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Investors sue LightSquared parent for 'wasting' billions

updated 11:15 pm EST, Fri February 17, 2012

Harbinger suied for LightSquared denial

LightSquared faced even deeper possible consequences from its revoked 4G network permission Friday after investors sued its parent company, Harbinger Capital Partners, for allegedly wasting money in the deal. Movie producer Lili Schad and others accused Harbinger of being "deceptive and misleading" by promising the LTE-based network only to have it rejected by the FCC over GPS interference concerns. Harbinger founder Philip Falcone (pictured) and his company either knew or were careless in ignoring that GPS would be a problem, the lawsuit said, and were costing investors "substantially all" of the money they had invested.

Investors hadn't been told that LightSquared would exist, or if they had that a minimum 60 percent of Harbinger's primary fund would go into it. The plan was reportedly very different than what investors were told. Schad personally invested $4 million and was hoping to get back whatever she had lost in investment value between October 2007 and the end of 2011.

Even on Friday, however, Falcone was fighting to keep the plan active. He and LightSquared have alleged a conspiracy, with staff in agencies like the NTIA supposedly having a vested interest in protecting the GPS industry by taking down a threat rather than fixing its own supposed interference problems. It may go so far as to ask for Defense Department spectrum rather than abandon plans.

The company still only has until mid-March to complete its deal if it wants to avoid losing a Sprint deal. A complete shutdown of the plans would have ripple effects for numerous small carriers that would buy time on the network as well as Sharp, which was preparing phones and tablets to enter the US. [image via Maggie's Notebook]



By Electronista Staff
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