LightSquared Cancels One Dot Six Asset AuctionTiffany Kary
Philip Falcone’s LightSquared Inc., the bankrupt wireless-spectrum company, said it won’t hold today’s planned auction for its One Dot Six assets and is instead “pursuing and negotiating an alternative transaction.”
The auction was canceled by a special committee of LightSquared’s board, according to a filing yesterday in U.S. Bankruptcy Court in Manhattan. LightSquared’s main spectrum assets were to be sold separately and had attracted a $2.2 billion bid from a unit of Charlie Ergen’s Dish Network Corp.
U.S. Bank NA and Mast Capital Management LLC, a Boston-based investment adviser, had planned to start the One Dot Six auction with a bid equal to what company owes them.
The committee directed LightSquared to pursue an alternative transaction, which is “supported by the significant stakeholders in the Chapter 11 cases, other than the Ad Hoc Secured Group” and “would be implemented through the debtors’ Chapter 11 plan,” according to yesterday’s filing.
The Ad Hoc group, which held the majority of LightSquared’s other debt, included SP Special Opportunities LLC, a fund owned by Ergen. Ergen and his entities have been sued by LightSquared and Faclone’s Harbinger Capital Partners LLC investment fund over the way SP bought debt in the company before making an offer for its assets.
LightSquared filed for bankruptcy protection last year after the Federal Communications Commission blocked its initial proposal to use its wireless spectrum. The FCC concluded such use would interfere with navigation gear that relies on the global positioning system.
LightSquared, based in Reston, Virginia, listed assets of $4.48 billion and debt of $2.29 billion in its Chapter 11 filing.
LightSquared Inc. includes bankrupt units One Dot Four Corp., One Dot Six Corp. and One Dot Six TVCC Corp., according to court papers.
The case is In re LightSquared Inc., 12-bk-12080, U.S. Bankruptcy Court, Southern District of New York (Manhattan).