LightSquared exclusive periods extended to July 15 under stipulation

By Caroline Salls

Pittsburgh, Feb. 13 - LightSquared Inc.'s exclusive periods for filing and soliciting votes on a plan of reorganization were extended through July 15, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company's exclusive plan-filing period was previously scheduled to expire on Jan. 31 and the solicitation period on April 1.

The extension was granted in accordance with a stipulation between LightSquared, an informal group of pre-bankruptcy LP lenders, lender agent U.S. Bank NA and lender MAST Capital Management, LLC.

The other terms of the stipulation include the following:

• The parties will negotiate the terms of a consensual Chapter 11 plan before the termination date. If no agreement is reached by the termination date, LightSquared or any party in interest may file a Chapter 11 plan after the termination date.

• Before the exclusivity termination date, LightSquared will only be permitted to file a plan that is consented to by the informal group and U.S. Bank or proposes to pay specified obligations in full in cash;

• The informal group and U.S. Bank cannot file motions to terminate LightSquared's exclusivity unless it breaches debtor-in-possession financing and cash collateral orders;

• After the termination date, the informal group, MAST and U.S. Bank can file a plan or plans in LightSquared's case that may or may not call for a sale or other transaction involving all or substantially all of the company's assets and/or equity in one or more of the LightSquared debtors;

• The informal group will cause the pre-bankruptcy LP agent to immediately consent to LightSquared's continued use of cash collateral through Dec. 31, 2013;

• U.S. Bank and MAST agree to waive any default resulting from termination of exclusivity on July 15, and the informal group will not object to the company's motion to amend the DIP facility to obtain $5 million in additional borrowings and extend the maturity date of the DIP loan to Dec. 31, 2013.

The interest rate on the DIP obligations will increase to 12½% and $7.2 million in interest accruing at the default rate will be added to the DIP obligations; and

• LightSquared will not seek court approval of DIP financing that is senior or equal to the liens on the pre-bankruptcy LP collateral and claims of the pre-bankruptcy LP lenders without the informal group's consent.

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.

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