Philip Falcone, the tycoon behind ill-fated open access Long Term Evolution (LTE) provider LightSquared, is preparing to submit a reorganisation plan to a bankruptcy judge that would specifically block DISH Network’s Charlie Ergen from receiving compensation for his shares in the stricken company.
According to a report by the New York Post, citing unnamed sources, LightSquared founder Falcone is said to be mulling a reorganisation plan that would seek to compensate all creditors — except for Ergen.
If Falcone moves forward with the plan, he intends to argue before a bankruptcy judge that Ergen should not be compensated, as DISH is technically a competitor, and therefore in violation of LightSquared’s loan agreement that bans strategic buyers from owning its debt.
The Post adds that Ergen has quietly amassed more than half of LightSquared’s USD1.7 billion of secured loans through hedge fund firm Sound Point, but may yet find himself lumbered with a large portion of LightSquared’s debt without an obvious pay-off.
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