LightSquared Implements Chapter 11 Restructuring
LightSquared announced that it commenced voluntarily reorganization cases under Chapter 11 of the U.S. Bankruptcy Code to give it time to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. The company will also file a recognition proceeding in Canada.
According to a Wall Street Journal article, the company filed for bankruptcy after it was unable to reach a deal with its lenders to default on its loan. Harbinger Capital Partners is the company’s main lender along with Appaloosa Management and Capital Research & Management.
The company said in a press release that it fully expects to continue normal operations throughout this process. All LightSquared distribution partners and customers, including public safety, emergency response, government and military users of LightSquared’s satellite-based communications services can continue to rely on LightSquared to provide them with mission critical communications services.
“The filing was necessary to preserve the value of our business and to ensure continued operations. The voluntary Chapter 11 filing is intended to give LightSquared sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network,” said Marc Montagner, interim co-chief operating officer and chief financial officer of LightSquared. “All of our efforts are focused on concluding this process in an efficient and successful manner.”
LightSquared intends to work with all key constituents to conduct an orderly restructuring process to maximize its asset value and to exit Chapter 11 in the quickest and most efficient manner possible.
LightSquared expects that its current management team will continue to lead the company throughout this process. The filing was made in the U.S. Bankruptcy Court for the Southern District of New York and the recognition proceeding will be filed in the Superior Court of Justice in Toronto, Ontario.
LightSquared is a mobile communications provider currently serving government customers, public safety, and the commercial transport and logistics industries.