LightSquared files for bankruptcy following failed wireless venture
LightSquared has filed for Chapter 11 bankruptcy protection, after its plans for a national wholesale mobile network were scuppered over concerns about mobile interference.
The company will carry on operating its satellite-based mobile service while it has one more shot at persuading regulatory authorities to allow it to build the integrated satellite 4G wireless network after all.
"The filing was necessary to preserve the value of our business and to ensure continued operations. 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," says Marc Montagner, interim co-chief operating officer and chief financial officer of LightSquared.
"All of our efforts are focused on concluding this process in an efficient and successful manner."
LightSquared, 96 percent-owned by hedge fund manager Philip Falcone's Harbinger Capital Partners, has been in a limbo since February, when the Federal Communications Commission barred it from proceeding with its network.
Tests carried out by the National Telecommunications and Information Administration indicated that the network, if implemented, would interfere with the GPS systems used by navigation gear, including within the military.
LightSquared has argued that the tests were flawed. But with the FCC unlikely to agree, its best hope now is for a spectrum swap, giving it another band with no danger of interference with GPS systems.
Alternatively, some observers have suggested a savior for the company in the form of satellite TV operator Dish Network, which is hoping to start up an LTE network using a less controversial spectrum band. LightSquared's spectrum could then be used as an uplink band.
The filing was made in the US Bankruptcy Court for the Southern District of New York.