Friday, 29 July 2016
Last updated 25 min ago
Jul 24 2013 | 12:02pm ET
Creditors of Harbinger Capital Management's wireless Internet venture are backing a $2.2 billion offer from Dish Network Chairman Charlie Ergen.
A group of LightSquared lenders yesterday filed a competing reorganization plan for the bankrupt company, after LightSquared's window of exclusivity closed. The plan calls for Ergen to pay $2.2 billion for LightSquared's assets, including its share of the electromagnetic spectrum. LightSquared has been barred from using that spectrum for its planned Internet network due to concerns about interference with global positioning systems.
The proposal, which would repay in full LightSquared's $1.7 billion in bank debt, would leave Harbinger, which owns 96% of the company, with nothing.
Ergen's offer would serve as the lead bid in a Dec. 6 auction under the plan. But U.S Bankruptcy Judge Shelley Chapman expressed her anger than she was not given advanced notice of the plan.
"The level of my voice is not reflective of the level of my frustration," the judge said. She also expressed annoyance at a lawyer for Dish's LBAC, who insisted that that entity and a hedge fund controlled by Ergen be considered separately. LightSquared has sought to have that hedge fund, Sound Point Capital, barred from using its $1 billion in LightSquared debt, claiming that Ergen has used it to skirt a ban on Dish buying the debt.