On Friday, LightSquared Inc told a judge during a hearing in the U.S. Bankruptcy Court in New York that it has entered into a agreement with its creditors regarding a plan to restructure the firm's wireless assets and emerge from bankruptcy. The wireless company owned by Phil Falcone's Harbinger Capital Partners is attempting to bridge disagreements among the contents of three, separate proposals about the company's reorganization, said Paul Basta. Basta, a lawyer, is associated with a special committee that oversee LightSquared's restructuring.
According to a Reuters report, the talks between LightSquared and its creditors have not yet involved the representatives for Dish Network Corp Chairman Charles Ergen. Ergen's holdings, said the news agency, had made him LightSquared's biggest single creditor. In a separate lawsuit, LightSquared claimed that Ergen bought up the company debt in order to attempt a takeover of the company via its key competitor, Dish. At the moment, Reuters said the trial regarding the matter is still ongoing.
Basta disclosed to Reuters that Ergen could be included in the talks as it progresses. Last year, Dish offered LightSquared $2.2 billion for its valuable spectrum assets, but withdrew the offer the morning when trial about the takeover attempt had started, which was earlier this month.
Also on Friday, Lightsquared was granted to postpone an originally scheduled agenda, which was regarding a $33 million loan as a transitional fund for LightSquared to survive during bankruptcy. According to LightSquared attorney Matthew Barr, final terms of the loan have yet to be reached. Discussion about the debtor-in-possession loan will resume on February 4, Reuters said.
Looking at the budget of LightSquared, the company direly need the proceeds of the financing before March, as the company will be running out of cash by than. Reuters added that the fresh funds will allow the company to operate until the end of the first quarter. According to the disclosures in court filings, LightSquared is expecting the confirmation process for the restructuring plan to extend all the way to March this year.
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