According to a report in The Wall Street Journal, hedge fund manager Philip Falcone will depart as the public face of LightSquared, which is a broadband wireless venture. The move should allow the company to avoid a default on of its debt. While creditors have extended the default deadline for only one week, the departure of Falcone may make it easier to get a waiver for as long as two years.
LightSquared had the potential of being a breakout technology. However, the federal government says it wants to block its use because the technology interferes with the satellite GPS network, which could pose national security issues.
Despite all this, LightSquared still has valuable assets and may be able to find a way to operate its system. And as seen with the strong growth of Apple’s (NASDAQ:AAPL) iPhone and Google’s (NASDAQ:GOOG) Android, a high-speed network would certainly be in high demand.
Much of LightSquared’s debt is owned by savvy Wall Street investors — like Carl Icahn and David Tepper — who will certainly negotiate hard with Falcone.