Four LightSquared disclosures approved; confirmation hearing Dec. 10

By Caroline Salls

Pittsburgh, Oct. 10 - Disclosure statements for four competing reorganization plans filed in LightSquared Inc.'s Chapter 11 cases were approved Thursday by the U.S. Bankruptcy Court for the Southern District of New York.

The plan confirmation hearing is scheduled for Dec. 10.

As previously reported, the competing plans were filed by LightSquared and some of its affiliates, an informal secured group of LightSquared LP lenders, U.S. Bank NA and Mast Capital Management, LLC and Harbinger Capital Partners, LLC.

The LightSquared and affiliates plan and Harbinger plan covers the LightSquared Inc. debtors, the lender group's plan covers the LightSquared LP debtors, and the U.S. Bank and Mast plan covers the One Dot Six Corp. debtor.

Plan terms

Treatment of creditors under LightSquared's plan would include the following:

• Priority claims would be paid in full in cash;

• Holders of other secured claims would either be paid in full in cash or receive the collateral securing their claims;

• Holders of pre-bankruptcy non-subordinated facility claims would receive a share of plan consideration remaining after priority claims are paid in full;

• Holders of pre-bankruptcy subordinated claims would receive a share of plan consideration remaining after priority and non-subordinated facility claims are paid in full;

• Holders of general unsecured claims would receive a share of plan consideration remaining after priority and facility claims are paid in full;

• Holders of existing preferred units would receive a share of plan consideration remaining after all other claims are paid in full;

• Holders of common interests would receive a share of plan consideration remaining after all other claims and preferred interests are paid; and

• Intercompany interests would be reinstated.

Harbinger plan

Terms of the Harbinger plan would include the following:

• LightSquared LP would obtain a new $2,183,000,000 three-year first-lien term loan. Interest would be 9% payable in kind during the first year, 10% payable in kind or 8% payable in cash during the second year and 11% payable in kind or 9% payable in cash during the third year;

• LightSquared Inc. would obtain a six-year $573 million subordinated loan facility, which would bear interest at 14%, payable in kind;

• Harbinger would make a $259 million capital contribution through the voluntary contribution of $159 million of pre-bankruptcy facility claims and by backstopping a $100 million rights offering for holders of existing common stock;

• DIP facility claims, administrative expense claims, tax priority claims, LightSquared Inc. pre-bankruptcy credit facility claims, other priority claims and general unsecured claims would be paid in full in cash;

• Holders of LightSquared LP pre-bankruptcy credit facility claims would be paid in full from a share of a new first-lien term loan facility;

• Holders of other secured claims would either be paid in full in cash or receive the collateral securing the claims;

• Intercompany claims and intercompany interests would be reinstated;

• Holders of existing preferred stock equity interests would be paid in full from new subordinated loan facility notes; and

• Holders of existing common stock equity interests would retain their common stock and receive the right to participate in the rights offering for 3.9% of common stock of the reorganized company.

LP lenders' plan

Treatment of creditors under the LP lender group's plan is slated to include the following:

• Administrative claims, priority tax claims and priority non-tax claims would be paid in full in cash;

• Holders of LP facility secured claims would receive a share of plan consideration after payment of priority and general LP unsecured claims, provided that, if the stalking horse bidder under the lenders' proposed $2.2 billion sale is the high bidder and the effective date occurs, the plan consideration distributed to the holders of LP facility secured claims would equal $2,102,000,000 in total;

• Holders of other LP secured claims would either be paid in full in cash or receive other treatment that renders the claims unimpaired;

• Holders of general LP unsecured claims would receive a share of an unsecured plan distribution. To the extent these claims exceed the unsecured claims distribution, these creditors would also receive any plan consideration remaining after payment of secured claims;

• Holders of LP preferred unit interests would receive a share of any plan consideration remaining after payment in full of unsecured claims, including the excess unsecured claim distribution; and

• Holders of LP common equity interests would receive a share of any plan consideration remaining after payment of preferred unit interests.

U.S. Bank/Mast plan

The terms of the plan for the One Dot Six debtor would include the following:

• One Dot Six's assets would be sold in a court-supervised auction process, with an entity formed by Mast to serve as the stalking horse bidder;

• Following the plan effective date, One Dot Six would be managed and administered by an entity designated by the plan proponents;

• Administrative claims, debtor-in-possession financing claims, priority tax claims and priority non-tax claims would be paid in cash;

• Holders of other secured claims would either be paid in full in cash or their claims would be otherwise rendered unimpaired;

• Holders of One Dot Six guaranty claims would receive a share of any plan consideration remaining after payment of unclassified, priority and other secured claims;

• Holders of One Dot Six subordinated guaranty claims would receive a share of any plan consideration remaining after payment of unclassified, priority, other secured and guaranty claims;

• Holders of One Dot Six general unsecured claims would receive a share of any consideration remaining after payment of unclassified, priority, other secured, guaranty and subordinated guaranty claims; and

• Holders of equity interests would receive a share of any plan consideration remaining after payment in full of all other claims.

LightSquared is a Reston, Va.-based wholesale-only 4G-LTE network integrated with satellite coverage. The company filed for bankruptcy on May 14, 2012 under Chapter 11 case number 12-12080.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.