Tuesday, 31 May 2016
Last updated 3 days ago
Jun 19 2014 | 12:37pm ET
Harbinger Capital Partners founder Philip Falcone has resigned from the board of directors at the bankrupt wireless Internet venture owned by his hedge fund, indicating that a deal with creditors may be in the offing.
Falcone and four other Harbinger representatives voluntarily left LightSquared’s board on June 12, the company told the Federal Communications Commission. Falcone had previously resisted efforts to force him from the board of a company in which he had invested nearly $3 billion in client assets.
LightSquared has been burning cash since a federal bankruptcy judge rejected its proposed bankruptcy exit plan, backed by Fortress Investment Group. The judge said that the proposal was unfair to LightSquared’s largest creditor, Dish Network founder Charles Ergen, who she said had acted improperly buying up the company’s debt in contravention of covenants barring competitors from its capital structure.