Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Falcone Says Bankruptcy Is an Option for LightSquared

Phil Falcone, founder of Harbinger Capital Partners. Source: APCO Worldwide via Bloomberg
Phil Falcone, founder of Harbinger Capital Partners. Source: APCO Worldwide via Bloomberg

April 5 (Bloomberg) -- Phil Falcone said he may consider voluntary bankruptcy for LightSquared Inc., the broadband wireless venture majority owned by his hedge fund that has been derailed by regulators.

“There are arguments that we would be better off in bankruptcy than not,” Falcone said in an interview. “LightSquared, if I have to, I’ll put it into bankruptcy. I don’t care,” adding that he would maintain control of the Reston, Virginia-based company if it filed.

The company, which had planned to build a high-speed data network for as many as 260 million users, is struggling to survive in the wake of the Federal Communications Commission’s decision to block the service because of potential signal interference with global-positioning systems. Falcone, through his hedge fund Harbinger Capital Partners, has invested about $3 billion in the venture.

Falcone would prefer to get the government to swap his spectrum for that controlled by the U.S. Department of Defense. The 49-year-old hedge-fund manager has also been exploring signal-filtering technology as a possible remedy.

Bankruptcy is “not what I want, not what I desire, I’d rather find a different way out,” he said in the interview. Falcone is “seriously considering” bankruptcy, Reuters reported yesterday.

‘Complete the Vision’

LightSquared bondholders agreed to give Falcone a waiver not to put the company into technical default after the FCC said it planned to revoke LightSquared’s license. Falcone has a deadline of April 30 to revisit that waiver with his bondholders, who include Carl Icahn, David Tepper and Andrew Beal.

“The rationale behind a voluntary filing is to complete the vision, to complete the plan to build the network and protect the company from the creditors who are more interested in a quick flip,” Falcone said.

To contact the reporters on this story: Katherine Burton in New York at kburton@bloomberg.net; Max Abelson in New York at mabelson@bloomberg.net

To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net; David Scheer at dscheer@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.