LightSquared has filed for bankruptcy under Chapter 11.
The wireless network based on mobile-satellite technology that was found to overpower GPS navigation signals made the filing in U.S. Bankruptcy Court in Manhattan May 14. The filing came two weeks after LightSquared negotiated an extension for making a payment on its debt. LightSquared won a second extension last week, and was hours from defaulting when it filed bankruptcy, said a news report.
LightSquared filed to restructure under Chapter 11 “to give it time to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network,” LightSquared said in a news release posted on the venture’s home page.
“The company fully expects to continue normal operations throughout this process,” the company said in a statement attributed to Marc Montagner, interim co-chief operating officer and chief financial officer. He described the filing as voluntary, and “intended to give LightSquared sufficient breathing room to continue working through the regulatory process.”
AOPA reported April 5 that the specter of bankruptcy loomed for LightSquared after its investors, who suffered big losses in 2011, took another hit in February when the Federal Communications Commission revoked LightSquared’s conditional approval to proceed with building the network. The FCC’s decision was based on an expert panel’s evaluation of tests showing that the network’s adverse impact on GPS could not be resolved with existing technology--nor was a future solution seen emerging.
AOPA, long concerned about the network’s implications for aviation safety, was a participant in the FCC’s review, and is a member of the multi-industry Coalition to Save Our GPS.
LightSquared said it expected to work with “all key constituents” for an orderly restructuring and to maximize the value of its assets. Those include the frequencies of spectrum near GPS in which the mobile-satellite network would have operated.
Current management was to continue to lead the company through the bankruptcy process.
LightSquared is backed by Philip Falcone, whose hedge fund Harbinger Capital Partners was the largest investor in the communications venture, and who some of LightSquared’s debt holders had pressured to step aside after the FCC halted the network, said published reports in the financial press. Falcone joined the company’s board after LightSquared CEO Sanjiv Ahuja resigned Feb. 28.
A proceeding related to the bankruptcy in Canada was filed in Toronto, LightSquared said.
