By Dietrich Knauth
NEW YORK (Reuters) - Wireless network company Ligado Networks LLC filed for bankruptcy in Delaware late on Sunday, seeking to cut $7.8 billion in debt after U.S. government agencies blocked its planned expansion into land-based 5G wireless services.
Ligado had invested heavily in plans to expand its mobile 5G network into a new spectrum that uses lower frequency radio waves after receiving a U.S. Federal Communications Commission permit in 2020. But the U.S. Department of Defense blocked the planned expansion, saying Ligado's wireless signals would interfere with military global positioning system (GPS) receivers.
Ligado said in a statement on Monday that the bankruptcy filing will allow it to address debts that are no longer sustainable without the income it would have received from the expansion.
A majority of the company's lenders have agreed to convert $7.8 billion of debt into equity shares, which would reduce the company's total debt to $1.2 billion, according to Ligado. The company will continue to operate and provide mobile satellite services during its debt restructuring.
Ligado sued the Defense Department and other U.S. agencies over its access to additional spectrum 2023, saying that the government's actions deprived it of up to $39 billion in potential earnings from the FCC (BME:FCC) license. A federal judge in Washington D.C. allowed the lawsuit to proceed in a November 2024 ruling, rejecting the U.S. government's attempt to dismiss it.
Ligado president and CEO Doug Smith said in Monday's statement that the company will continue to vigorously pursue its litigation against the U.S. government. The Defense Department declined to comment.
Ligado, formerly known as Lightsquared, previously filed for bankruptcy in 2012.