Speculation is high on the future of embattled telecom venture Lightsquared and its biggest investor Phil Falcone following news that the FCC plans on blocking the satellite wireless service because of its possible interference with GPS systems.
Falcone reportedly has around $3 billion invested in the venture, and many are curious what may happen to his hedge fund, Harbinger Capital, amid rumours that Lightsquared may soon run out of money as it lacks a revenue stream and must wait for an extended and unclear length of time for the GPS industry to update their devices so that Lightsquared’s satellite stream no longer interferes with its use.
Many have brought up the big B—bankruptcy, but Falcone has just distinguished that rumour with an email to Reuters, where he told them the option is “clearly not on our table.”
However, that bankruptcy decision may not be on Falcone’s hands. It is likely that the lack of FCC approval could be considered a “material adverse change,” which may allow LightSquared debt holders to force the company into bankruptcy, Tim Farrar, a telecommunications consultant who has been following the LightSquared situation, told Business Insider last month.
Then again, given all the racket that Falcone and Lightsquared have made with letters to Senator Charles Grassleu (R-IA) confronting his allegations about their operations and public conference calls, seems like they won’t be going down without a fight.