LightSquared DIP loan amendment extends maturity, grants forbearance

By Caroline Salls

Pittsburgh, Jan. 24 - LightSquared Inc. requested court approval of an amendment that extends its debtor-in-possession financing maturity date through March 31 and incorporates a default forbearance, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Interest will accrue at the default rate, effective Dec. 31.

As previously reported, LightSquared Inc. non-insider lenders U.S. Bank NA and MAST Capital Management, LLC asked the court on Jan. 6 to hold the LightSquared debtors, Harbinger Capital, LLC, JPMorgan Chase & Co., Melody Capital Advisors, LLC and Fortress Investment Group LLC in civil contempt for violating the existing debtor-in-possession financing order.

According to the contempt motion, a supplemental DIP financing motion impermissibly seeks approval for LightSquared to obtain new financing in connection with two recently filed plans of reorganization "on terms that are blatant violations" of the existing DIP order.

U.S. Bank and MAST said the existing financing order clearly establishes limitations on the conditions under which LightSquared may seek new DIP financing.

U.S. Bank and MAST agreed to the proposed DIP loan amendment.

The amendment will be presented to the court on Jan. 30. If an objection is filed, a hearing will be held on Jan. 31.

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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