Friday, 1 August 2014
Last updated 7 hours ago
Apr 25 2012 | 2:13pm ET
If Philip Falcone hoped for help from some, but not all, of LightSquared's creditors as he battles to save the wireless Internet venture and maintain control of it, he'll be disappointed.
Creditors of the Harbinger Capital Management-backed company, including its biggest, have joined forces and hired a prominent bankruptcy lawyer to handle their negotiations with LightSquared. Among those who have jointly hired White & Case's Thomas Lauria are Appaloosa Management, Fortress Investment Group, Capital Research and Management, and Carl Icahn, whom Falcone wined and dined in March, hoping to make an ally and not an adversary.
LightSquared has until April 30 to renegotiate its loans with those creditors to stave off a default. Reuters reports that it is unclear whether a deal can be reached; Falcone has said he would consider a voluntary bankruptcy filing in an effort to hold onto LightSquared, in which Harbinger has invested more than half of its dwindling assets.
LightSquared's—and Harbinger's—troubles began to mount last year, and in February the Federal Communications Commission said it would not approve LightSquared's planned network, due to concerns about interference with global positioning systems.
LightSquared and Falcone have pledged to fight to FCC decision. The company tripled its lobbying spend in the first quarter, to $1 million. Among the company's lobbyists are former Pennsylvania Gov. Ed Rendell and former House of Representatives Majority Leader Richard Gephardt, both Democrats.