Bankrupt LightSquared sues Deere & Co, GPS industry titans

Reuters

By Nick Brown

NEW YORK, Nov 1 (Reuters) - Bankrupt LightSquared on Fridaysued leaders in the GPS industry, including Deere & Co and Garmin International Inc, saying they kept mumabout interference concerns stemming from LightSquared'swireless network until the company had already pumped $4 billioninto building it.

In a 65-page lawsuit in U.S. Bankruptcy Court in New York,where LightSquared is fighting to keep control of its spectrum,the company alleged that farm equipment maker Deere, and GPScompanies Garmin and Trimble Navigation Ltd led it tobelieve its network would not interfere with global positioningsystem devices.

The complaint comes on the heels of a similar lawsuitagainst the GPS industry by Phil Falcone's Harbinger Capital,LightSquared's controlling shareholder.

Last month, LightSquared received permission from thebankruptcy judge overseeing its Chapter 11 case to pause theHarbinger lawsuit so that LightSquared could decide whether itwanted to join the suit or bring claims of its own.

In Friday's filing, LightSquared says the companies made"promises, agreements and representations" over the 10 yearsthat LightSquared spent building its network, all to the effectthat a wireless network would not cause interference with GPSdevices.

But in 2010, when LightSquared was close to deploying itsnetwork, the GPS industry changed its tune, the lawsuit says. Asa result, the Federal Communications Commission revokedLightSquared's license to operate its spectrum, and the companywas forced into bankruptcy in 2012.

"This case ... is about how those three GPS manufacturerswaited until those billions were invested in the necessarynetwork infrastructure before then breaking their priorpromises, reneging on their prior agreements, and disavowingtheir prior representations," LightSquared says.

The lawsuit alleges that the only reason the interferenceconcerns exist is that the GPS devices encroach upon thespectrum that LightSquared is licensed to operate. Thenine-count complaint, which also names industry groups the U.S.GPS Industry Council and the Coalition to Save Our GPS asdefendants, alleges breach of contract, tortious interferenceand other claims.

A spokesman for Deere declined to comment, while aspokeswoman for Trimble did not immediately respond to a requestfor comment. A representative for Garmin could not immediatelybe reached.

LightSquared's bankruptcy has become a messy fight forcontrol between Falcone and Charles Ergen, the chairman of DISHNetwork Corp, which is making a hard push to acquirethe company's valuable spectrum.

The assets are likely to be auctioned off to the highestbidder, with Dish having already made a baseline offer for someof the spectrum.

LightSquared and its lenders have pushed competing proposalsfor the parameters of a sale, while Harbinger has put forth aplan that would restructure LightSquared without a sale. Theplans are being voted on by creditors.

Doug Smith, LightSquared's chief executive, in a statementnoted his company's "fiduciary duty" to "ensure that partiesunderstand all of the assets of our estates more specifically."

"The unfortunate reality is that this company unnecessarilylost billions of dollars, and this lawsuit provides forinterested bidders the factual background between LightSquaredand the GPS industry," Smith said.

Last week, Ergen and Dish won dismissal of a lawsuit byHarbinger that had accused them of amassing loans to becomeLightSquared's biggest lender and then unlawfully using thatposition to try to wrest control of the company.

In September, LightSquared's bankruptcy judge nixed one ofHarbinger's nominees to a committee to oversee the company'sauction, citing a possible bias against Dish. The woman, DonnaAlderman, had lost her job when Dish acquired her formeremployer, and said in emails that she felt "screwed" by theprocess.

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