A section of LightSquared Inc.'s lenders are opposing the company's decision to seek a new financing arrangement as part of its plan to exit bankruptcy. This is the latest attack in a highly litigious case involving competing business interests.
According to Reuters, lenders including Minnesota-based US Bank and hedge fund MAST Capital Management LLC said on Monday that the new arrangement violates an earlier deal. The existing Debtor-In-Possession (DIP) order prohibited LightSquared from seeking alternative financing unless its creditors were first paid in full.
The lender group asked a federal court not to permit the new financing arrangement since LightSquared's existing obligations have not yet been paid in full, the report said.
In December, LightSquared proposed a new bankruptcy exit plan with financing from investment firm Fortress Investment Group LLC and other backers. The US wireless communications company is seeking to avoid a sale to highest bidder Dish Network Corp., Reuters said.
The new plan replaced one based on an auction of LightSquared's assets. LightSquared scrapped the sale after Dish emerged as the only qualified bidder, with a $2.2 billion offer, and terms that the broadband company found unappealing, the report said.
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