Dish’s Ergen to Control LightSquared in Newly Announced Deal

Dish Network Chairman Charlie Ergen would receive a controlling stake in troubled wireless company LightSquared under the company’s newest restructuring plan.

The deal, reached as a result of mediation with US Bankruptcy Judge Robert Drain, would give Ergen 60% of the new equity in the restructured LightSquared plus $1 billion in new junior debt. J.P. Morgan Chase Co. , one of LightSquared’s lenders, would receive a total of 31.9% of the equity and a seat on the board of directors in exchange for its debt and $189 million in funding. Other lenders would receive a smaller piece of equity and warrants to purchase common stock. The company would also raise between $750 million and $1 billion in fresh capital as part of the plan.

The proposal still faces hurdles -- mainly the approval of US Bankruptcy Judge Shelley Chapman. Previous proposals, including one reached through mediation with Judge Drain, have failed or have fallen apart.