Action on Ligado-Related Lawsuit Again Delayed

The $2 billion lawsuit filed by Harbinger Capital Partners against Apollo Global Management over whether Apollo knew about GPS interference issues has been stayed yet again—again at the request of Ligado Networks, the current holder of the frequencies involved.

The suit was filed in December 2017 but after a series of delays and now three stays it has failed to move forward. The latest stay pushes action back to May 22, 2019 when, the parties said, they might seek an additional stay.

Judge Saliann Scarpulla of the Supreme Court of the State of New York made clear, however, that she is running out of patience.

“OK but I can’t keep staying this action,” she added in a handwritten note at the bottom of the stipulation and proposed order granting the stay. She suggested the parties consider discontinuing the case without prejudice.

Ligado Networks is the successor firm to LightSquared, which filed bankruptcy in 2012 after its request to use satellite frequencies to also support a terrestrial network was set aside by the Federal Communications Commission. The frequencies were originally licensed to SkyTerra, which Harbinger had invested in. Harbinger then fully acquired the firm from Apollo Global, renaming it LightSquared.

Harbinger and its affiliates joining it in the suit are alleging Apollo and a list of other defendants knew as early as 2001 that terrestrial voice and data signals would overload GPS receivers but “carefully concealed these defects,” according to Harbinger’s complaint. “The Harbinger Funds were able to discover the truth only after the Company (LightSquared), having just emerged from bankruptcy, suddenly dropped a lawsuit that it had brought against a number of GPS companies concerning the interference issue—a lawsuit it had previously touted as meritorious and valuable—and settled it on such unfavorable terms that they suspected that the issue might not be blamed on the GPS companies. The Harbinger Funds therefore began an extensive investigation that eventually led to the discovery of defendants’ massive fraud.”

“This overload issue,” Harbinger wrote, “would effectively cripple receivers used by GPS and would be fatal to the millions of GPS devices already in use, many of which are critical to the national infrastructure and already widely used for aviation, safety, defense, and research purposes across the country.”

“We believe the suit lacks merit and we intend to defend ourselves vigorously,” a spokesperson for Apollo Global Management said in a written statement shortly after the lawsuit was filed.