Falcone’s LightSquared Bankruptcy Plan Rejected as ‘Shell Game’
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LightSquared Inc.’s plan to exit bankruptcy, designed by controlling shareholder Philip Falcone, was thrown out by a judge who called it a “shell game” that was unfair to the wireless-broadband company’s one-time suitor, Dish Network Corp. Chairman and co-founder Charles Ergen.
LightSquared had sought to put Ergen’s $1 billion debt claim behind those of other creditors as it reorganized with $2.5 billion in financing backed by Fortress Investment Group LLC, JPMorgan Chase & Co. and Melody Capital Advisors LLC, leaving Falcone with an equity stake in a new company.