Charlie Ergen will get 60 per cent of new restructured equity in wireless company LightSquared, currently in Chapter 11, according to a deal agreed in the US Bankruptcy Court has announced.
LightSquared is the somewhat troubled wireless business looking to develop a US 4G system that’s backed and integrated with satellite coverage. However, back in February 2012 the concept was barred from moving forward by the Federal Communications Commission (FCC) because of concerns over interference with GPS reception. The company declared Chapter 11 bankruptcy protection in May 2012.
JP Morgan Chase, a lender to LightSquared, will end up with 31.9 per cent of the restructured business.
LightSquared was backed by Harbinger Capital Partners and has control over key L-band frequencies (1525-1559 MHz). Controversially, it has been alleged that Philip Falcone, of Harbinger, made campaign donations to President Obama and which resulted in favourable treatment. Falcone has not accepted the Bankruptcy Court’s findings and is reportedly expected to fight the ruling.
LightSquared has a co-operation agreement with Inmarsat, but has missed payments for the spectrum used.