Hedge fund Harbinger Capital Partners sued Deere & Co., Garmin International Inc. and Trimble Navigation Ltd., claiming they concealed facts about global positioning system products that ruined Harbinger’s investment in a wireless network.
The companies are accused of failing to disclose that Harbinger’s venture, LightSquared Inc., would interfere with their products, according to a complaint filed today in federal court in Manhattan. Harbinger said its damages are at least $1.9 billion.
“Plaintiffs have already lost a great deal and now stand to lose their entire investment,” Harbinger said. “Plaintiffs never would have made this investment if the defendants had told the truth earlier.”
LightSquared filed for bankruptcy in 2012. U.S. regulators blocked the service after GPS-device makers and users -- including the U.S. military and commercial airlines -- said signals from LightSquared’s service would confound navigation gear.
Harbinger, founded by Philip Falcone, sued Charles Ergen and his Dish Network Corp. on Aug. 6 in bankruptcy court in Manhattan, accusing Ergen of a scheme to prevent LightSquared from emerging from bankruptcy under Harbinger’s control.
Jim Kirkland, general counsel for Sunnyvale, Calif.-based Trimble, said responsibility for Harbinger’s losses “rests squarely with Harbinger.”
“The Harbinger lawsuit is an attempt to avoid responsibility for the consequences of LightSquared’s plan to build a high-powered mobile network in spectrum adjacent to GPS, despite prior FCC restrictions,” Kirkland said in a statement.
Representatives of Deere and Garmin didn’t respond to requests seeking comment on the lawsuit.
In the complaint, Harbinger said it wouldn’t have invested in the LightSquared network if the companies disclosed between 2002 and 2009 what they “ultimately revealed” in 2011 and 2012 -- that they designed their GPS products to use the same broadband spectrum assigned to Harbinger.
Harbinger is suing for fraud and violations of securities laws. It said the GPS companies had a duty to disclose material information that they knew Harbinger would rely on as it invested in the LightSquared network.
The case is Harbinger Capital Partners v. Deere & Co., 13-cv-05543, U.S. District Court, Southern District of New York (Manhattan).