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LightSquared filed for bankruptcy today after its plan to deliver high-speed wireless to as many as 260 million people ran afoul of U.S. regulators, reports Bloomberg. LightSquared had until 5 p.m. ET today to work out a deal with lenders that would keep it from being forced into bankruptcy, but reports said the company drew up its own plans for voluntary Chapter 11 bankruptcy protection, reports Reuters.

Lightsquared, on their company website, said
…”Under Chapter 11 of the U.S. Bankruptcy Code to give it time to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network.”…

Falcone will apparently face a default on a $1.6 billion loan, sources said. Creditors have been negotiating to restructure LightSquared’s 96 percent ownership by Falcone’s Harbinger Capital Partners. Falcone has put $3 billion into the company. LightSquared has more than $5 billion in funding: $2.9 billion from Harbinger and $2.3 from outside lenders and investors.

“The bondholders are asking for conditions they know Harbinger and Phil cannot agree to,” said a source close to the situation.

LightSquared creditors have included hedge fund manager David Tepper, billionaire investor Carl Icahn and hedge funds including Fortress Investment Group (FIG), Knighthead Capital Management, Redwood Capital Management and investment firm Capital Research and Management Co.

Icahn recently sold his $250 million position in the company for a profit, according to sources. Dish Network co-founder and chairman Charlie Ergen has snatched up $350 million worth of LightSquared debt, the New York Post reported this week.

Last year, Harbinger posted a 47 percent decline in value, largely because of a write-down on the value of the fund’s LightSquared investment.

Why would Charlie Ergen be interested in Lightsquared? Well, there’s the satellite. Lightsquared never seemed to take it’s primary physical asset seriously, but it does provide a unique, nationwide footprint from geosynchronous space.

The Reston, Va., company suffered In February a fatal blow in February due to concerns that it would interfere with both commercial and military GPS technology. when the FCC announced it would “suspend indefinitely” the startup’s conditional waiver to operate after it was determined that LightSquared’s interference with other devices, including GPS devices, was unavoidable.

Only five years ago, Falcone had been crowned as one of the hedge fund industry’s biggest stars thanks to a savvy bet against the overheated housing market which helped grow his Harbinger Capital Partners to about $26 billion in assets under management. By earlier this year that had shrunk to roughly $4 billion.

Related stories on Dailywireless include; Falcone On The Way Out?, LightSquared Makes Inmarsat Payment, Senators Urge Saving Lightsquared, Lightsquared Calls GPS Test “Rigged”, Lightsquared: Breaking Bad, Defense Bill: Bad News for Lightsquared, Sprint Gives Lightsquared 30 Days, Lightsquared Short on Cash, Lightsquared Battles The Force, Lightsquared: A Hardware Solution, Lightsquared: A Hardware Solution, Lightsquared Files Official FCC Report, More Testing for Lightsquared, Lightsquared: Another Plan, Lightsquared & Sprint Announce Sharing Agreement, Lightsquared Files Official FCC Report , Lightsquared: Plan “B”, Lightsquared: Lawmakers Skeptical, Lightsquared + Sprint Deal Done?, Lightsquared Gets 2-week Extension, Ergen Likely Got TerreStar, Charlie Ergen’s Spectacular Triple Play, Lightsquared Interference: No Immediate Fix?, LightSquared: GPS Interference Found, Lightsquared: Plan B from Outer Space?, Harbinger: 59MHz or What?. Time Warner Cable + Lightstream?, Lightsquared Signs Cricket Wireless, Another Rumor: Lightsquared + Sprint?, Lightsquared + Sprint?, Charlie’s Big Play, LTE Spectrum: It’s War, MetroPCS Eyes TerreStar and Charlie Ergen’s Spectacular Triple Play, Harbinger Sells Inmarsat Shares, FCC Green Lights Lightsquared, LightSquared: In Trouble?, Lightsquared Unfurled

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