Feb. 4 (Bloomberg) -- Philip Falcone’s LightSquared Inc., can take a $33 million operating loan from a group of lenders that includes a fund linked to the wireless-network company’s one-time suitor, Dish Network Corp. Chairman Charles Ergen.
U.S. Bankruptcy Judge Shelley Chapman in Manhattan today said she was prepared to approve the loan agreement. Yesterday, LightSquared filed a revised proposal that added lender SP Special Opportunities LLC, a fund linked to Ergen that it sued earlier in the bankruptcy.
The case has been dominated by conflict between Ergen and Falcone. SP Special Opportunities built a stake in LightSquared debt before another entity affiliated with Ergen, L-Band Acquisition LLC, made a $2.22 billion bid for LightSquared’s assets. LightSquared and Falcone’s investment fund Harbinger Capital Partners LLC sued, claiming Ergen improperly bought the debt to assist L-Band’s takeover.
Ergen has since sought to withdraw his $2.22 billion offer, and Chapman has said L-Band can probably walk away. A group that owns most of the company’s debt has called the bid “irrevocable.”
Today’s loan agreement was negotiated at “arms’ length,” and was “hard fought,” Karen Gartenberg, a lawyer for LightSquared, told Chapman. The lenders involved get a higher priority to be repaid than other creditors.
The lender group also includes Capital Research & Management Co., Cyrus Capital Partners LP, Fir Tree Capital Opportunity Master Fund LP, Intermarket Corp., Solus Alternative Asset Management LP, Fortress Credit Corp. and funds managed by Aurelius Capital Management LP, according to the revised proposal.
LightSquared, based in Reston, Virginia, filed for bankruptcy in May 2012 after the Federal Communications Commission blocked its initial proposal to use wireless spectrum, saying it might interfere with global-positioning system navigation equipment.
The case is In re LightSquared Inc., 12-bk-12080, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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