So Harbinger-Backed LightSquared Might Kill Some People, So What?

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As you know, Harbinger Capital currently has a big bet going on a wireless company called LightSquared. Should it succeed, Phil Falcone will make billions and his investors will receive the triple digit returns they scored on subprime. Should it fail…we don’t even want to go there but someone will need to take in the family’s award-winning singing and dancing pig, who's made it clear he "doesn't do" 2-bedroom rentals North of 86th Street. So far, unfortunately, LightSquared, illiquid shares of which were recently awarded to redemption-seeking investors, has encountered a few bumps in the road (as one often does when one is doing groundbreaking, visionary-esque work). Most recently the company has been making the case that its satellite system will be huge for "coordinating enforcement and emergency response teams during natural disasters, like Hurricane Katrina." On the flip side, according to a new study by the FAA, it might kill a few hundred people.

A Federal Aviation Administration study quietly released this month says the proposed venture -- which could make or break Falcone's rocky career -- may cost 794 lives in aviation accidents over 10 years with disruptions to satellite-aided navigation.

But that's just ballparking it and even if the number is accurate, every great step forward in the history of man comes with collateral damage.

Falcone 4G: Kill Or Cure [NYP]

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Harbinger Capital-Backed LightSquared: What If We Told You We Could Build A Wireless Network That Doesn't Kill People Via GPS Interference? Does That Sound Like Something You'd Be Interested In?

As many of you know, the last year or so has been a pretty tough one for Phil Falcone. In addition to a civil suit against him by Harbinger Capital investors, DWAI's on the home front, and the pesky matter of being charged with securities fraud by the SEC, which would like to see him banned from the industry, what's really been plaguing him has been the opposition encountered by LightSquared, his dream and the thing he's more or less staked all his and his investors' money on. Before it entered Chapter 11 bankruptcy in May, the most serious charge against the company was that while it may seek to create "convenient connectivity for all," in doing so, the odds are high it would GPS interference that would result in boats getting lost at sea; "degrade precision services that track hurricanes, guide farmers, and help build flood defenses"; and, according to the FAA, "cost 794 lives in aviation accidents over 10 years with disruptions to satellite-aided navigation." Now, four months later, the would-be wireless network has come back with a plan: LightSquared, but without all the bad parts (for now). Philip Falcone's LightSquared on Friday made a proposal to the Federal Communications Commission that the company hopes will solve the regulatory issues surrounding its wireless satellite network and help it build its business faster without abandoning its long-term goals...LightSquared filed to modify its license application so it can use its five megahertz of spectrum that haven't caused GPS worries. It also seeks to use another five that it would share with federal-government users. The other filing, a rulemaking petition, calls for LightSquared to forego using the "upper" 10 MHz that have caused GPS concerns. In the meantime, it still wants the FCC to consider use of that 10 MHz but agreed to wait for and cooperate with "operating parameters and revised rules for terrestrial use of this spectrum." Don't get them wrong, they *want* to use the stuff that's possibly GSP harmful, but in the meantime will be happy to use the stuff that isn't, if that works for everyone. LightSquared Proposes Sharing Wireless Network With Government [DowJones]

Bonus Watch '13: LightSquared

LightSquared is a wireless venture that seeks to create "convenient connectivity for all." Unfortunately, as the Wilbur Falcone fans among us know, it's looking like it'll be a dark day in hell before that happens, on account of bunch of forces working together to shut this thing down at every turn, including but not limited to the yachting community that claims GSP interference caused by LS will result in boats getting lost at sea; the National Oceanic Atmospheric Administration, which has said LightSquared "may degrade precision services that track hurricanes, guide farmers and help build flood defenses"; and the FAA, which recently put out a study estimating LS could “cost 794 lives in aviation accidents over 10 years with disruptions to satellite-aided navigation.” Also not helping is that LightSquared filed for bankruptcy in May, the company is blowing through cash faster than Wilbur's Studio 54 days, and senior executives won't stop quitting. While some people might take stock of the situation and decide, at this point, to throw in the towel, Wilbur Falcone's benefactor is not some people. He's making this thing work if it's the last thing he does. So, what to do? Obviously a couple of miracle workers are going to be needed and the thing about miracle workers is that they don't come cheap. Gotta spend money to make money. Troubled wireless-satellite company LightSquared wants permission to dole out up to nearly $6 million in cash bonuses to four of its top employees, including its interim chief executive. Recent months have seen LightSquared burn through money--it has spent $134.3 million since filing for bankruptcy in May, according to its most recent monthly operating report, and executives alike. In court papers filed Wednesday, LightSquared said four senior executives have left the company in the past six months, including its former chairman of the board and CEO. The company wants to make sure four "irreplaceable employees" stick with the company as it attempts to claw its way out of bankruptcy protection and help to make the reorganization as fast and cheap as possible. LightSquared's bonus proposal paves the way for a "total possible cash payout of approximately $5.985 million" over two years, according to a filing with the U.S. Bankruptcy Court in Manhattan. Four employees--interim CEO, president and chairman of the board Douglas Smith; Chief Financial Officer Marc R. Montagner; general counsel Curtis Lu; and its executive vice president, regulatory affairs & public policy Jeffrey Carlisle--would be eligible for incentives consisting of cash and restricted stock units paid in shares of the company's current common stock. If the executives satisfy cash preservation goals, make progress in LightSquared's efforts to resolve certain regulatory issues and emerge from bankruptcy by the end of 2013, they'll receive vesting of all issued stock and "aggregate incentive payments of cash up to 285% of each such key employee's annual salary," LightSquared said. Hitting less aggressive goals, like exiting bankruptcy by the end of June 2014, would come with smaller payouts, like a cash bonus equal to 100% of the executives' annual salary, in the case of the mid-2014 bankruptcy exit. Mr. Smith currently makes $700,000 annually; Mr. Montagner and Mr. Lu $500,000 each; and Mr. Carlisle $400,000. LightSquared said each of the employees "provides critical services, drives performance, and impacts LightSquared's ability to enhance value in the Chapter 11 cases." The group has also had to take on extra work recently, as more and more employees have left LightSquared both voluntarily and involuntarily. The company said its total employee headcount has dropped by 60% in the last six months. The bonus plan aims to motivate the company's leaders to manage its businesses and working capital effectively and maximize the value of the estate for the benefit of all stakeholders, LightSquared said. LightSquared Seeks to Pay Key Executives up to $6M in Bonuses [DowJones]