Falcon: Best Option For The Company At This Time

After being rumored for months, LightSquared officially filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Manhattan Monday afternoon. The move came only hours before a deal to prevent the Internet start-up from defaulting on its debt was set to expire.

The company has had a tumultuous run. It set out to establish a nationwide wireless 4G data network delivered via satellite, but when it added high-powered terrestrial transmitters to the mix, it was found that the company's signals interfered with nearly every existing GPS device operating on adjacent frequencies. The FCC eventually blocked the company from moving forward with its plans, and despite being propped up by hedge fund manager Phillip Falcone, it could not recover.

The Wall Street Journal reports that Falcone told Harbinger Capital Partners that this was the best option for LightSquared, and that he still plans to build the high-speed broadband mobile network. The filing was " a necessary and appropriate decision by LightSquared to preserve its value," he said in a memo to investors obtained by the paper.

Bloomberg News reports that among the company's largest creditors are Boeing Satellite Systems and Alcatel-Lucent. LightSquared owes each over $7 million.

FMI: www.nysb.uscourts.gov