Us Justice Dept Objects To Lightsquared Bankruptcy Exit Plans

Bankruptcy Court in Manhattan, the DOJ’s U.S. Trustee Program said a fantastic read the plans would provide third parties with overly broad releases from potential legal claims. LightSquared, in bankruptcy since 2012, is fighting to keep control of its valuable spectrum amid a takeover push by Dish Network Corp. Three creditor groups have proposed plans that contemplate an auction for the assets, and Dish has already made a baseline bid of $2.2 billion. A fourth plan, proposed by LightSquared’s majority owner, Phil Falcone’s Harbinger Capital Partners, would restructure the company without an auction, with Harbinger maintaining control. LightSquared, which had planned a massive wireless network, filed for Chapter 11 protection after the Federal Communications Commission blocked it from using its spectrum amid interference concerns from the GPS industry. The Trustee’s office said the restructuring plans could be read to protect third parties from claims related to criminal conduct and professional malpractice, even though they exclude fraud and gross negligence claims from the releases.

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