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Globalstar signs litigation settlement with shareholder

Globalstar Inc., a provider of mobile satellite telecommunications services, entered into a settlement agreement with Mudrick Capital Management LP, Warlander Asset Management LP and other litigation parties, according to a Dec. 17 news release.

In April, Globalstar signed a merger agreement with Thermo Cos.' metro fiber provider FiberLight LLC and agreed to buy several other assets. Mudrick Capital, the largest independent shareholder of Globalstar, said the merger was "unfair" and filed a complaint in Delaware's Court of Chancery. Globalstar later terminated the deal.

Under terms of the settlement, three new executives will be added to Globalstar's board. Keith Cowan, Ben Wolff and Mike Lovett will be appointed immediately, replacing three existing board members who volunteered to step down from their positions. Cowan and Wolff, who will be designated minority directors, will also be added to a newly established standing strategic review committee.

Thermo, meanwhile, will convert all of its outstanding subordinated debt into Globalstar common equity, subject to certain refinancing conditions.

The settlement also requires Globalstar to conduct an undiscounted equity offering of its common stock to qualified stockholders on a pro rata basis. Thermo, Mudrick Capital and Warlander agreed to purchase their pro rata share of any such offering and to backstop the balance offered to, but not purchased by, other Globalstar stockholders, on a pro rata basis based on the ownership of Globalstar's common stock.

The settlement is subject to confirmation and approval by the Delaware Chancery Court.