Friday, 29 July 2016
Last updated 2 min ago
Sep 3 2013 | 12:08pm ET
LightSquared, the wireless Internet venture owned by Harbinger Capital Management, and its creditors have proposed competing sale plans for the bankrupt company's assets.
On Friday, LightSquared filed a proposed reorganization that would see it seek to sell its share of the electromagnetic spectrum. A day earlier, LightSquared's creditors, including a hedge fund owned by Dish Network Chairman Charles Ergen, suggested an auction—run by anybody but LightSquared—with Ergen's $2.2 billion bid as the lead offer.
LightSquared said its proposal was the "best, immediate option to use this spectrum for mobile broadband," a use that has been barred by the Federal Communications Commission, which fears interference with global-positioning systems. Reston, Va.-based LightSquared said it would continue to seek the FCC's permission to use the spectrum for wireless Internet or to swap for spectrum that would not cause interference.
The company's creditors, in their own plan, called into question LightSquared's "ability to run a fair and competitive auction," noting that Harbinger's fraud lawsuit against Ergen makes clear it hopes to keep control of the company. Harbinger alleges that Ergen fraudulently skirted rules barring LightSquared competitors—like Dish—from buying its debt.
The creditors also warned that, with the federal government planning to release more spectrum for use, the value of LightSquared's will only fall.