LightSquared set for Chapter 11 LightSquared, the satellite venture of Philip Falcone, was expected to file for bankruptcy protection on Monday, after the billionaire investor was unable to reach agreement with creditors. Talks between the parties broke down last week, and the company spent the weekend preparing to file before a 5pm expiry to a covenant waiver agreed by holders of LightSquared's $1.6bn of debt, said people familiar with the situation. The group, which is attempting to build a 4G wireless network to challenge the incumbent telecoms companies in the US, has been in technical default since the US government withdrew support for the venture in February. Citing possible interference with widely used GPS navigation equipment, the Federal Communications Commission withdrew a special waiver that the company needed in order to proceed with the building of the network. Bondholders had granted a series of waivers as the two sides have sought to find a resolution, but terms could not be agreed, the people said. Creditors had sought to remove Mr Falcone from the board, and gain control of the venture. Mr Falcone has said he could seek Chapter 11 bankruptcy protection from creditors and still retain control of LightSquared, because of the value of its radio spectrum. The bankruptcy procedure would also give Mr Falcone continued control of the group for several months, and the opportunity to craft a plan for the group to emerge as a going concern. It would also provide the billionaire with more time to petition the government to reverse its stance on the interference, or to seek legal remedies. Mr Falcone's Harbinger Capital has invested $3bn in a project that was first granted a licence by the FCC in 2004. Interference issues, which Mr Falcone said were the fault of the GPS equipment makers, were only discovered in late 2010. The LightSquared proposal remains politically contentious, with some questioning the process for the initial granting of the licence, while others support it because they believe it will help boost the availability of broadband connectivity across the US and provide additional competition for the incumbent wireless service providers. An exchange of LightSquared spectrum for a part of the airwaves that did not interfere with navigation devices might also be one possible resolution, said a person familiar with the company's thinking. However, LightSquared suffered a further serious setback this year when Sprint Nextel, the third-largest US mobile network operator by subscriber numbers, abandoned a 15-year spectrum hosting deal with LightSquared under which it would have built the LightSquared LTE network. Lenders to the group would also have to bless any plan that the group ultimately submits to the bankruptcy court.