By Jacqueline Palank
Of DOW JONES DAILY BANKRUPTCY REVIEW
LightSquared Inc. filed for Chapter 11 bankruptcy protection Monday afternoon, hours ahead of the expiration of a deal to keep hedge-fund manager Philip Falcone's venture from defaulting on its debt.
LightSquared reported assets and debts each exceeding $1 billion, according to the petition it filed with the U.S. Bankruptcy Court in Manhattan.
The Wall Street Journal reported that LightSquared, which sought to build a high-speed wireless broadband network, was preparing for bankruptcy even as it negotiated with its lenders to avoid defaulting upon the expiration of a forbearance agreement Monday at 5 p.m.
Falcone, who couldn't immediately be reached for comment Monday, and his hedge fund Harbinger Capital Partners were LightSquared's main backer, investing billions of dollars into a venture that sought to compete with communications heavyweights like AT&T Inc. (T) and Verizon Wireless. But efforts to build a national network stalled as federal regulators argued the network would interfere with Global Positioning System signals.
In its bankruptcy petition, LightSquared listed Boeing Satellite Systems Inc. as its biggest unsecured creditor, with a disputed $7.5 million claim, followed by Alcatel-Lucent (ALU), with a $7.3 million disputed claim.
The Chapter 11 case, numbered 12-12080, has been assigned to Judge Shelley C. Chapman.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com )
-By Jacqueline Palank, Dow Jones Newswires; 202-862-6615; firstname.lastname@example.org
(Greg Bensinger and Mike Spector contributed to this article.)