Feb. 15 (Bloomberg) -- LightSquared Inc., whose owner Philip Falcone fought a takeover bid from Dish Network Corp. Chairman Charles Ergen, filed the description of a new reorganization plan that could allow it to exit bankruptcy as a stand-alone company.
The disclosure statement, which explains to creditors the terms of the proposed plan, was filed yesterday in Manhattan bankruptcy court. It’s backed by an ad-hoc group of lenders to the company’s “LP” unit and by Mast Capital Management LLC, which had offered to buy the “Inc.” unit.
LightSquared filed for bankruptcy in May 2012 after the Federal Communications Commission blocked the company’s service, saying it might interfere with civilian and military global- positioning-system navigation equipment. The Reston, Virginia- based company listed assets of $4.48 billion and debt of $2.29 billion.
Talks with creditors have been under way to reach a reorganization deal before LightSquared ran out of cash and hit an April 15 deadline on its operating loan. The company said at a Jan. 31 hearing that the ad-hoc lender group and Mast were among parties discussing whether there was an “alternative way” to exit Chapter 11.
A hearing on the plan is set for March 17.
The disclosure statement must be approved by the bankruptcy judge before the plan can be submitted to creditors for a vote.
The ad-hoc lenders previously proposed selling the LP unit to another vehicle linked to Ergen, L-Band Acquisition LLC, which had offered $2.22 billion in cash. LightSquared’s wireless spectrum would have complemented Ergen’s satellite-television business.
Mast had offered to buy the rest of the company’s airwaves in exchange for debt. Falcone’s Harbinger Capital Partners LLC was meanwhile trying to reorganize LightSquared as a stand- alone.
LightSquared sued Ergen and SP Special Opportunities LLC, an investment vehicle linked to him, for buying the company’s debt before L-Band made its $2.2 billion offer, claiming they sought to hijack the reorganization. L-Band has since sought to withdraw its offer. The judge hasn’t ruled on whether Ergen and SPSO improperly accumulated the LightSquared stake.
The case is In re LightSquared Inc., 12-bk-12080, U.S. Bankruptcy Court, Southern District of New York (Manhattan).