Hedge fund manager Philip Falcone said in an interview on Wednesday he is “seriously considering” filing a voluntary bankruptcy for LightSquared, the struggling telecom startup in which his Harbinger Capital Partners is the majority owner.
Falcone said a bankruptcy is one option he is considering as he tries to find a way to salvage the company and keep its creditors at bay.
He said a bankruptcy would allow the company time to find a way to deal with communications interference issues that have arisen with the planned buildout of a nationwide wireless broadband network.
Falcone said a bankruptcy would not necessarily wipe out the equity holders of LightSquared because the spectrum it owns retains value.
In mid-March, LightSquared lost its main business partner
, which returned $65 million in payments to the telecommunications startup.
Sprint had the right to back out of the deal if LightSquared failed to get regulatory approval for its own high-speed wireless service. Regulators said LightSquared’s network would interfere with the Global Positioning System used by airlines, the military and others.
In February, the Federal Communications Commission proposed to indefinitely suspend LightSquared’s authority to use its satellite spectrum for cellular use.
Since then the company said it would lay off nearly half of its staff of 330 employees. Sanjay Ahuja, a telecommunications industry veteran, also stepped down as chief executive of the company just two weeks after the major blow from regulators.
