LightSquared Continues to Incur Huge Losses Since It Filed for Bankruptcy

by San Antonio Attorney

LightSquared has reported $51.4 million in losses for the month of July, which brings its losses to a total of $1.51 billion since it filed for bankruptcy in May 2012.

According to papers filed in the U.S. Bankruptcy Court in Manhattan, LightSquared again associated the majority of the losses to its debt’s interest payments. In July alone, the interest was $39.4 million. Since it filed for Chapter 11 bankruptcy, the company has incurred $903.8 million in interests of its debt.

The reorganization case has also caused more losses as LightSquared deals with another crucial moment. It has recently filed a restructuring plan which the creditors don’t approve of. LightSquared must get the support from at least two-thirds majority of its Chapter 11 impaired creditors.

If the plan gets approved, Philip Falcone will no longer be the owner of LightSquared. The company will need $500 million to finance the bankruptcy plan.

Philip Falcone, along with four other people designated to the board by his Harbinger Capital Partners, resigned from LightSquared Inc. in June. He had been fighting to maintain control of the business ever since the bankruptcy case started two years ago. Dish Network Corp. Chairman Charles Ergen had offered to buy its assets for $2.22 billion, but then he decided at the last minute not to proceed with the acquisition.

In May, a restructuring proposal backed by Falcone was rejected by U.S. Bankruptcy Judge Shelley Chapman, saying it was not fair to Ergen, although she also found fault in Ergen’s behavior. After that, the company and its creditors have entered court-supervised mediation to come up with a new plan.

LightSquared is based in Reston, Virginia. It filed for Chapter 11 bankruptcy in 2012 after the Federal Communications Commission blocked its proposal on mobile device services, because it might interfere with GPS navigation equipment.

Leave a Comment

Previous post:

Next post: