Ligado Networks: $8.6B Debt-to-Equity Conversion After Decade-Long Spectrum Battle

Ligado Networks' January 2025 chapter 11 filing involved a company with billions in debt but no revenue, spectrum assets that it could not commercialize due to regulatory opposition, and a $39 billion lawsuit against the federal government. The Delaware bankruptcy court confirmed the company's reorganization plan on September 29, 2025, converting approximately $8.6 billion in funded debt to equity and enabling the reorganized entity to pursue both its AST SpaceMobile spectrum transaction and pending government litigation.

Despite receiving FCC authorization in April 2020 for nationwide L-band terrestrial operations, Ligado never generated commercial revenue. Opposition from the Department of Defense and Department of Commerce—citing GPS interference concerns—prevented the company from deploying its network and left it with debt obligations and no operating business. The case involved a pre-revenue capital structure and a restructuring that depended on spectrum licensing and litigation assets.

The L-Band Spectrum History: From LightSquared to Ligado

LightSquared Origins and 2012 Bankruptcy.

Ligado Networks' story begins with LightSquared, a company founded to develop L-band spectrum for mobile broadband services. LightSquared acquired spectrum assets with the vision of building a nationwide wireless network that would compete with established cellular carriers by leveraging satellite spectrum for terrestrial mobile services.

The original business plan ended in 2012 when regulators halted deployment plans over GPS interference concerns. The Federal Communications Commission had conditionally approved LightSquared's network, but government agencies and the GPS industry raised alarms that terrestrial transmissions in the L-band would interfere with GPS receivers used for aviation, agriculture, and military applications. After the National Telecommunications and Information Administration concluded that LightSquared's proposed network would cause harmful interference to GPS, the FCC withdrew its conditional authorization.

LightSquared filed for bankruptcy in May 2012, ultimately reorganizing and rebranding as Ligado Networks in 2016. Harbinger Capital Partners founder Philip Falcone, who had invested billions in the venture, saw his stake diluted significantly in the restructuring as creditors took control. The reorganized company emerged with the same spectrum assets and the same fundamental challenge: how to commercialize L-band frequencies in the face of GPS interference concerns.

FCC Approval and Continued Opposition.

After years of technical studies, modified proposals, and regulatory negotiations, Ligado received FCC nationwide authorization for L-band terrestrial use in April 2020. The approval came with technical conditions designed to protect GPS receivers, including reduced power levels and guard bands. The FCC concluded that Ligado's modified proposal would not cause harmful interference to GPS services.

Despite the FCC's authorization, the Department of Defense and Department of Commerce maintained their opposition, arguing that the agency's technical analysis was flawed and that Ligado's operations would still threaten military and civilian GPS systems. Congressional appropriations bills included provisions blocking the Defense Department from taking any actions that would accommodate Ligado's network. Executive branch opposition effectively prevented the company from implementing its business plans.

Ligado held an FCC license to operate but did not deploy network infrastructure because of inter-agency opposition. The company remained pre-revenue despite holding spectrum assets.

The Inmarsat Relationship.

Complicating Ligado's situation was its relationship with Inmarsat, the satellite communications company that operated adjacent spectrum and required coordination for L-band operations. Under a Cooperation Agreement, Ligado was obligated to coordinate its spectrum use with Inmarsat to avoid interference with Inmarsat's satellite services.

Ligado paid over $1.7 billion to Inmarsat under this arrangement, including a $700 million prepayment in 2020 that was intended to resolve interference issues and clear the path for commercial operations. When Viasat acquired Inmarsat in 2022, the relationship became more contentious. Disputes over terminal interference obligations and implementation requirements created additional uncertainty about when Ligado could commercialize its spectrum.

Negotiations between Ligado and Viasat broke down in 2024, contributing to the liquidity crisis that ultimately forced the bankruptcy filing.

Causes of Distress

Regulatory Gridlock.

Ligado's distress centered on regulatory opposition even after FCC approval. The company's business model required not just a license but the ability to build and operate a network.

The Department of Defense objected on national security grounds, arguing that Ligado's transmissions would degrade military GPS equipment used for precision weapons, navigation, and troop coordination. The Department of Commerce, through the National Telecommunications and Information Administration, supported the Pentagon's position. Congressional appropriations riders prohibited the Defense Department from taking any actions that would facilitate Ligado's network deployment.

This multi-agency opposition prevented Ligado from deploying its network. Ligado could hold its license, but it did not build the network.

Pre-Revenue Capital Structure.

Ligado's capital structure reflected an investment thesis that assumed regulatory resolution and commercial deployment. The company accumulated approximately $8.6 billion in funded debt, according to the First Day Declaration, to acquire spectrum, develop technology, fund regulatory proceedings, and sustain operations while waiting for deployment approval.

Without revenue-generating operations, Ligado could not service this debt burden. Interest obligations accrued, liquidity dwindled, and the company's owners—Centerbridge Partners, Fortress Investment Group, and JPMorgan Chase, with Harbinger retaining a minority stake—faced the limits of the capital structure.

Inmarsat Disputes and Liquidity Crisis.

The Inmarsat relationship represented both a cost center and a source of ongoing disputes. Having paid over $1.7 billion for coordination rights that proved insufficient for commercial deployment, Ligado faced continued obligations under the Cooperation Agreement without any offsetting revenue. Disputes over terminal interference and implementation requirements created litigation risk and drained management attention.

The breakdown of negotiations with Viasat in 2024 removed a negotiated path forward. With no path to revenue, mounting interest obligations, and ongoing legal disputes, Ligado's liquidity position deteriorated. The company filed to preserve value in the spectrum assets and pending litigation.

Pre-Arranged Restructuring Framework

Restructuring Support Agreement.

Ligado entered bankruptcy with a restructuring support agreement backed by approximately 88% of funded debt stakeholders. The RSA established the framework for reorganization: debt would convert to equity, the company would pursue the AST SpaceMobile transaction, and the government takings litigation would continue as a central asset for the reorganized enterprise.

The pre-arranged structure—negotiated but not yet solicited at filing—enabled an efficient chapter 11 process. Key terms were locked in before the petition date, reducing the uncertainty and negotiating friction that often extends large restructurings. The RSA parties included the Ad Hoc Group of lenders who would provide DIP financing and backstop the reorganization.

The AST SpaceMobile Transaction.

Central to Ligado's restructuring was a transaction with AST & Science, LLC—the company behind AST SpaceMobile's direct-to-device satellite technology. Under the agreement, Ligado grants AST usage rights to up to 45 MHz of L-band spectrum for 80+ years.

The deal structure reflects Ligado's inability to deploy its spectrum directly, instead monetizing it through a licensing arrangement. AST SpaceMobile is developing satellite-to-cellular technology that connects directly to standard smartphones without requiring specialized ground infrastructure.

The transaction consideration includes:

• $550 million in upfront cash and commitments
• Warrants in AST SpaceMobile (~$113 million value)
• Annual spectrum usage payments (~$80 million per year, with 3% annual increases through 2107)
• Revenue sharing on commercial operations

The transaction includes $550 million in upfront consideration plus ongoing usage payments over the 80-year term. For Ligado, the deal provides cash consideration and usage payments without requiring the company to deploy its own network.

A settlement with Inmarsat/Viasat announced in June 2025 facilitated the transaction by addressing spectrum coordination requirements that had plagued Ligado for years.

DIP Financing

$939 Million Facility Structure.

Ligado's DIP financing totaled up to $939 million, structured as a combination of new money and roll-up of prepetition claims.

The new money component funded in tranches: $12 million upon entry of the interim order, approximately $327 million to repay first-out obligations, and up to $103 million in delayed draw capacity. The roll-up converted prepetition superpriority claims into DIP claims, providing the lenders with enhanced priority and protections.

The DIP pricing reflected the risk profile: 17.5% PIK interest (or 15.5% cash at the borrower's election), plus substantial fees. The Ad Hoc Group of prepetition superpriority lenders provided the facility, maintaining their position through the restructuring.

DIP Approval and Objections.

The court entered an Interim DIP Order on January 8, 2025, providing initial liquidity to fund operations during the case. Inmarsat filed objections to the DIP financing, challenging the roll-up structure and arguing that the financing improperly subordinated its claims under the Cooperation Agreement.

The Final DIP Order entered on February 5, 2025, addressed objections and established the financing framework that would support the company through confirmation. The facility's flexible maturity structure—120 days with five possible extensions—accommodated the timeline needed to negotiate, solicit, and confirm the plan.

Plan of Reorganization

Debt-to-Equity Conversion.

The Amended Plan's core mechanism was converting approximately $8.6 billion in funded debt to new preferred equity, reducing leverage in the company's balance sheet. Each tier of prepetition debt received a different series of preferred units reflecting their relative priority.

The conversion reduced the debt burden. Post-emergence funded debt would be limited to approximately $1.2 billion under the Exit First Lien Facility, representing the converted DIP claims.

Creditor Treatment.

Plan Features.

Several aspects of Ligado's plan differed from typical large chapter 11 cases:

General unsecured creditors paid in full. Trade creditors and other general unsecured claimants received 100% cash recovery—a rarity in cases with this level of debt distress. The company's lack of operating business meant minimal trade debt, and the plan's structure prioritized maintaining relationships for post-emergence operations.

Existing equity preserved. Existing preferred and common unit holders received reclassified equity rather than cancellation. In most chapter 11 cases, the absolute priority rule means equity receives nothing when creditors are not paid in full. Here, the debt-to-equity conversion created a new capital structure where former debt holders became the primary equity owners, but existing equity retained a position—albeit diluted.

Reorganization, not liquidation. Despite having no operating business, Ligado reorganized as a going concern. The company's value resided in the AST transaction, the pending government litigation, and the retained spectrum licenses. The plan provided for reorganization rather than liquidation.

The $39 Billion Government Takings Lawsuit

Litigation Overview.

Ligado's pending lawsuit against the United States government seeks compensation for what the company characterizes as an unconstitutional taking of its spectrum rights. Filed in October 2023 in the Court of Federal Claims, the lawsuit seeks more than $39 billion—exceeding the company's entire funded debt.

The legal theory centers on the Fifth Amendment's takings clause, which requires the government to provide just compensation when it takes private property. Ligado argues that executive branch actions—particularly the Defense Department and Commerce Department's campaign against the company's FCC-authorized operations—constituted a regulatory taking of valuable spectrum rights.

According to court filings, the government's "misinformation campaign" misrepresented the interference threat from Ligado's operations, Congress relied on these misrepresentations in blocking deployment, and the combined effect was to render Ligado's spectrum licenses commercially worthless. The company claims the government effectively confiscated billions in property value without compensation.

Litigation Status.

The litigation survived initial motions to dismiss in November 2024, with the Court of Federal Claims allowing the takings claims to proceed. The government's appeal of this ruling is pending, but discovery and briefing continue in the meantime.

The plan preserves the litigation, and recoveries depend on the lawsuit's outcome.

The plan of reorganization specifically preserves the litigation, ensuring that the reorganized company can continue prosecuting the claims post-emergence. Creditors' ultimate recovery depends substantially on the lawsuit's outcome.

Inmarsat/Viasat Adversary Proceeding

Dispute Background.

Ligado's relationship with Inmarsat—now part of Viasat following the 2022 merger—generated significant litigation during the chapter 11 case. The Cooperation Agreement governing spectrum coordination had obligated Ligado to make substantial payments and meet certain technical requirements. Having paid over $1.7 billion under this agreement without achieving commercial operations, Ligado filed an adversary proceeding seeking damages for breach.

The disputes centered on:

• Terminal interference obligations: What modifications to Inmarsat terminals were required, and who bore responsibility for implementation
• Implementation requirements: Whether Inmarsat fulfilled its coordination duties under the agreement
• Payment obligations: The scope and timing of payments owed under the agreement
• Breach claims: Each party alleged the other failed to perform

Bankruptcy Litigation and Mediation.

The adversary proceeding sought over $1.7 billion in damages against Inmarsat Global Limited. The parties engaged in mediation during the bankruptcy, reaching a Mediated Agreement that appeared to resolve certain issues.

However, subsequent disputes arose over the interpretation and enforcement of that mediated agreement. On September 2, 2025, the court entered an order denying motions to enforce the Mediated Agreement, leaving significant issues unresolved heading into confirmation.

Inmarsat also filed objections to the DIP financing and raised concerns about how the plan would treat its rights under the Cooperation Agreement. These objections were addressed through the confirmation process, though the underlying commercial disputes continue post-emergence. The June 2025 settlement term sheet among Ligado, AST SpaceMobile, and Viasat (as Inmarsat's successor) helped facilitate the AST transaction by addressing spectrum coordination requirements, with Viasat agreeing to support the regulatory applications needed for the AST deal and removing a potential obstacle to plan confirmation.

U.S. Government Objection

The United States government filed objections to Ligado's plan raising concerns about bankruptcy court jurisdiction and creditor releases. The objection argued that the plan impermissibly expanded bankruptcy court jurisdiction over the government beyond what the Bankruptcy Code permits, that release provisions would discharge claims against non-debtor parties without government consent potentially affecting the pending takings litigation, that the plan failed to preserve the government's rights to setoff or recoupment, that transfer of FCC licenses required regulatory approval and potentially violated Anti-Assignment Act restrictions, and that certain provisions allegedly infringed on FCC regulatory authority.

The plan underwent modifications to address government concerns. Provisions were narrowed to preserve the government's rights in the takings litigation and ensure that the plan did not improperly expand bankruptcy court jurisdiction over sovereign matters. The Confirmation Order incorporated protections for government interests, enabling confirmation to proceed without ongoing government opposition.

U.S. Trustee Objections

The U.S. Trustee raised concerns about plan feasibility and third-party releases. Given that Ligado's primary asset was litigation with uncertain outcomes, the U.S. Trustee questioned whether the plan demonstrated sufficient likelihood of success to meet confirmation standards.

The third-party release provisions—structured with an opt-out mechanism rather than requiring affirmative consent—drew particular scrutiny. Following recent developments in release jurisprudence, the U.S. Trustee questioned whether the opt-out structure complied with applicable standards.

Plan amendments addressed these concerns, with the debtors demonstrating feasibility through the AST transaction terms and modifying releases to comply with Delaware standards. The Confirmation Order entered September 29, 2025 resolved U.S. Trustee objections.

Boeing Satellite Systems Dispute

Boeing Satellite Systems, Inc. raised claims related to the SkyTerra-2 satellite, a legacy asset from Ligado's earlier operations. The dispute involved allegations of satellite damage, failure to repair, and ongoing contractual obligations under the SkyTerra Contract. Boeing filed a motion to compel assumption or rejection of the contract, seeking clarity on whether the reorganized company would continue the relationship. Cure amount disputes required additional proceedings to determine what amounts—if any—Ligado owed to assume the contract.

The parties reached a stipulation resolving the immediate disputes, with cure amount litigation scheduled for subsequent proceedings. The SkyTerra Contract treatment was addressed through the plan, allowing confirmation to proceed while preserving Boeing's rights to litigate disputed amounts.

Case Timeline

Telecommunications and Spectrum Industry Context

L-Band Spectrum Value.

L-band spectrum occupies frequencies around 1.5-1.6 GHz, historically used for mobile satellite services. The frequencies are valuable because they propagate well through the atmosphere and can support satellite-to-ground communications with relatively small antennas.

Ligado's spectrum holdings sit adjacent to GPS frequencies, which creates interference concerns when L-band spectrum is used for high-power terrestrial transmissions.

The GPS industry and military users have successfully argued that any terrestrial L-band network would degrade GPS receiver performance, even at the power levels approved by the FCC. Whether this concern is technically justified remains disputed, but the political reality is that GPS protection has proven more important to policymakers than L-band commercial development.

AST SpaceMobile and Direct-to-Device Technology.

AST SpaceMobile represents a different approach to mobile satellite communications. Rather than building terrestrial towers that transmit in satellite bands—Ligado's original plan—AST is deploying satellites with large antenna arrays that connect directly to standard smartphones.

This technology operates satellite-to-device rather than tower-to-device.

For Ligado, the AST transaction provides cash consideration and usage payments. The company licenses its spectrum rights to a partner pursuing regulatory approvals.

Regulatory Risk in Spectrum Development.

Ligado's experience highlights regulatory risk for spectrum assets:

FCC approval is necessary but not sufficient. The FCC grants licenses, but other agencies—Defense, Commerce, NTIA—can effectively block deployment through interagency processes, congressional lobbying, and appropriations riders.

Regulatory timelines are unpredictable. Ligado spent over a decade pursuing authorization, accumulated billions in debt, and still never reached commercial operations. Investment models that assume regulatory resolution within specific timeframes face substantial risk.

Multi-agency coordination is challenging. When multiple federal agencies have jurisdiction over spectrum use, resolving conflicts requires political capital beyond what most companies possess. The Defense Department's influence over spectrum policy is particularly difficult to overcome.

Stranded assets are possible. A company can hold valuable spectrum rights and still fail if regulatory barriers prevent monetization. Ligado's spectrum was always valuable in theory; the challenge was converting that theoretical value into revenue.

Professional Roster

Debtors' Professionals.

Special Litigation Counsel.

Ordinary Course Professionals.

Post-Emergence Outlook

Reorganized Capital Structure.

The reorganized company emerges with a different balance sheet:

• Exit First Lien Facility: ~$1.2 billion (converted from DIP)
• Preferred Equity: Former $8+ billion debt holders
• Common Equity: Reclassified existing holders (diluted)

The deleveraged structure enables operations that were impossible under the prepetition debt burden. Without billions in interest obligations, the company can pursue strategic options and wait for litigation outcomes without immediate liquidity pressure.

Value Drivers.

AST SpaceMobile Transaction: The $550+ million spectrum deal plus 80-year usage payments ties Ligado's future to AST's commercial success.

Government Takings Lawsuit: The $39+ billion pending claim represents the primary upside opportunity. A favorable judgment or substantial settlement would generate recoveries far exceeding what the AST transaction alone provides.

Retained Spectrum Assets: Ligado continues to hold L-band licenses, preserving optionality for future monetization through additional licensing arrangements.

Inmarsat Claims: The adversary proceeding continues post-emergence.

Strategic Positioning.

The reorganized Ligado is positioned very differently than its pre-bankruptcy iteration. Rather than attempting to build and operate a network—a strategy that failed over two decades—the company now functions as a spectrum licensor and litigation vehicle.

The AST transaction provides consideration without requiring Ligado to deploy its own network. Revenue sharing ties the company's results to AST's commercial success.

The restructuring preserves Ligado's ability to pursue the litigation.

Frequently Asked Questions

Why did Ligado Networks file for bankruptcy?

Ligado filed chapter 11 in January 2025 because it could not service approximately $8.6 billion in funded debt without commercial revenue. Despite receiving FCC authorization in 2020 for nationwide L-band terrestrial operations, opposition from the Department of Defense and Commerce Department prevented deployment. The company remained pre-revenue with mounting debt obligations and no path to commercialization.

What is the $39 billion government lawsuit about?

Ligado claims the U.S. government took its spectrum rights without just compensation, violating the Fifth Amendment's takings clause. The company argues that executive branch actions—particularly the Defense Department's opposition campaign—blocked deployment and reduced the value of its spectrum rights. The lawsuit seeks over $39 billion in damages and is a central asset in the reorganization.

What is the AST SpaceMobile transaction?

Ligado granted spectrum usage rights to AST & Science, LLC (parent of AST SpaceMobile) for up to 45 MHz of L-band spectrum over 80+ years. The consideration includes $550 million in initial value (warrants, notes, cash) plus annual usage payments (~$80 million per year with 3% annual increases) and revenue sharing. The deal allows Ligado to monetize spectrum without deploying its own network.

What do creditors recover?

DIP lenders convert to the Exit First Lien Facility (100% converted). Secured creditors—holding approximately $8.6 billion in first lien, 1.5 lien, and second lien claims—receive new preferred equity through debt-to-equity conversion. General unsecured creditors are paid in full (100% cash). Existing equity holders receive reclassified units rather than cancellation.

What happened with Inmarsat/Viasat?

Ligado paid over $1.7 billion to Inmarsat under a Cooperation Agreement for spectrum coordination. Disputes arose over implementation and interference obligations. Ligado filed an adversary proceeding seeking damages for breach. A June 2025 settlement with Viasat (Inmarsat's successor) facilitated the AST transaction, though underlying commercial disputes continue.

Is this Ligado's second bankruptcy?

Effectively yes—a "Chapter 22." Ligado's predecessor, LightSquared, filed bankruptcy in 2012 amid GPS interference controversy. LightSquared reorganized and rebranded as Ligado Networks in 2016 but never resolved the underlying regulatory challenges that caused the first filing. The same L-band spectrum and similar regulatory obstacles led to the second bankruptcy.

What is DIP financing?

Ligado's DIP facility provided up to $939 million: approximately $442 million in new money loans and $442-$497 million in roll-up of prepetition claims. The facility carried 17.5% PIK interest and funded operations through the 9-month case. DIP claims convert to the Exit First Lien Facility post-emergence.

How long was the bankruptcy?

Ligado filed on January 6, 2025 and received plan confirmation on September 29, 2025—approximately nine months. The pre-arranged restructuring support agreement with ~88% of funded debt stakeholders enabled an efficient process despite complex litigation and disputes.

What is L-band spectrum?

L-band refers to radio frequencies around 1.5-1.6 GHz used for mobile satellite services. The spectrum is valuable for satellite-to-ground communications but sits adjacent to GPS frequencies, creating interference concerns when used for high-power terrestrial transmissions. This GPS proximity has been the central obstacle to Ligado's commercialization efforts.

What happens to Ligado's spectrum licenses post-emergence?

Ligado retains its FCC L-band licenses as the reorganized entity. Usage rights for up to 45 MHz are licensed to AST SpaceMobile under the transaction, but Ligado remains the license holder. The company continues as a going concern, positioned as a spectrum licensor and litigation vehicle rather than a network operator.

Who is the claims agent for Ligado Networks?

Omni Agent Solutions, Inc. serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

For comprehensive bankruptcy coverage and restructuring analysis across the telecommunications sector, explore the ElevenFlo Bankruptcy Blog.