LightSquared Director Considers Bankruptcy

LightSquared may think it's too important to fail, but it's burning through cash as it works to get its network running. That's partly why Harbinger Capital Partners LP CEO Philip Falcone says he's seriously considering filing a voluntary bankruptcy for the flailing Long Term Evolution (LTE) wholesaler.

Falcone told Reuters on Wednesday that a voluntary Chapter 11 filing is one of the options he's considering for LightSquared, adding in a statement on Thursday that doing so would give it "necessary time to continue with our vision, build the network and protect the company from creditors who are more interested in a quick flip."

But, no decision has been made for the company yet, according to the hedge fund manager and majority owner.

Why this matters
LightSquared is running out of options to save its wholesale network as it's been thwarted by the Federal Communications Commission (FCC) , abandoned by key partner Sprint Corp. (NYSE: S) and subjected to shareholder wrath. The company is hanging by a thread, and bankruptcy -- voluntary or forced -- may end up being its only option.

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— Sarah Reedy, Senior Reporter, Light Reading Mobile

Pete Baldwin 12/5/2012 | 5:37:05 PM
re: LightSquared Director Considers Bankruptcy

Falcone has nothing to lose by admitting the obvious, I suppose. I'm having a hard time seeing the vision getting completed even after bankruptcy protection, though.

joanengebretson 12/5/2012 | 5:37:04 PM
re: LightSquared Director Considers Bankruptcy

Light Squared says if it does a bankruptcy, investors may not lose all the money they invested because the spectrum will still be worth something. But its questionable who would want it if it's not suitable for terrestrial use.

joset01 12/5/2012 | 5:37:02 PM
re: LightSquared Director Considers Bankruptcy

Worth something for satellite service I guess

DCITDave 12/5/2012 | 5:37:01 PM
re: LightSquared Director Considers Bankruptcy

Now that they don't have the ability to actually deliver service the way they intended, I'm also wondering what the business plan is now and what the investors are being told.

krishanguru143 12/5/2012 | 5:37:01 PM
re: LightSquared Director Considers Bankruptcy How exactly would bankruptcy protection help them? You still need a plan/business model. Bankruptcy wonGÇÖt help them because they have a failed business model. Depending on whom the creditors are, if any are equipment suppliers, who is to say they will be back after bankruptcy? If they are, it could be on a pre-pay basis, which does not help them either.

Maybe they should have asked Globalstar or Iridium about being in this game. For those that donGÇÖt know, they both have filed bankruptcy in the past. Maybe they need to look at some of the other satellite companies as well, like SiriusXM. The satellite business is a tough sector to be in and more often than not, bankruptcy is used.
krishanguru143 12/5/2012 | 5:37:00 PM
re: LightSquared Director Considers Bankruptcy

Maybe this is just smoke and mirrors, hoping that the FCC will change its mind or some other government entity coming to their rescue?  Not a very good plan, but their previous was even worse.

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