The hedge fund manager Philip Falcone has agreed to scale back his role at the tottering wireless internet venture LightSquared as he fights to save the company from bankruptcy.
Mr Falcone's Harbinger Capital has sunk around $3bn (£1.8bn) into LightSquared, only to find that US regulators blocked its plans because they risked interfering with important GPS systems.
LightSquared's creditors yesterday agreed to a one-week extension of talks. Harbinger owns 94 per cent of LightSquared; the company's creditors include some of Mr Falcone's biggest hedge fund rivals.
The creditors demanded that he reduce his role at LightSquared over time, saying it would be easier to negotiate with US regulators without him. Mr Falcone waged a bitter war of words with the Federal Communications Commission and with lobbyists for the users of GPS services, saying the solution to any interference problem was to make GPS services live within their allotted bandwidth.
He agreed that his position as a director of LightSquared would be only temporary. "The board and the company need telecom and industry veterans, not hedge-fund managers," The Wall Street Journal reported.