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Bankrupt LightSquared sues Deere & Co, GPS industry titans

By Nick Brown

NEW YORK (Reuters) - Bankrupt LightSquared on Friday sued leaders in the GPS industry, including Deere & Co and Garmin International Inc, saying they kept mum about interference concerns stemming from LightSquared's wireless network until the company had already pumped $4 billion into building it.

In a 65-page lawsuit in U.S. Bankruptcy Court in New York, where LightSquared is fighting to keep control of its spectrum, the company alleged that farm equipment maker Deere, and GPS companies Garmin and Trimble Navigation Ltd led it to believe its network would not interfere with global positioning system devices.

The complaint comes on the heels of a similar lawsuit against the GPS industry by Phil Falcone's Harbinger Capital, LightSquared's controlling shareholder.

Last month, LightSquared received permission from the bankruptcy judge overseeing its Chapter 11 case to pause the Harbinger lawsuit so that LightSquared could decide whether it wanted to join the suit or bring claims of its own.

In Friday's filing, LightSquared says the companies made "promises, agreements and representations" over the 10 years that LightSquared spent building its network, all to the effect that a wireless network would not cause interference with GPS devices.

But in 2010, when LightSquared was close to deploying its network, the GPS industry changed its tune, the lawsuit says. As a result, the Federal Communications Commission revoked LightSquared's license to operate its spectrum, and the company was forced into bankruptcy in 2012.

"This case ... is about how those three GPS manufacturers waited until those billions were invested in the necessary network infrastructure before then breaking their prior promises, reneging on their prior agreements, and disavowing their prior representations," LightSquared says.

The lawsuit alleges that the only reason the interference concerns exist is that the GPS devices encroach upon the spectrum that LightSquared is licensed to operate. The nine-count complaint, which also names industry groups the U.S. GPS Industry Council and the Coalition to Save Our GPS as defendants, alleges breach of contract, tortuous interference and other claims.

A spokesman for Deere declined to comment, while a spokeswoman for Trimble did not immediately respond to a request for comment. A representative for Garmin could not immediately be reached.

LightSquared's bankruptcy has become a messy fight for control between Falcone and Charles Ergen, the chairman of DISH Network Corp, which is making a hard push to acquire the company's valuable spectrum.

The assets are likely to be auctioned off to the highest bidder, with Dish having already made a baseline offer for some of the spectrum.

LightSquared and its lenders have pushed competing proposals for the parameters of a sale, while Harbinger has put forth a plan that would restructure LightSquared without a sale. The plans are being voted on by creditors.

Doug Smith, LightSquared's chief executive, in a statement noted his company's "fiduciary duty" to "ensure that parties understand all of the assets of our estates more specifically."

"The unfortunate reality is that this company unnecessarily lost billions of dollars, and this lawsuit provides for interested bidders the factual background between LightSquared and the GPS industry," Smith said.

Last week, Ergen and Dish won dismissal of a lawsuit by Harbinger that had accused them of amassing loans to become LightSquared's biggest lender and then unlawfully using that position to try to wrest control of the company.

In September, LightSquared's bankruptcy judge nixed one of Harbinger's nominees to a committee to oversee the company's auction, citing a possible bias against Dish. The woman, Donna Alderman, had lost her job when Dish acquired her former employer, and said in emails that she felt "screwed" by the process.

(Reporting by Nick Brown; Editing by Tim Dobbyn)

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