An affiliate of LightSquared Inc., Philip Falcone’s bankrupt wireless broadband venture, is seeking to borrow as much as $30 million to keep operating while under court protection from creditors.
LightSquared would guarantee repayment of the proposed loan to One Dot Six Corp., which would use the money to help make lease payments and finish building projects related to the broadband effort, according to court papers filed yesterday in U.S. Bankruptcy Court in Manhattan. One Dot Six is among a group of LightSquared affiliates, known as the “Inc. Obligors,” which need funding to keep operating in bankruptcy. Another group of “LP” affiliates is using cash that had been set aside as collateral.
Failing to get financing “would irreparably harm the Inc. Obligors, their estates, their creditors, and equity holders, and the possibility for a successful reorganization,” LightSquared said in court papers.
The company, based in Reston, Virginia, filed bankruptcy last month, with plans to try to resolve concerns of U.S. regulators who thwarted the company’s attempt to deliver high-speed wireless service to as many as 260 million people.
Harbinger Capital Partners, Falcone’s New York-based hedge fund, had invested about $3 billion in LightSquared and owned about 74 percent of it as of Jan. 27.
The case is In re LightSquared Inc., 12-12080, U.S. Bankruptcy Court, Southern District of New York (Manhattan).