LightSquared in deal to hand control to Ergen By Nick Brown and Billy Cheung NEW YORK (Reuters) - LightSquared, the bankrupt wireless venture owned by Phil Falcone's Harbinger Capital Partners, has reached a deal to bring the company out of bankruptcy under the control of its largest lender, Dish Network Corp (DISH.O) Chairman Charles Ergen. Harbinger had been fighting to keep some control of LightSquared by breaking up the company, even as lawyers for LightSquared supported a plan to keep it together. The latest deal, struck between LightSquared and its lenders, would avoid a breakup while distributing equity to lenders. Ergen would nab a controlling 60 percent stake, and provide $1 billion of a $2.2 billion post-bankruptcy junior loan, lawyers revealed on Monday at a hearing in U.S. Bankruptcy Court in Manhattan. LightSquared, which had promised high-speed wireless coverage across the United States, filed for Chapter 11 protection in 2012 after regulators barred it from using its wireless spectrum because of fears it would interfere with the Global Positioning System (GPS). A source familiar with negotiations told Reuters earlier on Monday that the parties had struck a deal. Harbinger and Ergen had been embroiled in litigation for more than a year over allegations by Harbinger that Ergen was out to wrest control of LightSquared's assets on Dish's behalf. Ergen, who had acquired about $1 billion of LightSquared loan debt, insisted the investment was only for his personal account. The agreement comes on the heels of a second round of mediation and several unsuccessful restructuring proposals, and could spell doom for Harbinger's hopes of salvaging control. In August, Harbinger proposed breaking up the company and retaining a stake in its LightSquared Inc unit, but Judge Shelley Chapman effectively nixed that plan last week, ruling other lenders had superseding claims against the "Inc" unit. Under the deal announced on Monday, which has the support of all stakeholders except Harbinger, LightSquared would obtain a $750 million credit line in addition to the $2.2 billion junior loan. While Harbinger could again try to propose a competing restructuring proposal, it may have a hard time finding financiers now that all major stakeholders support the latest plan. Harbinger argued the deal would give Ergen a windfall far exceeding his claims against LightSquared. Judge Chapman said there was no guarantee the plan would gain her approval. "Maybe the plan is not confirmable," she said, pointing out that the sides could still use mediation to try to reach a deal supported by Harbinger. The deal needs to be memorialized in the form of a Chapter 11 plan, which lawyers hope to file by Nov. 14, and then brought again before Judge Chapman for approval. Reporting by Nick Brown and Billy Cheung in New York; Editing by Nick Zieminski and Andre Grenon