Lightsquared files for bankruptcy -

After its plan to deliver high-speed wireless to as many as 260 million people were stuffed up by regulators, Lightsquared has filed for bankruptcy.

LightSquared has assets of $4.48 billion and debt of $2.29 billion so it might still survive in one form or another.

Creditors have requested that the company's backer, Philip Falcone, step aside although it looks like he and the current management team will remain with the company.

Some reports suggest that the bankruptcy is all a cunning plan to give LightSquared sufficient breathing room to continue working through the regulatory process.

Chief Financial Officer Marc Montagner said it could take two years before that process is complete.

Harbinger Capital Partners, Falcone's hedge fund, had invested $3 billion in LightSquared and owned about 74 percent of it.

Falcone said in a statement that bankruptcy was necessary to protect LightSquared against creditors who were looking for a quick buck. He claimed that the company will still press ahead.

Falcone's plan for LightSquared depended on winning FCC approval to convert airwaves originally designated for satellite service to spectrum for land-based radio towers.

But the FCC removed its approval after government tests found that the signals would interfere with global-positioning systems.

Falcone new plan is to get the government to swap his spectrum for that controlled by the US Defence Department.