Falcone Mulling Bankruptcy For LightSquared

Apr 5 2012 | 12:21pm ET

Harbinger Capital Partners' Philip Falcone has changed his tune on a bankruptcy filing for the wireless Internet venture his hedge fund has backed with some $3 billion.

Falcone yesterday told Reuters that he is "seriously considering" a voluntary bankruptcy filing for LightSquared, among other options to save the troubled company. The Federal Communications Commission earlier this year said it would not approve the deployment of LightSquared's planned network, citing interference with global positioning systems.

Falcone has previously said that bankruptcy was "clearly not on our table."

LightSquared's troubles are to blame for a 47% loss for Harbinger, which has about 60% of its assets invested in the company, last year, and another 29.6% drop this year.

The company is mulling a lawsuit against the FCC to overturn its decision.

Falcone said that bankruptcy would not necessarily wipe out its shareholders, and would not hand full control to creditors, including Icahn Associates and Appaloosa Management, which, along with other debt holders, are considering a declaration of default against LightSquared. The Harbinger chief said that bankruptcy could help him salvage the company, adding that its share of the electromagnetic spectrum still retains value. He told Bloomberg News that, bankrupt or not, Harbinger will retain control of LightSquared.

"The rationale behind a voluntary filing is to complete the vision, to complete the plan to build the network and protect the company from the creditors who are more interested in a quick flip," he said.

"There are arguments that we would be better off in bankruptcy than not," Falcone told Bloomberg. "LightSquared, if I have to, I'll put it into bankruptcy. I don't care."

Well, he cares a little, noting that bankruptcy is "not what I want, not what I desire. I'd rather find a different way out."


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The profitable power of confluence

The trading world is inundated with strategies and techniques. Here’s one way traders can get a handle on information overload.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.