LightSquared’s bankruptcy judge has reportedly rejected an attempt by its lenders to prevent Dish Network from abandoning a bid for the US satellite/terrestrial venture.
Dish, a DTH operator with plans to roll out an LTE network across the US,…
LightSquared’s bankruptcy judge has reportedly rejected an attempt by its lenders to prevent Dish Network from abandoning a bid for the US satellite/terrestrial venture.
Dish, a DTH operator with plans to roll out an LTE network across the US, announced it was scrapping the US$2.2bn offer earlier this month, but some lenders argued it was legally obliged to close the deal.
However, Judge Shelley Chapman said on 22 January that the satellite broadcaster’s termination of an agreement with those lenders based on the bid was sufficient to withdraw it, even though it did not officially file paperwork to this end, according to court reports.
The lenders reportedly have the right to appeal the decision.
Dish was unable to comment before the press deadline.
It is unclear why Dish walked away from LightSquared because, unlike rival bids to reorganise the assets, it had said its offer was not reliant upon the venture being successful in its talks with regulators over solving the spectrum interference issues that are preventing it from deploying its LTE network.
Even still, the move came around the time the FCC submitted a bankruptcy court filing to state it was unsure whether it would be able to approve this network by the end of 2014.
Before Dish pulled its offer it had already been rejected by LightSquared’s hedge fund owner Harbinger Capital Partners, which recently chose to back the LTE venture’s own plan to exit bankruptcy.
That plan is also supported by JP Morgan, private equity firm Fortress Investment Group and private lending group Melody Capital Partners. It involves US$2.5bn in senior secured exit facility financing, a US$250m senior secured loan, and at least US$1.25bn in new equity contributions.
There is also a proposal from Mast Capital Management and US Bank National Association, which involves the sale of some of LightSquared’s smaller assets.
Later in the hearing on 22 January, Chapman reportedly closed the courtroom to the public to discuss scheduling matters.
