Harbinger knocks Dish's bid for LightSquared's spectrum
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[January 04, 2014]
By Nick Brown
NEW YORK (Reuters) — Phil Falcone's
Harbinger Capital Partners, which controls bankrupt satellite
company LightSquared, has asked a judge to reject a takeover effort
by Dish Network Corp, saying its $2.2 billion bid for a chunk of
LightSquared's spectrum is a "Trojan horse".
In a court filing on Thursday, Harbinger said the bid undervalues
LightSquared's assets, laying out its opposition to the takeover
ahead of a hearing scheduled for next Thursday in the U.S.
Bankruptcy Court in Manhattan.
In a separate filing, LightSquared itself also called for the
rejection of the Dish plan, calling it a "short-sighted" liquidation
that benefits only its proponents.
The filings are the latest salvoes in a fierce battle for
LightSquared's wireless spectrum. The company is fending off the
Dish bid while it pursues a standalone restructuring under which it
would receive $2.75 billion in fresh loans and at least $1.25
billion in equity investment from private equity firms Fortress and
Melody Capital Advisors LLC, as well as JPMorgan Chase & Co and
But that plan is contingent on LightSquared obtaining certain
regulatory approvals, while Dish's competing takeover bid is not.
In Thursday's filing, Harbinger said Dish's bid was priced only high
enough to gain the support of a class of creditors that Dish already
controls. That accusation echoes a separate lawsuit filed by
Harbinger in August accusing Dish of unlawfully buying up huge
chunks of LightSquared debt in an effort to control the company's
Falcone, through LightSquared, had planned to create a terrestrial
wireless network, but was forced to put LightSquared in bankruptcy
in May of 2012 after the Federal Communications Commission blocked
the plan over fears of interference with GPS navigation.
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The Chapter 11 filing was meant to provide a "breathing spell" while
LightSquared worked to regain regulatory approval, a reality that is
now "within reach," it said in Thursday's filing. The Fortress-led
standalone plan would allow that to happen, while Dish's bid would
simply keep LightSquared's assets tied up in bankruptcy until Dish
decided how it wanted to use them, Harbinger said.
Dish will present its plan at Thursday's hearing.
Proponents of the standalone plan will make their case on Jan.
21. Judge Shelley Chapman, who is overseeing LightSquared's
bankruptcy, will then decide between the competing proposals.
(Reporting by Nick Brown; editing by
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