Judge Approves LightSquared's Restructuring Proposal

By Joseph Checkler and Tom Corrigan 

A judge on Thursday approved the restructuring plan of LightSquared, an elusive milestone for Philip Falcone's ambitious wireless venture that went bankrupt nearly three years ago.

U.S. Bankruptcy Judge Shelley C. Chapman said the latest version of the proposal, which pays off Dish Network's Charlie Ergen, the venture's top lender, in cash and puts LightSquared in the hands of investors including Fortress Investment Group LLC and Centerbridge Partners, was fair to creditors.

When the plan becomes effective. LightSquared will be owned by investors including Centerbridge, Fortress and a unit of J.P. Morgan Chase & Co. Mr. Falcone and his Harbinger Capital Partners will keep more than 44% of the equity, although Harbinger won't have a say in day-to-day operations.

Solus Alternative Asset Management LP and Cerberus Capital Management LP, which had presented a rival restructuring plan, dropped their opposition to the LightSquared plan after LightSquared agreed to buy back their preferred stock and debt. Resolving the objections will cost LightSquared about $15 million fees and expenses, a lawyer for LightSquared said at the hearing.

LightSquared filed for Chapter 11 in May 2012, shortly after federal regulators refused to clear LightSquared's plans to launch its wireless network. Those regulators heeded warnings from the GPS industry that the network could interfere with GPS.

Write to Joseph Checkler at [e-mail]

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