LightSquared Inc. filed for Chapter 11 bankruptcy protection Monday, hours ahead of the expiration of a deal to keep hedge fund manager Philip Falcone's venture from defaulting on its debt.
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LightSquared reported assets and debts each exceeding $1 billion, according to the petition it filed with the US Bankruptcy Court in Manhattan.
The company, 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 5:00pm local time.
Falcone, who couldn't immediately be reached for comment Monday, and his hedge fund, Harbinger Capital Partners, were LightSquared's main backers, investing billions of dollars into a venture that sought to compete with communications heavyweights like AT&T Inc. and Verizon Wireless. But efforts to build a national network stalled as federal regulators argued the network would interfere with GPS 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, with a $7.3-million disputed claim.