Dish Network Corp. Chairman Charles Ergen, a key to the wireless broadband company’s ability to leave bankruptcy under a proposed reorganization plan, Bloomberg News reported yesterday. Ergen’s claim will be put behind other creditors by an amount to be determined after further proceedings, Bankruptcy Judge Shelley Chapman said at a hearing yesterday as she prepared to rule on LightSquared’s plan to reorganize with $2.5 billion in financing backed by Fortress Investment Group LLC, JPMorgan Chase & Co. and Melody Capital Advisors LLC. LightSquared accused Ergen of secretly snapping up debt in the company to hijack its reorganization and get its airwaves at a discount. The company said that, as a rival, Ergen was barred from owning the debt in the first place and his claim could be singled out for worse treatment than that of other creditors.

A Canadian judge yesterday blasted the lawyers involved in the fight over $7.3 billion raised in the sale of Nortel Networks Inc.'s businesses, calling their tactics "a huge waste of money" and their fees "shocking,” the Wall Street Journal reported today. Citing the interests of thousands of pensioners who lost benefits and pay in Nortel's 2009 collapse, Justice Frank Newbould threw out a series of motions arguing over what evidence is to be presented at a trial set to start on Monday. The trial will determine how to split the proceeds of the sale of Nortel's businesses among the fallen technology giant's creditors around the globe. At an expected cost of at least $1 million a day, the trial is set to run for six weeks in the U.S. and Canada, two of the jurisdictions where Nortel has launched insolvency proceedings. Attorneys have been preparing for the trial for a year, following failed efforts to reach a compromise that would have allowed Nortel Canada, Nortel U.S. and Nortel Europe to split up the money and pay off creditors without a court battle.

In less than a week, Nortel Networks’ U.S., Canadian and European divisions will launch a courtroom contest over $7.3 billion in cash, a massive, innovative, cross-border six-week trial, the Wall Street Journal reported today. The case has been a bit of a mystery, according to the company’s creditors committee, as Nortel lawyers have decided to keep everything confidential until a later date. Nortel filed for bankruptcy protection in 2009, selling off its last operating divisions in 2010 and its patents in 2011. But while Nortel doesn’t have any business anywhere — not in the U.S., Canada, or Europe — in need of the protective shield of confidentiality, it does have secrets, lawyers told Justice Frank Newbould of the Ontario Superior Court of Justice at an April court session. Mostly those secrets are other companies’ secrets, according to the lawyers. Nortel is due to report on Thursday to Justice Newbould in Toronto and Judge Kevin Gross in Wilmington, Del., with pre-trial updates.

LightSquared's reorganization plan gives too much to value to the wireless venture's top shareholder, Philip Falcone, and shouldn't be approved, a lawyer for Dish Network Corp. Chairman Charlie Ergen said yesterday, the Wall Street Journal reported today "The debtors can still reorganize, just not under this plan," said Willkie Farr & Gallagher LLP's Rachel S. Strickland, a lawyer for Ergen, LightSquared's largest secured lender. Under the proposed restructuring, Falcone would retain more than a third of LightSquared's equity, a rarity in chapter 11 cases. Falcone has denied in court that the plan treats him too well. LightSquared is seeking court approval of its restructuring plan, but also wants a favorable ruling in a separate trial over its allegations that Ergen improperly acquired nearly $1 billion in the company's debt.

Dish Network Corp. Chairman Charles Ergen said that LightSquared Inc.’s plan to reorganize will improperly benefit lenders including JPMorgan Chase & Co., which will own all of the wireless-spectrum company’s assets after bankruptcy, Bloomberg News reported today. The plan was devised in talks where LightSquared’s controlling shareholder, Philip Falcone, “made it clear that he was interested in using the plan to enrich himself and equity holders,” Ergen said yesterday in a bankruptcy court filing. Falcone stated that he wanted to protect three parties: his investment firm Harbinger Capital Partners LLC, Fortress Investment Group LLC (FIG) and JPMorgan, Ergen said. SP Special Opportunities Inc., an Ergen fund that invested $1 billion in LightSquared debt, made the allegations following an eight-day trial on whether LightSquared can reorganize under a plan that puts Ergen’s debt behind other lenders and equity holders to be repaid.

The Federal Communications Commission, which monitors the ownership of media companies that use the agency's licenses, also has eyes on a bankrupt communications company's moves throughout a chapter 11 case, Dow Jones Daily Bankruptcy Review reported today. Many bankruptcies in the communications industry involve the sale of a company or — at the very least — a major ownership shift that ultimately needs the agency's approval. The dynamic can create tension in a telecom bankruptcy case, said a panel of bankruptcy experts and telecommunication lawyers yesterday at ABI’s 32nd Annual Spring Meeting.

Creditors who say that ReconRobotics Inc. owes them $9.5 million have asked a federal court to put the robotics firm into chapter 11 reorganization, the Minneapolis Business Journal reported yesterday. Edina, Minn.-based ReconRobotics' creditors include Winona, Minn.-based RiverStar Inc. and Rushford, Minn.-based RiverBend, affiliated companies both listing Stephen Craney as president. RiverBend, a manufacturer, said in court filings that it's owed about $3.05 million for unspecified goods. Supply-chain management business RiverStar says it is owed about $5.38 million for goods.