Forward Motions: LightSquared Confirmation Hearing Continues

Next week in New York, LightSquared will continue making the case for the approval of its $2.65 billion restructuring proposal. The plan, led by Fortress Investment Group, is being opposed by Dish Network Corp. Chairman Charlie Ergen. Mr. Ergen owns $850 million in LightSquared’s bank debt, making him the company’s largest secured lender.

But LightSquared is suing Mr. Ergen over his purchases of that debt, saying he improperly acquired it on behalf of Dish, a LightSquared competitor prohibited from buying it. Mr. Ergen says he bought it as a personal investment.

Both Mr. Ergen and Harbinger Capital Partners’ Philip Falcone, who controls LightSquared’s equity, are expected to testify during the confirmation hearing.

Amid the confirmation, LightSquared’s bankruptcy judge, Shelley C. Chapman, will on Tuesday consider approving a bonus package for the company’s top executives.

LightSquared wants to alter the proposed package by removing the regulatory hurdles tied to the payments.

The company now wants to pay Chief Executive Doug Smith, Chief Financial Officer Marc Montagner, Executive Vice President Jeffrey Carlisle and General Counsel Curtis Lu bonuses of 75% of their annual salaries once the company pays off a bankruptcy loan and the hedge funds that hold its bank debt. It wants to pay another 75% for a “successful completion of a change of control.”

On Thursday in Chicago, a judge will consider approving a settlement between Peregrine Financial Group’s trustee and the ex-wife of the failed firm’s founder.

Connie J. Wasendorf, wife of imprisoned Peregrine founder Russell Wasendorf Sr., agreed to return $2.85 million she received as part of the couple’s 2010 divorce.

In return, the trustee, attorney Ira Bodenstein, will drop litigation seeking the return of $3.46 million that Ms. Wasendorf received from Mr. Wasendorf.

According to the trustee, Mr. Wasendorf, 66, didn’t use his own funds to make the payment but instead used Peregrine funds as well as money from its customer accounts.

Mr. Wasendorf, Peregrine’s founder and its former chief executive, is serving a 50-year prison sentence after pleading guilty to charges of mail fraud, embezzlement and lying to regulators.

-Jacqueline Palank contributed to this article.

Write to Joseph Checkler at [email protected]. Follow him on Twitter at @JoeCheckler.