Falcone’s LightSquared Adjourns Hearing on Asset Control

Philip A. Falcone’s bankrupt LightSquared Inc. delayed a hearing on control of its assets without disclosing specifics of a dispute with an entity owned by Dish Network Corp. Chairman Charlie Ergen.

“After discussions with parties, we ask your honor to adjourn today’s conference,” Matthew Barr, a lawyer for LightSquared, told U.S. Bankruptcy Judge Shelley Chapman in Manhattan today.

LightSquared had been scheduled to appear in court to discuss whether it owed something to lenders under an agreement reached in January that extended the wireless broadband company’s control over the case until July 15.

Falcone’s Harbinger Capital Partners LLC is “trying desperately” to keep ownership of LightSquared in the face of debt buying by Ergen’s SP Special Opportunities LLC fund, at the expense of creditors, lenders said in court papers filed yesterday. The Ergen fund joined the lender group on June 13.

The lenders also have said LightSquared hasn’t acted on a $2 billion bid from Ergen’s L-Band Acquisition Corp. and can’t get regulatory approval or enough financing to exit bankruptcy on its own.

LightSquared, based in Reston, Virginia, has shown that it “will not entertain any resolution of the case that threatens Harbinger’s ownership,” the lenders said.

LightSquared’s obligation to the lenders was blacked out in court documents. LightSquared said it shouldn’t be bound to the obligation because, following the Ergen fund’s purchases, a large portion of its debt is now owned by an entity controlled by an individual who competes with LightSquared.

The case is In re LightSquared Inc., 12-bk-12080, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

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