LightSquared plan investors eye $200 million alternate transaction fee

By Caroline Salls

Pittsburgh, Jan. 2 – LightSquared Inc. requested court approval to pay a $200 million alternative transaction fee in connection with its proposed plan of reorganization, according to a Dec. 31 filing with the U.S. Bankruptcy Court for the Southern District of New York.

Moelis & Co. LLC managing director Mark S. Hootnick said in a statement filed with the court that, in consideration for making investments and sponsoring the plan, LightSquared’s new investors are seeking payment of the $200 million fee, with 47.65% to go to Fortress Credit Opportunities Advisors LLC, 37.65% to SIG Holdings, Inc., 14.71% to Centerbridge Partners, LP and 0% to Harbinger Capital Partners, LLC.

Moelis is LightSquared’s investment banker and financial adviser.

Hootnick said the fee will be payable senior to common equity interests but junior to all claims and preferred equity interests.

An alternative transaction is defined as any letter of intent, memorandum of understanding or agreement related to any Chapter 11 plan, sale, proposal or offer of dissolution, winding up, liquidation, reorganization, merger or restructuring of the LightSquared debtors that pays in full all specified claims and equity interests, the filing said.

Hootnick said approval of the transaction fee it is a condition to confirmation, and the investors are unwilling to proceed to confirmation without it.

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.