LightSquared Chapter 11 Bankruptcy under Review

Written by CFB Blogger. Posted in Blog

Creditors of bankrupt wireless company LightSquared and the company’s owner, Harbinger Capital Partners, will again try to reach a mediated restructuring deal after a judge raised the prospect of converting the Chapter 11 bankruptcy case to a Chapter 7 bankruptcy, reports Billy Chung for Reuters. Harbinger and two creditors, MAST Capital and JP Morgan, had reportedly devised a plan that would turn over certain spectrum assets to creditors. However, lenders with collateral claims on LightSquared’s operating assets objected, averring that this arrangement could derail the process for getting regulatory approval for LightSquared’s spectrum. LightSquared had filed for Chapter 11 bankruptcy in May 2012 when the Federal Communications Commission revoked its license to operate its spectrum due to concerns it interfered with GPS systems. The latest disagreement occurred when the involved parties indicated they had signed a consensual restructuring deal that had been arranged during summer mediation. Unfortunately, that deal disintegrated when Harbinger filed its latest restructuring plan. Judge Shelley Chapman has now introduced the question of converting the Chapter 11 bankruptcy case into a Chapter 7 bankruptcy. Attorneys for LightSquared have requested additional time to bring the conflicting factions together, stating that the company has “valuable assets” and hundreds of jobs would be at stake. The judge has now ordered additional mediation talks, hoping to bring all sides to the negotiating table where a deal with broad consensus could be struck. These confirmation hearings are currently scheduled for November 10. LightSquared offers the promise of delivering mobile broadband services nationwide, provided it can overcome the concerns regulators have about its network. For experienced and knowledgeable Chapter 7 or Chapter 13 personal bankruptcy assistance, you can rely on the attorneys from Client First Bankruptcy who have helped thousands of satisfied clients discharge their overwhelming debt. For your free initial consultation, please call our knowledgeable and compassionate lawyers toll-free at 800-383-6004. We answer our phones Monday-Friday from 8:30 a.m. – 6:00 p.m. Central Time. And log onto www.clientfirstbankruptcy.com for vital and timely bankruptcy information 24/7 so you can get the information you need at your convenience.