Business

Falcone swoops past Ergen in battle over LightSquared

Billionaire investor Phil Falcone just left satellite mogul Charlie Ergen eating his dust as he took the lead in their vicious months-long battle over bankrupt wireless company LightSquared.

On Wednesday, Falcone’s hedge fund, Harbinger Capital Partners, cut a deal with a group of hard-hitting Wall Street investors to buy LightSquared out of bankruptcy for $3.3 billion in cash and $1.7 billion in debt, sources told The Post.

The competing offer was presented to LightSquared’s special committee in charge of the company’s bankruptcy late Wednesday afternoon — just as Ergen was set to bid $2.2 billion for its assets at auction.

The auction, set for 3 pm, was pushed back and then canceled as the committee considered the higher offer, sources said.

The offer would give private-equity firm Centerbridge Partners the lead equity position. Also included in the transaction is private-equity firm Fortress and JPMorgan, sources said.

Harbinger, which has been LightSquared’s top shareholder since 2010, will retain an equity stake, a person with knowledge of the deal told The Post. Ergen’s $2.2 billion offer, by contrast, would cut Harbinger out entirely.

If they prevail, Centerbridge and its partners may seek to refuse to pay Ergen his $1 billion in LightSquared’s debt — at least until a lawsuit over the legality of his purchase is resolved, a source told The Post.

On Tuesday, a bankruptcy court judge refused to toss LightSquared’s lawsuit against Ergen and his Dish Network over Ergen’s $1 billion stake, which allegedly violates covenants forbidding strategic buyers from owning the debt.