Hedge fund manager Philip Falcone is "seriously considering" filing a voluntary bankruptcy petition for LightSquared, the operator majority owned by his company Harbinger Capital Partners. Falcone told Reuters in an interview that a bankruptcy is one of several options he is considering as he tries to find a way to salvage the company and keep its creditors at bay. Two people familiar with the situation said LightSquared's creditors, which include hedge funds led by Carl Icahn and David Tepper, are considering whether to declare the company to be in default on a USD 1.6 billion loan. It has also missed payments to satellite operator Inmarsat, due as part of their spectrum-sharing agreement. Falcone said a bankruptcy would allow the company time to find a way to deal with interference issues that have arisen with the planned buildout of LightSquared's nationwide LTE network. The interference from its spectrum on GPS devices led to the FCC withdrawing preliminary approval for the network roll-out. Falcone said a bankruptcy would not necessarily wipe out the equity holders of LightSquared because the spectrum it owns retains value. Falcone's own USD 4 billion hedge fund has sunk roughly 60 percent of its money into the operator. Some of the hedge fund creditors have told Falcone he has until the end of the month to strike a deal or they might move to force the company into bankruptcy, Reuters' sources said.
