LightSquared Seeks $121M in DIP Financing

Lightsquared Inc. has asked a New York bankruptcy court to approve $120.6 million in post-petition financing during its drawn-out bankruptcy battle, according to documents filed Monday.

Lightsquared and its affiliates, as debtors and debtors in possession, presented a proposed order to U.S. Bankruptcy Judge Shelley C. Chapman on Monday for a sixth replacement senior secured secured post-petition financing to the debtors’ affiliate Lightsquared LP.

The lenders would provide $120.6 million in post-petition financing, up from the $97.3 million in the fifth post-petition facility, according to a loan scheduled filed with the court.

The debtors argue they are in need of post-petition financing since they have been funding the business and the Chapter 11 bankruptcy cases through the use of prepetition collateral and proceeds of a fifth replacement LP DIP facility, according to the proposed order.

The lenders include Capital Research and Management Co., Cyrus Capital Partners LP, Intermarket Corp., Solus Alternative Asset Management LP, Fortress Credit Corp, Aurelius Capital Management LP and SP Special Opportunities LLC.

LightSquared fell into Chapter 11 once the Federal Communications Commission declined to approve its wireless network.

Earlier this month, controlling equity holder Harbinger Capital Partners LLC offered up a bankruptcy exit plan to split the wireless venture in two and reorganize each estate separately, a break from the debtor’s plan to stay unified.

The emergence of the competing plans dashed hopes of a global resolution that seemed in reach when LightSquared announced an agreement in principle last month with Dish Network Corp. Chairman Charlie Ergen, its largest prepetition secured creditor and most vocal opponent throughout the bankruptcy.

The new Harbinger-sponsored plan applies only to the debtor’s so-called Inc. estate, which is distinct from and has different lenders than the LightSquared LP unit where most of its valuable spectrum assets reside.

In its own reorganization plan, LightSquared and a group of LP lenders envisioned keeping the estates consolidated, in line with their long-held view that doing so will yield the most value for creditors. A third plan may yet emerge from Mast Capital Management LLC, a creditor in the Inc. estate.

LightSquared is represented by Matthew S. Barr, Alan J. Stone, Michael L. Hirschfeld and Andrew M. Leblanc of Milbank Tweed Hadley & McCloy LLP.

Harbinger is represented by David M. Friedman, Adam L. Shiff, Daniel A. Fliman and Matthew B. Stein of Kasowitz Benson Torres & Friedman LLP.

Ergen and SPSO are represented by Rachel Strickland, James C. Dugan and Matthew Freimuth of Willkie Farr & Gallagher LLP.

The LightSquared special committee is represented by James H.M. Sprayregen, Paul M. Basta and Joshua A. Sussberg of Kirkland & Ellis LLP.

The case is In re: LightSquared Inc., case number 1:12-bk-12080, in the U.S. Bankruptcy Court for the Southern District of New York.

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