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LightSquared has reached an agreement over a bankruptcy loan from a group of lenders and intends to continue to fight for millions more, the Dow Jones news service reported.
After declaring bankruptcy last month, the company negotiated with a group of hedge funds holding more than $1 billion of LightSquared’s debt. The lenders want “severe restrictions” placed on $190 million of cash LightSquared would like to use to hold itself up during bankruptcy, according to Dow Jones.
LightSquared intended to be a neutral wholesale provider of 4G LTE service, giving companies an alternative partner for super-fast wireless service. But concerns that the proposed wireless network would interfere with critical global-positioning-system equipment led to the company’s downfall.
The terms from the negotiation include a strict monthly budget of how the cash would be used, liens on LightSquared’s assets, and have LightSquared paying the lenders’ legal fees and monthly interest on the loans. Additionally, the lenders want to see if they can pursue claims against company backer Phil Falcone and his hedge-fund firm, Harbinger Capital Partners, which controls the company’s equity.
Weeks after the the Federal Communications Commission suspended LightSquared’s waiver to use the spectrum, Falcone stepped aside to help the company avoid defaulting on its debt.
LightSquared’s lawyer told Dow Jones that he plans to file the details of another loan negotiated with U.S. Bancorp, which represents a different group of the company’s prebankruptcy lenders that hold more than $320 million in loans secured by the company’s leases on the wireless spectrum.
