LightSquared hearing on Harbinger lawsuit stay pushed again to Dec. 11

By Kali Hays

New York, Nov. 12 – LightSquared Inc.’s hearing on its motion to stay Harbinger Capital Partners, LLC’s litigation efforts against the GPS industry and the United States has been adjourned to Dec. 11, according to a Nov. 12 notice from the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Harbinger filed two lawsuits against GPS manufacturers and related industry associations and the United States looking to recover its $1.9 billion investment in LightSquared.

Harbinger claims that the parties forced LightSquared into bankruptcy and damaged Harbinger as a result.

LightSquared has made similar claims against the parties, but is seeking a stay of the lawsuits until after a plan effective date or a ruling on a permanent injunction is made and said that Harbinger is trying to “recoup its investment by circumventing the bankruptcy process.”

“If Harbinger’s claims against the GPS industry and the United States proceed, Harbinger could accomplish outside of the bankruptcy what it could not do by participating in the reorganization: unilaterally leapfrogging over LightSquared’s creditors and preferred equity holders in violation of the absolute-priority rule entitling senior stakeholders to payment before equity holders,” LightSquared’s motion stated.

A status conference on the company’s Chapter 11 plan is scheduled for Friday.

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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