Satellite/terrestrial LTE venture LightSquared and GPS device maker Trimble (NASDAQ:TRMB) have asked a US court to pause their litigation to help them seek a settlement. Their request for a 45-day stay could prove to be a turning point in a long-running…
Satellite/terrestrial LTE venture LightSquared and GPS device maker Trimble (NASDAQ:TRMB) have asked a US court to pause their litigation to help them seek a settlement.
Their request for a 45-day stay could prove to be a turning point in a long-running lawsuit over concerns that part of LightSquared’s spectrum interferes with GPS systems.
Those concerns helped push the venture to file for voluntary Chapter 11 bankruptcy back in May 2012, after the FCC stopped it from launching the network. LightSquared has continued to talk to regulators for a way around the interference issues since securing a restructuring plan earlier this year, and in April it asked the FCC to transfer its mobile licences to the newly restructured group.
LightSquared did not shed any light on a potential workaround in its stay request to the US District Court in New York City, although one option it has floated in the past involves sharing government spectrum to make up for not using some of its own airwaves.
“Based on recent exchanges, LightSquared and Trimble believe there is now an opportunity for the parties to have a constructive dialogue and to engage in a process aimed at a global resolution of the pending technical issues related to the use of LightSquared spectrum that gave rise to the present disputes—including this case and ongoing proceedings before the FCC and other government agencies,” a lawyer for LightSquared said in a letter to judge Richard Berman.
According to LightSquared, as well as helping cut litigation costs, the 45-day break will free up “key personnel necessary for productive technical discussions”, who are currently deeply engaged with the lawsuit.
It said Garmin (NASDAQ:GRMN) and Deere (NYSE:DE), GPS specialists who are also defendants in the case, are willing to engage in settlement talks but it does not know their final position regarding a 45-day stay.
The GPS Innovation Alliance, which was formed in 2013 to promote the industry’s interests and is the final defendant in the case, has not opposed the stay, according to the letter.
LightSquared’s bankruptcy spawned a number of lawsuits and while many have since been dismissed, legal action continues to surround the venture.
Hedge fund Harbinger Capital Partners, which used to own most of LightSquared’s equity but has been left with about 44% after the restructuring, is reported to have filed a new US$1.5bn lawsuit in a Manhattan federal court against Charlie Ergen, who is executive chairman of US DTH firm Dish Network (NASDAQ:DISH).
Harbinger head Philip Falcone had wrestled with Ergen for control of LightSquared throughout its bankruptcy. Ergen was LightSquared’s biggest creditor with more than US$1bn in debt, and at one point Dish had tried to buy the group.
Falcone has accused Ergen of using improper tactics to strip it of control of the venture, and had earlier filed a US$1.5bn civil racketeering lawsuit, which was dismissed in April 2015 to avoid splitting claims across multiple proceedings. A US District Court in Denver ruled at the time that Harbinger could pursue its claim in another forum.
Meanwhile, Ergen could soon have another legal battle on his hands as the FCC looks set to deny US$3.3bn worth of spectrum discounts, which Dish’s affiliates applied for in a recent auction of airwaves.
In a note to investors on 23 July, New Street Research analyst Jonathan Chaplin said: “The order is likely to be voted on in the coming days, and we expect that it will very likely be approved by at least three commissioners.
“After the vote, we expect Dish to petition the order to no avail and subsequently sue in the Court of Appeals. We expect that Dish will likely have to pay the US$3.3bn shortly after the order is adopted.”
