Erstwhile wholesale LTE provider LightSquared (news) will be getting a new public face before long. In order to sidestep a default on its debt, Philip Falcone has supposedly agreed to step aside from his current hands-on approach to running the company. Lenders have given the company until 10am this morning to strike a deal.
Reports are necessarily vague on just what that means, since Falcone isn't the company's CEO or even Chairman of the Board - it's just that his hedge fund owns 96% of the equity and he's been so directly involved in the whole thing. The company's lenders apparently want him off the front lines.
LightSquared lost the regulatory battle over its rights to build out a wholesale LTE network using spectrum previously assigned to satellite providers. The GPS industry objected and, while LightSquared still contests the results of testing and the viability of a technical fix, the FCC eventually took the safer road and just made the whole mess go away.
While the lawyers fight on, there is currently little reason to think the light at the end of the tunnel is not a train. The CEO has left, Sprint canceled their multi-billion dollar wholesale deal, the company is conserving cash by cutting 45% of its workers, and Falcone has publicly mentioned BK as a possibility. There's nothing pleasant about any of this.