LightSquared agrees to settle Sprint master services agreement claims

By Caroline Salls

Pittsburgh, Feb. 14 - LightSquared Inc. requested court approval of a claim settlement with SprintCom, Inc. and Sprint Nextel, according to a Feb. 13 filing with the U.S. Bankruptcy Court for the Southern District of New York.

LightSquared and Sprint entered into a master services agreement on June 3, 2011 under which Sprint agreed to design, deploy, operate, manage and maintain a nationwide terrestrial broadband mobile network that would utilize LightSquared's spectrum to provide 4G wireless services throughout the United States.

LightSquared LP initially paid Sprint $310 million in advance payments for work on the network and its eventual operation.

LightSquared said it subsequently agreed that $236.47 million in costs had been fully earned and unconditionally paid to Sprint from the advance payment. LightSquared agreed never to file any claim for repayment of any portion of that amount.

The company said Sprint agreed to refund $65 million from the advance payment to LightSquared LP, while $8.53 million of the advance payment would remain subject to termination and the agreement unwind process.

LightSquared said Sprint chose to unwind the master services agreement on March 16, 2012.

Since that date, Sprint and LightSquared worked to reconcile the appropriate allocation of the balance of the advance payment.

According to the motion, the Sprint entities have filed three claims against LightSquared's bankruptcy estates, including an $11,757 claim against LightSquared Inc. for wireless telecommunications services and unliquidated secured claims arising under the termination and unwind of the master services agreement.

Under the settlement, the parties have agreed that the appropriate allocation of the remaining advance payment requires a $1.01 million payment to LightSquared LP, with Sprint keeping $2.73 million.

A hearing is scheduled for Feb. 27.

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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