LightSquared filed for Chapter 11 bankruptcy yesterday in a bid to restructure the troubled broadband company.  We have some of the details.

LightSquared has been attempting to build a celluar data network in the United States, but ran into issues when the Department of Defense and other parties interested in GPS systems alleged that LightSquare’s network interfered with proper function of GPS systems.  The firm has been trying to refinance their bonds and yesterday filed for Chapter 11 reorganization in the United States Bankruptcy Court in the Southern District of New York.

First, a little background from the company’s website on what they do:

First Truly Open, Wholesale-Only Network

LightSquared is building the only national 4G-LTE open wireless broadband network that incorporates nationwide satellite coverage and offers people the speed, value and reliability of universal connectivity, wherever they are in the United States. Through its wholesale-only business model, those without their own wireless network or who have limited geographic coverage or spectrum can market and sell their own devices, applications and services using the LightSquared network—at a competitive price and without retail competition from LightSquared.

Convenient Connectivity For All

LightSquared enables manufacturers and retailers to provide a one-box solution for consumers, while creating new customer relationships and ongoing revenue streams for themselves. Because it is a completely open network, partners can develop their own devices, applications, and services that use the LightSquared network.

For example, by partnering with LightSquared, retailers will be able to sell devices bundled with service, enabling potential new recurring revenue streams for every device while maintaining full ownership of their customers. Telecommunications service providers can expand their coverage and capabilities via LightSquared’s nationwide 4G network without massive capital outlays. Device manufacturers can launch innovative and integrated devices, bundled with content and broadband service, while ensuring full ownership of their customer relationships.

Second, the press release from LightSquared explaining the filing:

LightSquared Implements Voluntary Chapter 11 Restructuring

Company Continues to Provide Mission Critical Services to Customers

Filing Gives Company Breathing Room to Pursue Build Out of its 4G Wireless Network

 

RESTON, Va., May 14, 2012 – – LightSquared announced today that it commenced voluntarily reorganization cases 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. The company will also file a recognition proceeding in Canada.

The company fully expects to continue normal operations throughout this process. All LightSquared distribution partners and customers, including public safety, emergency response, government and military users of LightSquared’s satellite-based communications services can continue to rely on LightSquared to provide them with mission critical communications services.

“The filing was necessary to preserve the value of our business and to ensure continued operations. The voluntary Chapter 11 filing is intended to give LightSquared sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network,” said Marc Montagner, interim co-chief operating officer and chief financial officer of LightSquared. “All of our efforts are focused on concluding this process in an efficient and successful manner.”

LightSquared intends to work with all key constituents to conduct an orderly restructuring process to maximize its asset value and to exit Chapter 11 in the quickest and most efficient manner possible.

LightSquared expects that its current management team will continue to lead the company throughout this process.

The filing was made in the U.S. Bankruptcy Court for the Southern District of New York and the recognition proceeding will be filed in the Superior Court of Justice in Toronto, Ontario.

For more information about the company’s restructuring, including all pleadings in the process, please visit www.kccllc.net/LightSquared. You may also access the court website at www.nysb.uscourts.gov (a PACER account is required).

About LightSquared

LightSquared is a mobile communications provider currently serving government customers, public safety, and the commercial transport and logistics industries. The company has invested more than $4 billion to deploy an integrated satellite-terrestrial network which will provide next generation, high-speed mobile services on a nationwide basis. LightSquared’s state-of-the-art satellite –successfully launched in 2010 – will be combined with 4G LTE terrestrial technology to create a nationwide communications system that offers superior coverage and mobile broadband speeds. LightSquared’s integrated satellite-terrestrial network will expand wireless broadband capacity at a time when demand is increasing exponentially. LightSquared’s wholesale-only business model will enable existing and new service providers to sell their own devices, applications and services – at a competitive cost and without retail competition from LightSquared. For more information, please go to www.LightSquared.com, www.facebook.com/LightSquared and www.twitter.com/LightSquared.

Read the whole PDF of the filing here.

It’s hard to see how this ends well for LightSquared and its investors.