LightSquared Inc.’s bankruptcy plan gives hedge funds that invested in the broadband company a leg up while blocking telecommunications firms from competing with it, a fund owned by Dish Network Chairman Charlie Ergen said in court papers appealing the plan.
LightSquared’s reorganization was drafted by “sophisticated hedge funds that have taken a commercial bet that the spectrum owned by LightSquared might one day be usable and therefore worth many billions of dollars,” Ergen’s fund said in its filing Monday. The fund, SP Special Opportunities LLC, is challenging wording in the plan that bars creditors from taking actions that could impede LightSquared’s ability to get a license for the use of its airwaves.
That wording will give hedge funds “a significant leg up, because it threatens to chill behavior by other marketplace participants,” including Dish, AT&T, Sprint and Verizon Communications, according to the lawsuit against Centerbridge Capital Partners LP, Fortress Investment Group LLC and Philip Falcone’s Harbinger Capital Partners LLC.
