Harbinger sues Deere and GPS companies for $1.9 billion in damages

As Reported by Reuters: Philip Falcone's Harbinger Capital on Friday sued agricultural equipment maker Deere & Co and Global Positioning System companies and groups for damages of $1.9 billion as it looks to recoup its investment in bankrupt wireless company LightSquared.

The lawsuit's defendants, who include GPS companies Garmin International and Trimble Navigation Ltd, had opposed LightSquared's plans to build a wireless network because of concerns it would interfere with GPS systems, which are used in everything from farming to airline navigation.

Other defendants include industry groups the U.S. GPS Industry Council and the Coalition to Save Our GPS.

Harbinger, which has spent billions of dollars on LightSquared, said in a complaint filed on Friday that it never would have made the investments if the GPS industry had disclosed potential interference problems between the LightSquared spectrum and GPS equipment between 2002 and 2009.

The hedge fund accused the defendants of fraud and negligent misrepresentation among other allegations, saying the defendants "knew years ago" all the material facts on which they based their opposition to the LightSquared network.

The diagram shows the RF spectrum overlap between the proposed LightSquared
signals, and the GPS/GLONASS signalling, which would have degraded
the GNSS signals making it potentially more difficult to extract critical
navigation information.

Trimble general counsel Jim Kirkland said the company would defend itself against the lawsuit he said was without merit. He disputed a Harbinger's assertion that the interference resulted from a problem with the design of GPS devices.

"This interference resulted from the characteristics of LightSquared's new plan for use of satellite spectrum, not the design of GPS devices. The responsibility for Harbinger's losses rests squarely with Harbinger," Kirkland said in an email.

Deere declined to comment on the case. Garmin was not immediately available for comment.

Falcone, once one of the hedge fund industry's most powerful figures, risked the future of Harbinger on a 96 percent ownership of LightSquared, in a bet that it would be able to become a new competitor to the U.S. wireless market.

But LightSquared had to file for bankruptcy protection in May 2012 after the U.S. Federal Communications Commission revoked permission to build out a new high-speed wireless network after tests showed that its network would interfere with GPS systems.

Falcone has also had legal problems himself. The U.S. Securities and Exchange Commission last year charged Falcone with market manipulation and other violations. In July the SEC voted to reject a deal its enforcement division had struck with Falcone without explaining its decision.

Harbinger filed the lawsuit on Friday in the U.S. District Court in Manhattan. Garmin International is a subsidiary of Garmin Ltd.