Billionaire Phil Falcone is getting a divorce — not from his fashionista wife Lisa Maria, but from his dreams of owning a nationwide 4G LTE wireless network.
On Monday, Falcone filed “divorce papers” from LightSquared, his bankrupt wireless venture, in the form of a proposed plan of reorganization to lead the restructuring for LightSquared Inc., the smaller arm of the failed Reston, Va., startup.
LightSquared Inc. owns a small swath of 5 megahertz spectrum, as well as the rights to the tax losses in LightSquared, which could be valued at more than $2 billion.
LightSquared LP, by contrast, owns the larger, more coveted swath of L-Band spectrum. But its ability to come to life has been hampered by years of infighting between creditors, including Dish Network co-founder Charlie Ergen.
Falcone was offered a chance to stay in the larger LightSquared LP restructuring if he dropped his litigation against Uncle Sam and Ergen, who he’s accused of screwing with the company so he could buy the assets on the cheap, sources told The Post.
Falcone refused, and was erased from the current LP plan, which is being led by private-equity firm Fortress.
Falcone’s new, smaller plan centers on a $560 million bid to restructure “Inc” along with JPMorgan. This will keep him in the spectrum game, as he plans to use the 5 megahertz of spectrum he gets from the restructuring and to buy more, a source familiar with his thinking told The Post.
Falcone also plans to cash out on the L-Band he’s walking away from by objecting to the LP’s restructuring proposal if the value of the L-Band ends up being more than what’s needed to pay off current creditors, the source said.
Judge Shelly Chapman is expected to value the L-Band on Oct. 20, the date set to confirm the various restructuring plans. If the spectrum is valued at, say, $5 billion, Falcone plans to request that junior shareholders like himself get paid out, the source said.
Plus, there’s the potential payout from the litigation against both Ergen and the Federal Communications Commission, which in 2012 revoked his license to build out LightSquared’s network — pushing it into Chapter 11.
People inside Fortress have called Falcone’s plan to abandon the larger assets in favor of pursuing the lawsuits “tragic,” a different source told The Post.
Judge Chapman on Monday also questioned whether Falcone was taking the right path by dropping out of the bigger restructuring plan.
“Pursuing an Inc-only plan is such a smaller piece of the vision your client had for this company,” she told Falcone’s lawyer David Friedman.
“It’s not our first choice, second choice or third choice,” Friedman said. “But it is vastly superior choice to what we’ve been presented with.”
Meanwhile, LP’s prospects for an agreeable plan continue to look dim as the lawyer for the Ad Hoc group of lenders, Tom Lauria, bickered with Ergen’s lawyer, Rachel Strickland.
“I have zero-percent faith that a negotiation led by Mr. Lauria on the one hand and me on the other will lead to progress,” Strickland warned the judge.