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By Nick Brown
NEW YORK (Reuters) - LightSquared, the bankrupt wireless venture owned by Phil Falcone's Harbinger Capital Partners, has reached a deal to bring the company out of bankruptcy under control of lenders, according to a person close to the matter.
Harbinger had been fighting to keep at least some control of LightSquared by breaking up the company. However, the deal would keep the company together while distributing equity to lenders including Charles Ergen, chairman of Dish Network Corp, said the person, who declined to be named because the deal is not public.
The agreement comes on the heels of a second round of mediation, and sides have scheduled a hearing on Monday afternoon to reveal details of those talks.
Harbinger and Ergen had been embroiled in fierce litigation for more than a year over allegations by Harbinger that Ergen used underhanded means to acquire LightSquared's loan debt with an eye toward taking control of its assets on Dish's behalf. Ergen insisted he was interested in LightSquared only for his personal account.
The new deal still needs to be memorialized in a Chapter 11 plan, but appears to be a blow to Harbinger's hopes of salvaging control of LightSquared. The deal has enough support from stakeholders to receive court approval, the person said.
LightSquared, which promised high-speed wireless coverage across the United States, filed for chapter 11 protection in 2012 after regulators barred it from using its wireless spectrum because of fears of GPS interference.
(Reporting by Nick Brown in New York, writing by Tom Hals in Wilmington, Delaware; Editing by Nick Zieminski)