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Reuters: Jefferies Cleared to Arrange Exit Financing for LightSquared

June 07, 2013, 07:52 AM
Filed Under: Bankruptcy

Reuters reports Judge Shelley Chapman said at a hearing in U.S. Bankruptcy Court in New York on Jun. 6, that LightSquared can hire investment bank Jefferies LLC to arrange credit facilities to pave the way for it to exit Chapter 11.

LightSquared LP, a wireless broadband maker, filed for bankruptcy in May 2012 with help from lawyers from Milbank, Tweed, Hadley & McCloy. Partner Matthew Barr said at the Jun. 6 hearing that the financing deal would serve as the cornerstone for LightSquared's restructuring plan, which is expected to provide some recovery for shareholders.

Harbinger Capital Partners, which holds an approximately 96 percent stake in LightSquared, has agreed to foot the bill for up to $80 million in financing fees associated with the facility, meaning fees would not come out of the recoveries of lenders on LightSquared's $1.9 billion loan.

The lender group was the subject of much discussion at the hearing, with Chapman raising concerns over possible changes in its composition as holders have traded their positions. About $319 million had traded through April, according to UBS, the agent on the LightSquared loan.

Sides acknowledged that the makeup of the group may not be entirely the same as when the case started. A unit of Dish Networks Corp was offered a big piece of the loan, but the trade didn't close, said the unit's lawyer, Willkie Farr & Gallagher partner Rachel Strickland.

LightSquared has until Jul. 15 to exclusively file and solicit votes for a reorganization plan. The deadline has been extended twice.

View the entire story on Thomson Reuters News & Insight.

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