July 23 (Bloomberg) -- A group of lenders to Philip A. Falcone’s LightSquared Inc. proposed a reorganization plan for the company, saying its LP unit should be sold at auction with the lead offer from an entity owned by Dish Network Corp.
L-Band Acquisition LLC, wholly owned by Dish, raised its offer for LightSquared’s assets to $2.2 billion by adding $220 million in cash under certain conditions, Tom Lauria, a lawyer for the lenders, said today in U.S. Bankruptcy Court in Manhattan. LightSquared has refused to meet with L-Band.
“This case resists all attempt to walk in a straight line, but we’re going to keep at it,” U.S. Bankruptcy Judge Shelley Chapman said after admonishing lenders’ lawyers for not telling her in advance that they intended to file the plan before today’s hearing. The hearing was scheduled to consider a timeline for LightSquared to receive proposals.
Chapman approved a timeline that requires competing bids by the end of the day on Dec. 6 and sets a hearing to confirm a final plan to begin Dec. 10.
LightSquared had said it expected competing proposals to reorganize its assets. The broadband-network services provider lost the exclusive right to control its reorganization July 15.
The lender group, which owns debt in the LP unit, includes Capital Research & Management Co., Cyrus Capital Partners LP, Intermarket Corp., UBS AG and SP Special Opportunities LLC, a fund owned by Dish Chairman Charlie Ergen. Their plan would split the LP unit from LightSquared’s Inc. unit.
Rachel Strickland, a lawyer for SP Special and L-Band, told Chapman today that LightSquared has refused to meet with its potential acquirer, even though a “bag of $2 billion in cash” has been sitting at its doorstep for more than 45 days.
Falcone’s Harbinger Capital Partners LLC is “trying desperately” to keep ownership of LightSquared in the face of debt-buying by SP Special, at the expense of creditors, lenders have said. The Ergen fund joined the lender group on June 13.
LightSquared, based in Reston, Virginia, filed for bankruptcy in May 2012, listing assets of $4.48 billion and debt of $2.29 billion.
The case is In re LightSquared Inc., 12-bk-12080, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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