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.