NEW YORK, Jan 6 (Reuters) - Wireless network company

Ligado Networks LLC filed for bankruptcy in Delaware late on

Sunday, seeking to cut $7.8 billion in debt after U.S.

government agencies blocked its planned expansion into

land-based 5G wireless services.

Ligado had invested heavily in plans to expand its mobile 5G

network into a new spectrum that uses lower frequency radio

waves after receiving a U.S. Federal Communications Commission

permit in 2020. But the U.S. Department of Defense blocked the

planned expansion, saying Ligado's wireless signals would

interfere with military global positioning system (GPS)

receivers.

Ligado said in a statement on Monday that the bankruptcy

filing will allow it to address debts that are no longer

sustainable without the income it would have received from the

expansion.

A majority of the company's lenders have agreed to convert

$7.8 billion of debt into equity shares, which would reduce the

company's total debt to $1.2 billion, according to Ligado. The

company will continue to operate and provide mobile satellite

services during its debt restructuring.

Ligado sued the Defense Department and other U.S. agencies

over its access to additional spectrum 2023, saying that the

government's actions deprived it of up to $39 billion in

potential earnings from the FCC license. A federal judge in

Washington D.C. allowed the lawsuit to proceed in a November

2024 ruling, rejecting the U.S. government's attempt to dismiss

it.

Ligado president and CEO Doug Smith said in Monday's

statement that the company will continue to vigorously pursue

its litigation against the U.S. government. The Defense

Department declined to comment.

Ligado, formerly known as Lightsquared, previously filed for

bankruptcy in 2012.