LightSquared Close To Bankruptcy Filing [Report]
LightSquared, Philip Falcone’s telecom start-up company, is reportedly close to bankruptcy, unless they can reach an agreement with creditors on a defaulted $1.6 billion loan.
The Chicago Tribune reports that the hedge fund manager is having problems coming to an agreement with creditors, and Falcone has until Monday at 5 p.m. EST to reach an agreement.
A source close to the situation stated:
“The bondholders are asking for conditions they know Harbinger and Phil cannot agree to.”
According to the New York Post, the telecom company’s board had planned a meeting on Sunday to discuss the possibility of authorizing a bankruptcy filing. If it comes, the Chapter 11 bankruptcy filing would most likely be announced before Monday evening.
LightSquared’s future was put in jeopardy in February, after the U.S. Federal Communications Commission revoke the company’s permission to build a high-speed network using satellites, after tests revealed the network interfered with Global Positioning Systems.
The commission considered the interference a hazard, as it included planes, and the GPS systems people use in cars.
According to the Chicago Tribune, the source added that:
“From the start, it didn’t appear they weren’t negotiating in good faith. It seemed as if they were only interested in seeing if they could force Phil to hand them control of the company so they could flip it for a quick profit…despite this feeling, Phil and the Harbinger team continue to try to see if there is some middle ground. But it appears only one side wants a deal.”
Some of LightSquared’s creditors have included hedge fund manager David Tepper, billionaire investor Carl Icahn and hedge funds including Fortress Investment Group, Knighthead Capital Management, Redwood Capital Management and investment firm Capital Research and Management Co.
check out more information about LightSquared here:
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