Transactions &
Case Studies

December 2015


$4.2 billion

Chapter 11 Reorganization
Exclusive Financial Advisor to LightSquared Inc. on its $4.2 billion Chapter 11 Reorganization

On December 7, 2015, LightSquared Inc. successfully consummated its Chapter 11 Plan of Reorganization (the “Plan”), which was the culmination of extensive negotiations and litigation among the major constituents in the Chapter 11 case. Prior to the Chapter 11 filing, Moelis & Company pursued an exhaustive strategic and financial investor process to find the right solution for its client and led intensive negotiations to execute an out-of-court restructuring. Due to the opposition of several large holders, LightSquared was forced to file for Chapter 11 to maintain control over its assets.

When LightSquared set out to launch a nationwide, wholesale wireless LTE network, federal regulators denied attempts to clear the Plan, citing concerns about potential GPS interference. As a result, LightSquared was forced to file for Chapter 11 protection in May 2012 with $2.3 billion of debt. Moelis & Company was hired as the exclusive financial advisor to the company, and ran extensive multi-party negotiations over more than three years, evaluating over a dozen plans of reorganization filed with the U.S. Bankruptcy Court.

These extensive discussions resulted in a near-fully consensual plan of reorganization, offering full recovery to all existing debt and preferred equity holders. Moelis & Company also evaluated and assisted in the raising of over $3.5 billion of new debt and equity capital, numerous rounds of DIP financings, and served a critical role in a seven-month mediation process. Moelis & Company provided an expert valuation report as well as extensive trial testimony in support of the Plan and related financings that served as the centerpiece of the Plan confirmation. Additionally, the Firm submitted at least three formal valuation reports and provided testimony in support of multiple Plan proposals and deposition testimony on a number of matters at least nine times during the course of the Chapter 11 proceedings.

LightSquared pursued the confirmed Plan in partnership with an investor group, including Fortress Credit Opportunities Advisors LLC, Centerbridge Partners, L.P., JPMorgan Chase & Co., and Harbinger Capital Partners LLC. Among other features, the Plan provided for the full satisfaction of all claims and preferred equity interests, $3.5 billion in aggregate new-money debt and equity investments, and the installation of a world-class board of directors chaired by former Verizon Chairman and CEO Ivan Seidenberg.

LightSquared emerged from bankruptcy with $4.6 billion of new and rolled debt financing which provided over $900 million of cash. This allowed the company to pursue alternative investment opportunities and capitalize on its valuable wireless spectrum licenses.