LIGHTSQUARED FILES FOR BANKRUPTCY.This has just been reported by Bloomberg.
Lightsquared, of course, is the wireless venture of hedge funder Phil Falcone whose fund, Harbinger Capital, owns 96% of the telecom company.
Falcone himself has put $3 billion into the company.
We saw this coming. Reuters reported earlier today that LightSquared was either going to have to come to an agreement with its investors and creditors over a $1.6 billion loan — this is the company’s second deadline extention. Their source said that bondholders were purposely making demands that they knew Falcone would not accept.
Falcone’s creditors are some tough customers too. Think legendary investor Carl Icahn and hedge fund Appaloosa Management’s David Tepper. Icahb recently sold a $250 million position in the company.
“From the start, it didn’t appear they weren’t negotiating in good faith. It seemed as if they were only interested in seeing if they could force Phil to hand them control of the company so they could flip it for a quick profit,” the source close the situation said.
LightSquared’s situation started looking bleak in February, when the FCC revoked the company’s permission to build a high-speed wireless network as tests found risks of interference with Global Positioning Systems.
LightSquared argued that it was the GPS’s systems that blead into LightSquared’s spectrum and not the other way around. The ambitious company had planned to expand wireless reach to 260 million Americans who do not have access.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.