Phil Falcone, manager of Harbinger Capital Partners, said Thursday that he is considering bankruptcy for the failing telecommunications company LightSquared.
In his statement Thursday, Falcone said, “While no decision has yet been made, the rationale behind a voluntary filing would give us the necessary time to continue with our vision, build the network and protect the company from creditors who are more interested in a quick flip.”
Falcone would prefer not to put the company in bankruptcy.
LightSquared intended to build a high-speed data network that would serve close to 260 million customers. But it is struggling to survive after the Federal Communications Commission decided to block the service because it posed the risk of interfering with global positioning systems.
Falcone said LightSquared is exploring remedies for the company such as a signal-filtering technology or swapping the current spectrum for one controlled by the Department of Defense.
If the company does file for debt protection it will be under a Chapter 11 filing, which allows a business to carry out operations while a bankruptcy lawyer negotiates a settlement with creditors and investors.
Many businesses face uncertainty especially during tough economic times. Unforeseen circumstances often arise and a struggling business may have no other option to solving their debt issues than hiring a bankruptcy attorney to file for restructuring or liquidation.
An experienced bankruptcy lawyer will carefully consider an ailing company’s options and recommend the best way to eliminating their crushing debt.