Leap Wireless emerges from Chapter 11

By Jeff Pines

Washington, Aug. 17 - Leap Wireless International Inc. said it emerged from Chapter 11 Tuesday, reducing its debt burden by more than $2 billion.

"Our emergence from bankruptcy is not the finish line - it is the start of a new era for our company," said Bill Freeman, chief executive officer, in a news release. "Our focus going forward will be on continuing to strengthen our business through the development and implementation of new, customer-driven services that, over time, are expected to drive the growth of our business."

San Diego-based Leap's fifth amended reorganization plan is effective and the company is distributing new shares and $350 million of debt securities under the plan.

The reorganization plan calls for all of Leap's common stock, warrants and options to be cancelled. It will then issue 60 million new shares to two creditor classes. Senior secured vendor debt claims will get a share of 96.5% of the new stock and a share of the 13% senior secured notes due 2010. The notes will be guaranteed by Leap and issued by its subsidiary Cricket Communications Inc. For the first two years up to 12% of the interest can be paid in kind.

The Leap creditor trust will get the remaining 3.5% of the new common stock.

Leap filed for bankruptcy on April 13, 2003.

The company expects that its new common stock will be quoted for trading on the OTC Bulletin Board under the ticker symbol "LEAP" and eventually hopes to list the shares on the Nasdaq National Market system.

Leap's new board of directors includes: Wayne Barr Jr., senior managing director of Capital & Technology Advisors LLC; Dr. Rajendra Singh, co-founder of LCC International; Michael Targoff; founder and chief executive officer of Michael Targoff & Co.; and Gerald Stevens-Kittner, former senior vice president for legislative and regulatory affairs, CAI Wireless Systems Inc.

In addition, James Dondero, president and founder of Highland Capital Management LP; Dr. Mark Rachesky, president and founder of MHR Fund Management LLC; William Freeman, Leap's CEO; Glen Umetsu, Leap's chief operating officer; David Davis, Leap's senior vice president of operations; Robert Irving Jr., Leap's senior vice president and legal counsel; and Leonard Stephens, Leap's senior vice president for human resources, are also expected to join the board.

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