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LightSquared Still Seeks Wireless Spectrum Asset Bidders

LightSquared Inc., Philip Falcone’s wireless spectrum company, still seeking alternative bids to the $2.22 billion cash offer from Charles Ergen’s Dish Network Corp. (DISH) for its assets, has contacted more than 90 potentially interested parties.

LightSquared is working at the direction of a special committee of its board with Moelis & Co. to engage potential offers, the company said Nov. 1 in court papers filed in Manhattan bankruptcy court. A bankruptcy auction has been planned for Dec. 6, with Ergen’s offer serving as a stalking horse, or beginning bid.

“These efforts, which are designed to engender robust participation in the auction process, will continue in earnest in close coordination with LightSquared’s key creditor constituencies,” company lawyers wrote.

The company said it has told Dish that any purchase of its assets won’t include the claims it has against GPS manufacturers.

LightSquared sued Deere & Co., Garmin International Inc., Trimble Navigation Ltd. (TRMB), the U.S. GPS Industry Council and the Coalition to Save Our GPS on Nov. 1, as part of its bankruptcy case, saying their misrepresentations about the flawed designs of their products forced it into bankruptcy.

The lawsuit is an asset that “should be separately evaluated by potential bidders as part of LightSquared’s ongoing marketing process,” the company said in court papers.

Lawsuit Claims

LightSquared alleged in the complaint that defendants promised that after it resolved its “out-of-band-emissions” problems, its network wouldn’t interfere with global positioning system receivers.

The broken promises “prevented the timely launch of a nationwide wireless broadband network, caused LightSquared to lose investments and contracts worth billions of dollars, and deprived the public of much needed broadband spectrum,” LightSquared said in the complaint.

LightSquared, based in Reston, Virginia, filed for bankruptcy in May 2012, listing assets of $4.48 billion and debt of $2.29 billion. U.S. regulators blocked the service after makers and users of GPS devices, including the U.S. military and commercial airlines, said LightSquared’s signals would confound navigation equipment.

The company will have creditors vote on four competing plans of reorganization: one from the company; one from an ad-hoc group of lenders; one from Falcone’s Harbinger Capital Partners LLC, and one from U.S. Bank NA and Mast Capital Management LLC.

The case is In re LightSquared Inc., 12-bk-12080, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Tiffany Kary in U.S. Bankruptcy Court in New York at tkary@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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