LightSquared looks shaky

fgentges at fgentges at
Sun May 13 17:42:22 CDT 2012

Lenders seem impatient to be repaid.  Bankruptcy may be soon.  Lenders 
may be facing the fact that it is a dumb idea and are unwilling to 
extend the time for repayment.

Frank K0BRA

Phil Falcone's LightSquared preparing for potential bankruptcy filing: 

Last Updated: 11:16 AM, May 13, 2012

Posted: 11:16 AM, May 13, 2012

Hedge-fund manger Philip Falcone's LightSquared Inc. venture is 
preparing for a potential bankruptcy-protection filing, as negotiations 
with lenders to avoid a potential default faltered, according to people 
familiar with the matter.

The two sides still have until 5:00pm Monday to reach a deal that would 
keep LightSquared out of bankruptcy court, and there were indications 
over the weekend that a final decision hadn't yet been reached on the 
company's fate. Still, the two sides remained far apart and people 
involved in the negotiations expected LightSquared to begin making 
bankruptcy preparations in earnest.

Lenders aren't expected to grant LightSquared an extension on a 
debt-term violations waiver that expires Monday at 5:00pm, the people 
said. Falcone, whose hedge-fund firm, Harbinger Capital Partners, is 
LightSquared's main backer, couldn't agree with lenders on how much 
ownership in the wireless venture to cede to them over time, the people 
said. There were also a number of other terms separating the two sides.

Falcone believes the lenders "are asking for conditions they know 
Harbinger and Phil cannot agree to," said a person close to the 
negotiations. Falcone continues to seek a middle ground, while conceding 
the odds of a deal looked low over the weekend, this person said.

LightSquared's board tentatively planned to meet Sunday to discuss 
authorizing a bankruptcy filing, some of the people said. It is likely a 
Chapter 11 bankruptcy filing would come sometime before Monday evening, 
these people said.

The lenders wanted LightSquared to be overseen by an independent board 
that didn't include Falcone. The hedge-fund manager tacitly agreed to 
that, but the financial restructuring created a gulf between the two 
sides. The lenders also wanted to hold Falcone personally liable for a 
future bankruptcy filing under certain circumstances, but Falcone balked 
at that term, especially since he was poised to no longer sit on 
LightSquared's board or make key decisions for the firm, the people said.

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