Nothing Unfair About Restructuring Plan, LightSquared Says

Apr 15 2014 | 12:21pm ET

Harbinger Capital Partners' wireless internet venture continued to insist it had no obligation to negotiate with its largest creditor, since, it says, he had no business being a creditor at all.

LightSquared, seeking approval of a $2.65 billion bankruptcy exit plan, wants to pay most creditors in cash. But Dish Network founder Charles Ergen would get only third-lien notes payable over seven years, treatment he argues is unfar.

LightSquared and Harbinger founder Philip Falcone have shot back that Ergen illegally bought the nearly $1 billion in debt, in contravention of covenants barring competitors from owning it. Backed by Ergen, Dish had sought to buy LightSquared out of bankruptcy, a bid it later dropped.

"There is simply no doubt that [Ergen] is receiving the indubitable equivalent of its claim," LightSquared wrote in a court filing. Ergen's response is expected later this month.

LightSquared has said its reorganization plan, backed by Fortress Investment Group, will fail if Ergen's claims are not disallowed. Last week, it won the right to borrow another $74 million from its lenders—including a hedge fund controlled by Ergen—to stave off collapse as it waits for approval of its plans.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of