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Wholesale Wireless Service Provider LightSquared Files For Bankruptcy

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Thing have looked grim for upstart wireless service provider LightSquared ever since the FCC officially withdrew their conditional approval to build out the terrestrial part of their LTE network, and now it seems like it may all come to an end.

After the demise of their partnership with Sprint, the resignation of CEO Sanjiv Ahuja, and the laying off of nearly 45% of their employees, Bloomberg reports that the Virginia-based company has just filed for Chapter 11 bankruptcy today.

For those who haven’t followed the entire sordid series of events, LightSquared was formed in 2010 with the intention of creating a wholesale 4G LTE network that other companies could tap into or resell as they desired. They hoped that they would be able to cover somewhere 260 million people in the United States once the network had gone live, but persistent issues like interference with GPS and regulatory headaches meant the service was never able to make it off the ground.

The news doesn’t come as much of a shock considering that LightSquared backer Philip Falcone admitted to considering filling for bankruptcy back in April, but the company has since been issued a few stays of execution from their lenders in an attempt to give them enough space to turn things around.

The company noted that they had assets and debts in excess of $1 billion each, but The Verge got their hands on LightSquared’s bankruptcy filing, in which the company breaks it down a bit further. Among the most highly-owed creditors are Boeing Satellite Systems and and Alcatel-Lucent, who are owed $7.5 million and $7.3 million respectively.

As always though, LightSquared is putting a brave face on. CFO Marc Montagner said in a statement that 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,” though it’s tough to imagine how much more headway they can make in this condition. What strikes me as more likely though is that LightSquared will have to liquidate all the assets and sell off their spectrum holdings (perhaps to Dish), and I imagine we won’t have to wait long to see what happens next.



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Chris Velazco

May 14th

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LightSquared files for Chapter 11 bankruptcy

Lightsquared Bankruptcy

LightSquared on Monday filed for Chapter 11 bankruptcy after its planned high-speed wireless network was derailed by regulators, Bloomberg reported. The company’s data network would have covered as many as 260 million users, however it failed to gain approval from federal regulators. The FCC blocked LightSquared’s LTE network in February due to concerns surrounding interference with GPS systems. Through his hedge fund Harbinger Capital Partners, LightSquared founder Phillip Falcone has invested roughly $3 billion in the failed venture. According to the bankruptcy filings, LightSquared has more than $1 billion of debt and assets.

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Dan Graziano

May 14th

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LightSquared officially files for Chapter 11 bankruptcy

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As expected, May 14th is indeed a dark day for LightSquared. The company has just filed paperwork in order to initiate Chapter 11 bankruptcy proceedings in Manhattan's US Bankruptcy Court, effectively killing its dream of providing a high-speed mobile wireless network to upwards of 260 million people. Not quite a year after Sprint and LightSquared put together an agreement that would ensure 15 years of blissful LTE enjoyment together, Philip Falcone's baby looks weaker than ever. With the Sprint tie-up now void, and over $1.6 billion in debt, there's probably not too many places for LS to turn. The primary hurdle -- one it never could seem to overcome -- was the FCC's outright refusal to believe any of the company's mitigation proposals in relation to GPS interference issues. Despite "profoundly disagreeing" and raising all sorts of chaos in an effort to get its way, LightSquared never did manage to convince the powers that mattered. Where it turns from here is anyone's guess, but it won't be a quiet fall from grace, we're surmising.

LightSquared officially files for Chapter 11 bankruptcy originally appeared on Engadget on Mon, 14 May 2012 14:24:00 EDT. Please see our terms for use of feeds.

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Darren Murph

May 14th

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WSJ: LightSquared ‘preparing’ for bankruptcy protection filing, final decision coming tomorrow

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Can't say it's striking us as any sort of surprise, but the seemingly destined-to-fail LightSquared just might be out of options. After getting a high-five from Sprint and plenty of attention for its initiatives in bringing yet another wireless option to America, those blasted GPS interference issues (or "supposed" issues, depending on who you ask) eventually became too much to overcome. According to a breaking report out of The Wall Street Journal, Philip Falcone's venture is seriously teetering on the edge of bankruptcy, as "negotiations with lenders to avoid a potential default faltered," according to the ever-present "people familiar with the matter." Purportedly, the two sides have until 5PM tomorrow to strike a deal that'll keep the firm out of bankruptcy court (if you'll recall, it owes over $1.6 billion dollars to various entities), but given just how far apart these sides remain, its fate seems all but sealed. We'll be keeping an ear to the ground for more, but don't go placing bets on yet another debt-term violation waiver.

WSJ: LightSquared 'preparing' for bankruptcy protection filing, final decision coming tomorrow originally appeared on Engadget on Sun, 13 May 2012 11:11:00 EDT. Please see our terms for use of feeds.

Permalink   |  sourceThe Wall Street Journal  | Email this | Comments

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Darren Murph

May 13th

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Carl Icahn unloads his LightSquared debt, creditor talks trudge on

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Carl Icahn is no stranger in this field -- he's been caught tussling with Motorola and bidding Yahoo's board adieu in recent years -- and most recently, he's managed to get caught up in one of the bigger wireless whirlwinds this planet has ever seen. Just months after Icahn swooped in to buy some $250 million in company debt at around 40 cents on the dollar, he has managed to offload that very chunk for 60 cents on the dollar. Not surprisingly, his cash coffers are growing in turn, despite LightSquared's position as a whole looking only marginally less bleak. According to a Reuters report, creditors have agreed to another week-long extension (until May 14th) in order to talk things over with head honcho Philip Falcone. As of now, the startup has around $1.6 billion in debt, and while talks may delay the pain, we're still not getting the impression that the FCC (or anyone else, really) is warming to its propositions. Then again, maybe Facebook can just buy it in an act of charity prior to its IPO.

Carl Icahn unloads his LightSquared debt, creditor talks trudge on originally appeared on Engadget on Wed, 09 May 2012 03:11:00 EDT. Please see our terms for use of feeds.

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Darren Murph

May 9th

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RIM appoints new marketing, operating execs

RIM appoints new CMO and COO

Research In Motion on Tuesday named two new executives as the shake-up atop its organization continues. Recently-appointed chief executive officer Thorsten Heins said during his first day on the job that finding a new marketing boss and making drastic changes to the company’s marketing strategy were top priorities for the struggling smartphone maker. While the company’s marketing efforts have yet to pay off — though it does seem to be trying new things, at least — a new chief marketing officer has now been named. Frank Boulben, former executive vice president of strategy, marketing and sales for LightSquared, has been appointed CMO effective immediately, and joining him is new chief operating officer, Kristian Tear, who comes from Sony Mobile where he was the company’s executive vice president. “Kristian and Frank bring extensive knowledge of the rapidly changing wireless global market and will help RIM as we sharpen our focus on delivering long-term value to our stakeholders,” RIM CEO Thorsten Heins said in a statement. “Most importantly, both Kristian and Frank possess a keen understanding of the emerging trends in mobile communications and computing.”

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Zach Epstein

May 8th

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LightSquared considering bankruptcy after being derailed by regulators

LightSquared founder Phillip Falcone said he may consider voluntary bankruptcy for his troubled wireless broadband venture, Bloomberg reported on Wednesday. “There are arguments that we would be better off in bankruptcy than not,” Falcone said. “LightSquared, if I have to, I’ll put it into bankruptcy. I don’t care,” adding that he would maintain control of the company if it were to file. LightSquared planned to build a high-speed data network that would cover as many as 260 million users, however it failed to gain approval from federal regulators. The FCC blocked LightSquared’s LTE network in February due to concerns surrounding interference with GPS systems. Through his hedge fund Harbinger Capital Partners, Falcone has invested roughly $3 billion in the failed venture. Bankruptcy is “not what I want, not what I desire, I’d rather find a different way out,” he said.

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Dan Graziano

April 6th

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Dish Network’s spectrum should avoid GPS issues suffered by LightSquared, analysts say

Philip Falcone’s startup LightSquared planned to deploy a nationwide 4G LTE network in the United States. The firm’s service was found to cause interference with spectrum used by various GPS navigation and tracking solutions, however, forcing the Federal Communications Commission to block the network’s launch. Dish Network is looking to build a similar network and is currently awaiting government approval. Executives and analysts have said that Dish will probably avoid the interference concerns that killed LightSquared’s network, Bloomberg reported on Monday. The satellite company’s frequencies, which are above 2GHz, are far away from those used by GPS devices and Lightsquared’s 1600Mhz band, and are less likely to interfere. “It’s not as close to GPS, so it’s unlikely to interfere,” said Matthew Desch, chief executive officer of Iridium Communications, which operates more than 60 satellites. “But the approval is going to take some time. The FCC is going to make sure they don’t have another LightSquared problem on their hands.” Bryan Kraft, an analyst at Evercore Partners, believes that Dish will gain FCC approval in 6 to 12 months.

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Dan Graziano

March 20th

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Sprint officially ends agreement with LightSquared

Sprint on Friday announced that it has terminated its agreement with LightSquared. The two companies agreed last June to an 11-year deal that would share network expansion costs and equipment if LightSquared could secure regulatory approval for its 4G LTE network build-out. “Sprint has been and continues to be supportive of LightSquared’s business plans and appreciates the company’s efforts to find a resolution to the interference issues impacting its ability to offer service on the 1.6 GHz spectrum,” the company said in a press release. “However, due to these unresolved issues, and subject to the provisions of the agreement, Sprint has elected to exercise its right to terminate the agreement announced last summer. We remain open to considering future spectrum hosting agreements with LightSquared, should they resolve these interference issues, as well as other interested spectrum holders.”  The FCC blocked LightSquared’s LTE network in February due to concerns that it was interfering with GPS systems. Sprint then gave the company until March 15th to gain approval — which it did not. “Per the terms of the agreement, Sprint has returned $65 million in prepayments LightSquared made to cover costs that were not ultimately incurred by Sprint,” the company said. Read on for Sprint’s press release.

Sprint Elects to Terminate Spectrum Hosting Agreement with LightSquared

OVERLAND PARK, Kan. (BUSINESS WIRE), March 16, 2012 – Sprint (NYSE: S) today issued the following statement regarding the spectrum hosting agreement it signed with LightSquared in June 2011. Per the agreement, Sprint agreed to deploy and operate an LTE network capable of utilizing the 1.6 GHz spectrum licensed to or available to LightSquared. The agreement contained contingencies related to possible interference issues with LightSquared’s spectrum, including Sprint’s right to terminate the agreement if certain conditions were not met by LightSquared.

“Sprint has been and continues to be supportive of LightSquared’s business plans and appreciates the company’s efforts to find a resolution to the interference issues impacting its ability to offer service on the 1.6 GHz spectrum. However, due to these unresolved issues, and subject to the provisions of the agreement, Sprint has elected to exercise its right to terminate the agreement announced last summer. We remain open to considering future spectrum hosting agreements with LightSquared, should they resolve these interference issues, as well as other interested spectrum holders.

“Late last year, both companies agreed to halt deployment design and implementation of LightSquared’s network to ensure that Sprint’s Network Vision project remained on schedule. While unfortunate, termination of the agreement will have no impact on Sprint’s current customers and is not material to Sprint’s ongoing business operations. Network Vision remains on schedule and on budget, and we look forward to begin launching our 4G LTE network mid-year.

“Per the terms of the agreement, Sprint has returned $65 million in prepayments LightSquared made to cover costs that were not ultimately incurred by Sprint.”

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Dan Graziano

March 16th

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Sprint Officially Kills LightSquared Deal, Returns $65M In Prepayments

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It only seemed like a matter of time before things got worse for LightSquared, and today the nation’s third largest wireless carrier has dealt the ailing company another significant blow. With the upstart network provider unable to land FCC approval thanks to some pesky GPS interference issues, Sprint has announced that they have chosen to officially terminate their agreement with LightSquared.

Sprint noted that they would still be open to future collaborations so long as LightSquared could get their wireless affairs in order. That still seems like a tall order at this point — little movement has been made on that front since the FCC revoked their conditional approval of LightSquared’s network buildout earlier this year.

Still, it looks like LightSquared has some fight left in them yet. As a result of the agreement, Sprint must return the $65 million given to them by LightSquared as part of the 11-year payment plan the two companies agreed upon in mid-2011. Though Sprint certainly could’ve used the cash, LightSquared arguably needs it far more — they recently had to lay off 45% of their workforce to reduce operating costs, and the company is the midst of preparing to mount a legal offensive.

Politico reported earlier this week that LightSquared now has two “prominent conservative litigators” — Theodore Olson and Eugene Scalia — on retainer, which hints at a potential legal battle with the FCC in the near future. Though their specific legal strategy is still shrouded in mystery, LightSquared spokesperson Terry Neal notes that the two “have extensive experience assisting clients with significant challenges involving government agencies,” and that the company is pleased to have them on their side. Those of you itching for a good old-fashioned legal throwdown may want to keep your eyes on LightSquared — things look bad for them now, but they sure do love a fight.



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Chris Velazco

March 16th

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