Ligado Networks has filed a lawsuit against its contract partner, Inmarsat, following the company’s Chapter 11 bankruptcy filing. The legal action seeks to recover $1.7 billion in payments related to a 2007 spectrum leasing agreement. The dispute stems from allegations that Inmarsat failed to upgrade its satellite network as required under the agreement while still demanding payments from Ligado.
Background of the 2007 Spectrum Leasing Agreement
In 2007, Ligado Networks and Inmarsat entered into a spectrum leasing agreement, granting both companies rights to use radio frequencies for mobile communications and commercial purposes. According to Ligado, Inmarsat’s failure to upgrade its satellite terminals has significantly impacted Ligado’s operations, particularly its ability to monetize the leased spectrum.
Ligado’s Bankruptcy Filing and Debt Restructuring Plans
Ligado Networks filed for Chapter 11 bankruptcy on January 7, 2025, as part of a plan to restructure its operations. The company aims to reduce its debt from $8.6 billion to approximately $1.2 billion. Despite the bankruptcy filing, Ligado assured stakeholders that it will continue to provide mobile satellite services as usual.
Allegations Against Inmarsat
In its lawsuit, Ligado claims that over the past 17 years, it has paid Inmarsat over $1.7 billion in fees. However, Inmarsat allegedly neglected its contractual obligation to upgrade its satellite terminals, causing substantial delays and harm to Ligado. Doug Smith, CEO of Ligado, stated that Inmarsat’s actions have likely extended the upgrade timeline by years, preventing Ligado from fully leveraging its spectrum rights.
Inmarsat’s Response to the Lawsuit
Inmarsat has denied the allegations, asserting that Ligado’s complaint lacks legal merit. According to Inmarsat attorney Laura Davis Jones, Ligado is currently $500 million behind on its lease payments, with additional obligations accruing quarterly. Inmarsat maintains that the lawsuit is based on unfounded claims and is seeking to resolve the dispute in court.
Ligado’s Dispute with the US Government
In addition to its legal battle with Inmarsat, Ligado has also been embroiled in a dispute with the US government. Ligado claims that its spectrum rights were unlawfully taken by the government, which led to significant operational losses. The company filed a lawsuit in 2023 against multiple government agencies, including the Department of Defense, the Department of Commerce, and the National Telecommunications and Information Administration (NTIA), seeking compensation for its losses.
The Role of Viasat in the Dispute
Viasat, which acquired Inmarsat in 2023, has played a role in Ligado’s restructuring efforts. Ligado had hoped to reach a resolution with Viasat to address its significant payment obligations to Inmarsat. However, Ligado’s inability to secure an agreement with Viasat has prompted the current legal actions.
Key Takeaways
- Ligado Networks has sued Inmarsat for failing to fulfill its contractual obligations under a 2007 spectrum leasing agreement.
- Ligado’s bankruptcy filing is part of its debt restructuring plan, aiming to reduce its debt from $8.6 billion to $1.2 billion.
- The lawsuit seeks to recoup $1.7 billion in payments made to Inmarsat, alleging delays in upgrading satellite terminals.
- Inmarsat denies the claims, asserting that Ligado is behind on its lease payments.
- Ligado is also pursuing legal action against the US government for allegedly taking its licensed spectrum unlawfully.
FAQ Section
1. What was the agreement between Ligado Networks and Inmarsat?
The agreement, established in 2007, allowed Ligado Networks and Inmarsat to use radio frequencies for mobile communications and other commercial uses. Ligado claims Inmarsat failed to meet its obligations to upgrade satellite terminals as part of the deal.
2. Why did Ligado Networks file for Chapter 11 bankruptcy?
Ligado filed for Chapter 11 bankruptcy to restructure its $8.6 billion debt and reduce it to $1.2 billion. The filing is also part of efforts to continue operations and resolve legal disputes, including the one with Inmarsat.
3. What is Ligado’s legal dispute with the US government?
Ligado has accused the US government of unlawfully taking its licensed spectrum without compensation. This issue is central to the company’s financial difficulties, and Ligado is pursuing legal action against several government agencies, including the Department of Defense and the Department of Commerce.
4. How does Inmarsat respond to Ligado’s lawsuit?
Inmarsat denies the allegations, arguing that Ligado’s claims are unfounded and that the company is behind on its lease payments. They are actively defending the lawsuit in court.
5. What role did Viasat play in Ligado’s restructuring efforts?
Viasat, which acquired Inmarsat in 2023, was involved in discussions aimed at restructuring Ligado’s payment obligations to Inmarsat. However, Ligado’s inability to reach a resolution with Viasat has contributed to the current legal action.
