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Wholesale Wireless Service Provider LightSquared Files For Bankruptcy

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Thing have looked grim for upstart wireless service provider LightSquared ever since the FCC officially withdrew their conditional approval to build out the terrestrial part of their LTE network, and now it seems like it may all come to an end.

After the demise of their partnership with Sprint, the resignation of CEO Sanjiv Ahuja, and the laying off of nearly 45% of their employees, Bloomberg reports that the Virginia-based company has just filed for Chapter 11 bankruptcy today.

For those who haven’t followed the entire sordid series of events, LightSquared was formed in 2010 with the intention of creating a wholesale 4G LTE network that other companies could tap into or resell as they desired. They hoped that they would be able to cover somewhere 260 million people in the United States once the network had gone live, but persistent issues like interference with GPS and regulatory headaches meant the service was never able to make it off the ground.

The news doesn’t come as much of a shock considering that LightSquared backer Philip Falcone admitted to considering filling for bankruptcy back in April, but the company has since been issued a few stays of execution from their lenders in an attempt to give them enough space to turn things around.

The company noted that they had assets and debts in excess of $1 billion each, but The Verge got their hands on LightSquared’s bankruptcy filing, in which the company breaks it down a bit further. Among the most highly-owed creditors are Boeing Satellite Systems and and Alcatel-Lucent, who are owed $7.5 million and $7.3 million respectively.

As always though, LightSquared is putting a brave face on. CFO Marc Montagner said in a statement that the “voluntary Chapter 11 filing is intended to give LightSquared sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network,” though it’s tough to imagine how much more headway they can make in this condition. What strikes me as more likely though is that LightSquared will have to liquidate all the assets and sell off their spectrum holdings (perhaps to Dish), and I imagine we won’t have to wait long to see what happens next.