LightSquared founder Phillip Falcone said he may consider voluntary bankruptcy for his troubled wireless broadband venture, Bloomberg reported on Wednesday. “There are arguments that we would be better off in bankruptcy than not,” Falcone said. “LightSquared, if I have to, I’ll put it into bankruptcy. I don’t care,” adding that he would maintain control of the company if it were to file. LightSquared planned to build a high-speed data network that would cover as many as 260 million users, however it failed to gain approval from federal regulators. The FCC blocked LightSquared’s LTE network in February due to concerns surrounding interference with GPS systems. Through his hedge fund Harbinger Capital Partners, Falcone has invested roughly $3 billion in the failed venture. Bankruptcy is “not what I want, not what I desire, I’d rather find a different way out,” he said. More →
Shares of Sprint stock fell 4.5% Monday morning after an analyst said there is an increasing risk that the nation’s third largest wireless carrier could file for bankruptcy. The company is facing increased competition, growing debt and steep costs, with flops in Clearwire’s WiMAX technology, a failed LightSquared partnership and a risky $15.5 billion gamble on Apple’s iPhone further complicating its position. Read on for more. More →
Kodak said it will stop making digital cameras, pocket video cameras and digital picture frames in order to focus on more profitable products, reports the Associated Press. The move isn’t surprising, as the company is slowly emerging from last month’s Chapter 11 bankruptcy filing. “Our goal is to maximize value for stakeholders, including our employees, retirees, creditors, and pension trustees,” Kodak said in a press release. The company’s digital camera and picture frame products will be phased out during the first of half of the year as Kodak instead focuses on photo printing and desktop inkjet printers. The company will continue to honor warranties and provide technical support for discontinued products, and the move is expected to result in annual savings of more than $100 million. More →
Kodak and its U.S. subsidiaries filed voluntary petitions for Chapter 11 bankruptcy on Thursday. The petition was filed in the Bankruptcy Court for the Southern District of New York. During the bankruptcy, Kodak hopes to bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, resolve legacy liabilities and focus on its most valuable business lines. “Our goal is to maximize value for stakeholders, including our employees, retirees, creditors, and pension trustees,” said the company in a press release. “We are also committed to working with our valued customers.” Kodak received $950 million in debtor-in-possession financing, which the company said should provide the assets needed to continue operations during the restructuring. “We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company,” said chairman and CEO Antonio Perez. Read on for Kodak’s press release. More →
Eastman Kodak could file for Chapter 11 bankruptcy protection this month or in early February according to a recent report. The troubled camera maker will likely file if it cannot sell 1,100 patents, The Wall Street Journal said Wednesday. The company is reportedly speaking with J.P. Morgan Chase & Co., Citigroup and Wells Fargo, and is asking for as much as $1 billion in debtor-in possession financing. The financing could help keep Kodak alive as it moves through the bankruptcy filing process. If Kodak does indeed have to file for Chapter 11, it will then try to sell its patents through the court in a bankruptcy auction, The Journal explained. Kodak may also soon be delisted from the New York Stock Exchange if it cannot recover within the next six months. More →
A bankruptcy judge on Thursday approved Dish Network’s winning bid and gave it the OK to acquire Blockbuster for $320 million. Dish’s bid topped other bidders including Cobalt Video, a group of hedge funds lead by Monarch Alternative Capital, and billionaire investor Carl Icahn earlier this week at an auction for Blockbuster’s business and assets. New York Judge Burton Lifland gave his approval in bankruptcy court, and Dish will now assume control of 1,700 remaining Blockbuster locations, the company’s DVD-by-mail business and its streaming video business. Now that a judge has approved the deal, Dish is expected to pay roughly $228 million for Blockbuster when factoring in the value of the fallen video giant’s remaining cash and other assets. Proceeds from the sale will help Blockbuster’s creditors, which include multiple movie studios and Carl Icahn, reclaim a portion of the $1 billion they are collectively owed. More →
The business of smartphone production is starting to look more like the a John Grisham legal novel. While handset makers try to out-innovate each other with high-end, spec-heavy handsets consumers will flock to, lawyers are trying to out-flank each other with patent suits and red-tape. No longer can you have an armada of talented engineers and a driven executive team, you also must possess a war chest of hardware and software patents to prevent your company from entering litigation limbo — just Google the words Nokia, Apple, and patent if you don’t know what we’re talking about. More →
The fate of Blockbuster is now up for auction. On Monday Blockbuster’s next owner, and future, will be decided. According to Reuters, it’s possible that a new owner could close the video rental chain, liquidate it entirely, or continue operations in a bid to compete with the likes of Netflix and the growing number of online media streaming services. Reportedly, Dish Network Corp. and Carl Icahn have already placed bids for the company, and SK Telecom is also interested. Monarch Alternative Capital LP opened the bidding at $290 million in February when Blockbuster put itself up for sale, and bids last week needed to be less than $296 million to qualify. It’s unclear how much Dish or Icahn bid on Blockbuster, but Dish Network reportedly has plans to continue building Blockbuster’s online movie offering should it win the auction. After a new owner is decided on Monday, it will have to be approved by bankruptcy judge on April 7th before the deal can move forward. Blockbuster filed for bankruptcy in September 2010. More →
Via a press release, Blockbuster has announced a “pre-arranged” bankruptcy in order to “recapitalize” and “substantially reduce its indebtedness.” The Chapter 11 filing will take the embattled company’s debt from roughly $1 billion down to $100 million; the filing is for the company’s U.S. branches only. “Blockbuster franchise locations in both the U.S. and abroad are independently owned, operated and funded, and are also continuing normal business operations,” explained the press release. Unfortunately, if you happen to hold some Blockbuster debt — and are not part of the company’s 11 “3/4 percent senior secured note holders” – you’re going to be out in the cold. “Under the proposed plan, there would be no recovery by the holders of the Company’s outstanding subordinated debt, preferred stock or common stock,” reads the filing. Hit the read link for the full release. More →
The Los Angeles Times is reporting that the once mighty Blockbuster will file for bankruptcy as early as next month. The Times quotes anonymous sources “familiar with the matter” in the report and explains that the filing could take five months and see 500 to 800 retail outlets closed. The company is seeking protection under Chapter 11 in order to restructure their current debt-load of roughly $1 billion (that’s billion with a “b”). The bankruptcy is being described as pre-planned, and most of Blockbuster’s creditors will have some sort of deal in place with the company when the filing is made official. More →
Blockbuster continues its downward spiral as it has been suspended from trading and forced to delist from the NYSE effective next Wednesday. Currently trading at $0.18 per share, Blockbuster failed to win majority stockholder approval last week for a reverse stock split that would have brought its stock above the $1 threshold and back in compliance with the NYSE. In a move that delays any immediate bankruptcy proceedings, Blockbuster was given a one-month reprieve on debt payments that the movie rental giant failed to pay on July 1st. The creditors, which hold nearly $440 million of Blockbuster’s whopping $920 million of debt, agreed to postpone any “remedies” until August 13th. In the upcoming weeks, Blockbuster is hoping to negotiate with partners to get a quick infusion of cash by possibly converting some bondholders to equity investors. This quick fix may be a little too little, a little too late and may only delay the inevitable bankruptcy as Blockbuster shows no signs of becoming profitable in the foreseeable future. More →
Canada-based Nortel, once North America’s largest telecommunications equipment manufacturer, filed for bankruptcy in January 2009 after a turnaround effort failed. As part of its bankruptcy proceedings, Nortel will sell its LTE and CDMA assets to Nokia Siemens for a cool $650 million. The acquisition will improve Nokia Siemen’s position in both North America and the growing LTE business. The acquisition is subject to approval from both the US bankruptcy court and the Ontario Superior Court of Justice but it’s expected to close in Q3 2009.
D-Day has arrived for the struggling satellite radio provider and for the time being, all is not lost. Liberty Media has indeed swooped in and pumped $530 million into Sirius XM in order to prevent the company from defaulting on $175 million in debt owed to Echostar today. Echostar’s Charlie Ergen had offered to take control of the company in an effort to “help” it avoid bankruptcy but the Sirius XM board seemingly wouldn’t even consider Ergen’s offer as a possibility. Instead, Sirius opted to work with Echostar’s biggest competitor – Liberty Media is the majority owner of DIRECTV while Echostar owns and operates the DISH Network fleet of satellites – giving Liberty 40 percent of the company and two seats on its board in exchange for the loan, $250 million of which will be funded today. Zing! Despite the fact that Ergen will get his $175 million in full today, something tells us he won’t be doing the happy dance.