UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
LEAP WIRELESS INTERNATIONAL, INC.
---------------------------------
(Name of Issuer)
Common Stock, Par Value $.0001 Per Share
----------------------------------------
(Title of Class of Securities)
521863308
---------
(CUSIP Number)
James E. Kaye, Esq.
Akin Gump Strauss Hauer & Feld LLP
590 Madison Avenue
New York, New York 10022
(212) 872-1000
------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 16, 2004
---------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Continued on following pages
Page 1 of 13 Pages
Exhibit Index: Page 12
SCHEDULE 13D
CUSIP No. 521863308 Page 2 of 13 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
MHR INSTITUTIONAL PARTNERS II LP
2 Check the Appropriate Box if a Member of a Group (See Instructions)
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
OO
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
[ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 3,340,378
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 3,340,378
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
3,340,378
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
5.57%
14 Type of Reporting Person (See Instructions)
PN
SCHEDULE 13D
CUSIP No. 521863308 Page 3 of 13 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
MHR INSTITUTIONAL PARTNERS IIA LP
2 Check the Appropriate Box if a Member of a Group (See Instructions)
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
OO
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
[ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 8,415,428
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 8,415,428
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
8,415,428
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
14.03%
14 Type of Reporting Person (See Instructions)
PN
SCHEDULE 13D
CUSIP No. 521863308 Page 4 of 13 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
MHR INSTITUTIONAL ADVISORS II LLC
2 Check the Appropriate Box if a Member of a Group (See Instructions)
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
[ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 11,755,806
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 11,755,806
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
11,755,806
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[ ]
13 Percent of Class Represented By Amount in Row (11)
19.59%
14 Type of Reporting Person (See Instructions)
OO
SCHEDULE 13D
CUSIP No. 521863308 Page 5 of 13 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
MARK H. RACHESKY, M.D.
2 Check the Appropriate Box if a Member of a Group (See Instructions)
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
[ ]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 11,755,806
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 11,755,806
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
11,755,806
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[ ]
13 Percent of Class Represented By Amount in Row (11)
19.59%
14 Type of Reporting Person (See Instructions)
IN
Page 6 of 13 Pages
Item 1. Security and Issuer
This Statement on Schedule 13D relates to shares of Common Stock,
par value $0.0001 per share (the "Shares") of Leap Wireless International, Inc.
(the "Issuer"). The address of the principal executive office of the Issuer is
10307 Pacific Center Court, San Diego, California 92121.
Item 2. Identity and Background
This Statement is being filed on behalf of each of the following
persons (collectively, the "Reporting Persons"):
(i) MHR Institutional Partners II LP ("Institutional Partners II");
(ii) MHR Institutional Partners IIA LP ("Institutional Partners
IIA");
(iii)MHR Institutional Advisors II LLC ("Institutional Advisors
II"); and
(iv) Mark H. Rachesky, M.D. ("Dr. Rachesky").
This Statement relates to the Shares held for the accounts of
Institutional Partners II and Institutional Partners IIA.
The Reporting Persons
Institutional Partners II and Institutional Partners IIA are
Delaware limited partnerships. The principal business of each of Institutional
Partners II and Institutional Partners IIA is investment in securities.
Institutional Advisors II is a Delaware limited liability company.
In its capacity as the general partner of each of Institutional Partners II and
Institutional Partners IIA, Institutional Advisors II may be deemed to be the
beneficial owner of securities held for the accounts of Institutional Partners
II and Institutional Partners IIA. The principal business of Institutional
Advisors II is to provide management and advisory services to Institutional
Partners II and Institutional Partners IIA. Current information concerning the
identity and background of the directors and officers of Institutional Advisors
II is set forth in Annex A hereto, which is incorporated by reference in
response to this Item 2.
Dr. Rachesky is the managing member of Institutional Advisors II. In
such capacity, Dr. Rachesky may be deemed to be the beneficial owner of
securities held for the accounts of Institutional Partners II and Institutional
Partners IIA. The principal occupation of Dr. Rachesky, a United States citizen,
is investment management.
Each Reporting Person's principal business address is 40 West 57th
Street, 24th Floor, New York, New York 10019.
During the past five years, none of the Reporting Persons and, to
the best of the Reporting Persons' knowledge, no other person identified in
response to this Item 2 has been (a) convicted in a criminal proceeding or (b)
been a party to any civil proceeding as a result of which he or it has been
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws, or finding any violation with respect to such laws.
Page 7 of 13 Pages
Item 3. Source and Amount of Funds or Other Consideration
On August 16, 2004, the Fifth Amended and Joint Plan of
Reorganization dated as of July 30, 2003, including certain technical amendments
thereto (the "Plan"), of the Issuer, Cricket Communications, Inc., a
wholly-owned subsidiary of the Issuer ("Cricket"), and substantially all of
their subsidiaries became effective, and such entities emerged from Chapter 11
bankruptcy proceedings pending in the United States Bankruptcy Court for the
Southern District of California (San Diego). Prior to the effectiveness of the
Plan, Comm Investors LLC and Geostar Investors LLC, each a Delaware limited
liability company wholly-owned by Institutional Partners II and Institutional
Partners IIA, held an aggregate of $328,537,370 in secured claims as creditors
of the Issuer and its subsidiaries (the "Secured Debt"). Upon the effectiveness
of the Plan, the Secured Debt was converted into Shares of the reorganized
Issuer and Cricket 13% Senior Secured Pay-in-Kind Notes due August 16, 2011 (the
"Senior Notes"). Comm Investors LLC and Geostar Investors LLC immediately
transferred such Shares and Senior Notes to Institutional Partners II and
Institutional Partners IIA in proportion to their respective ownership interests
in Comm Investors LLC and Geostar Investors LLC as follows: (i) 3,340,378 Shares
and $20,192,219 principal amount of Senior Notes to the account of Institutional
Partners II and (ii) 8,415,428 Shares and $50,870,349 principal amount of Senior
Notes to the account of Institutional Partners IIA.
Item 4. Purpose of Transaction
Dr. Rachesky was elected as a member of the Board of Directors of
the Issuer, effective August 19, 2004. In his capacity as a Director of the
Issuer, Dr. Rachesky may have influence over the corporate activities of the
Issuer, including activities which may relate to transactions described in
Subparagraphs (a) through (j) of Item 4 of Schedule 13D.
All of the Shares reported herein as having been acquired for or
disposed of from the accounts of Institutional Partners II and Institutional
Partners IIA were acquired or disposed of for investment purposes. Neither the
Reporting Persons nor, to the best of their knowledge, any of the other
individuals identified in response to Item 2 hereof, has any plans or proposals
that relate to or would result in any of the transactions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
The Reporting Persons reserve the right to acquire, or cause to be
acquired, additional securities of the Issuer, to dispose of, or cause to be
disposed, such securities at any time or to formulate other purposes, plans or
proposals regarding the Issuer or any of its securities, to the extent deemed
advisable in light of general investment and trading policies of the Reporting
Persons, market conditions or other factors.
Item 5. Interest in Securities of the Issuer
The percentages set forth herein assume that the Issuer has
60,000,000 Shares outstanding as of the date hereof.
(a) (i) Institutional Partners II may be deemed to be the
beneficial owner of 3,340,378 Shares (approximately 5.57% of the total number of
Shares outstanding).
(ii) Institutional Partners IIA may be deemed to be the
beneficial owner of 8,415,428 Shares (approximately 14.03% of the total number
of Shares outstanding).
(iii) Each of Institutional Advisors II and Dr. Rachesky may
be deemed the beneficial owner of 11,755,806 Shares (approximately 19.59% of the
Page 8 of 13 Pages
total number of Shares outstanding). This number consists of A) 3,340,378 Shares
held for the account of Institutional Partners II and B) 8,415,428 Shares held
for the account of Institutional Partners IIA.
(b) (i) Institutional Partners II may be deemed to have the sole
power to direct the voting and disposition of the 3,340,378 Shares for the
account of Institutional Partners II.
(ii) Institutional Partners IIA may be deemed to have the sole
power to direct the voting and disposition of the 8,415,428 Shares for the
account of Institutional Partners IIA.
(iii) Each of Institutional Advisors II and Dr. Rachesky may
be deemed to have the sole power to direct the voting and disposition of
11,755,806 Shares. This number consists of A) 3,340,378 Shares held for the
account of Institutional Partners II and B) 8,415,428 Shares held for the
account of Institutional Partners IIA.
(c) Other than as disclosed in Item 3 hereof, there have been no
transactions with respect to the Shares since June 27, 2004 (60 days prior to
the date hereof) by any of the Reporting Persons.
(d) (i) The partners of each of Institutional Partners II
and Institutional Partners IIA, including Institutional Advisors II, have the
right to participate in the receipt of dividends from, or proceeds from the sale
of, the securities held for the account of each of Institutional Partners II and
Institutional Partners IIA, as the case may be, in accordance with their
respective partnership interests in Institutional Partners II and Institutional
Partners IIA.
(ii) The members of Institutional Advisors II have the right
to participate in the receipt of dividends from, or proceeds from the sale of,
the securities held for the account of Institutional Advisors II in accordance
with their membership interests in Institutional Advisors II.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
On August 16, 2004, the Issuer, Institutional Partners II,
Institutional Partners IIA and Highland Capital Management, L.P. ("Highland")
entered into a Registration Rights Agreement (the "Registration Rights
Agreement," a copy of which is incorporated by reference hereto as Exhibit B and
is incorporated herein by reference in response to this Item 6). Pursuant to the
Registration Rights Agreement, the Issuer granted demand registration rights to
Institutional Partners II, Institutional Partners IIA and Highland with respect
to the Shares acquired by such entities under the Plan (as defined in Item 3
hereof) and agreed to prepare and file a shelf registration statement covering
such Shares. The Issuer is obligated to file this shelf registration statement
within 30 days following the issuance by the Issuer's independent public
accountants of an audit report concerning the Issuer's "fresh-start" financial
statements. The foregoing description of the Registration Rights Agreement does
not purport to be complete and is qualified in its entirety by the terms of such
document which are incorporated herein by reference.
As noted in Item 3 hereof, Institutional Partners II and
Institutional Partners IIA own principal amounts of $20,192,219 and $50,870,349,
respectively, of Senior Notes.
Page 9 of 13 Pages
From time to time each of the Reporting Persons may enter into
derivative securities transactions or other hedging arrangements with respect to
securities held for its account. Each Reporting Person may also lend securities
held for its account to brokers, banks or other financial institutions. These
loans typically obligate the borrower to return the securities, or an equal
amount of securities of the same class, to the lender and typically provide that
the borrower is entitled to exercise voting rights and retain dividends during
the term of the loan. From time to time, to the extent permitted by applicable
law, each of the Reporting Persons may borrow securities, including the Shares,
for the purpose of effecting, and may effect, short sale transactions, and may
purchase securities for the purpose of closing out short sale positions in such
securities.
Except as set forth herein, the Reporting Persons do not have any
contracts, arrangements, understandings or relationships with respect to any
securities of the Issuer.
Item 7. Material to be Filed as Exhibits
The Exhibit Index is incorporated herein by reference.
Page 10 of 13 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.
Date: August 26, 2004 MHR INSTITUTIONAL PARTNERS II LP
By: MHR Institutional Advisors II LLC,
its General Partner
By: /s/ Mark H. Rachesky, M.D.
-----------------------------------
Mark H. Rachesky, M.D.
Managing Member
MHR INSTITUTIONAL PARTNERS IIA LP
By: MHR Institutional Advisors II LLC,
its General Partner
By: /s/ Mark H. Rachesky, M.D.
-----------------------------------
Mark H. Rachesky, M.D.
Managing Member
MHR INSTITUTIONAL ADVISORS II LLC
By: /s/ Mark H. Rachesky, M.D.
-----------------------------------
Mark H. Rachesky, M.D.
Managing Member
MARK H. RACHESKY, M.D.
By: /s/ Mark H. Rachesky, M.D.
-----------------------------------
Page 11 of 13 Pages
ANNEX A
Directors and Officers of MHR Institutional Advisors II LLC
Name/Citizenship Principal Occupation Business Address
---------------- -------------------- ----------------
Mark H. Rachesky, M.D. President and Managing 40 West 57th Street, 24th Floor
(United States) Member New York, New York 10019
Hal Goldstein Managing Principal 40 West 57th Street, 24th Floor
(United States) New York, New York 10019
Except as otherwise set forth herein, to the best of the Reporting
Persons' knowledge:
(a) Other than as disclosed herein, none of the above persons
holds any Shares.
(b) None of the above persons has any contracts, arrangements,
understandings or relationships with respect to any Shares.
Page 12 of 13 Pages
EXHIBIT INDEX
Page No.
--------
A. Joint Filing Agreement, dated as of August 26, 2004, by
and among MHR Institutional Partners II LP, MHR
Institutional Partners IIA LP, MHR Institutional
Advisors II LLC and Mark H. Rachesky,
M.D...................................................... 13
B. Registration Rights Agreement, dated as of August 16,
2004, by and among the Issuer, MHR Institutional
Partners II LP, MHR Institutional Partners IIA LP and
Highland Capital Management, L.P. ....................... *
* Filed as Exhibit 10.1 to the Current Report on Form 8-K filed by Leap Wireless
International, Inc. with the Securities and Exchange Commission on August 20,
2004.
Page 13 of 13 Pages
EXHIBIT A
JOINT FILING AGREEMENT
The undersigned hereby agree that the Statement on Schedule 13D with
respect to the Common Stock of Leap Wireless International, Inc., dated as of
August 26, 2004, is, and any amendments thereto (including amendments on
Schedule 13G) signed by each of the undersigned shall be, filed on behalf of
each of us pursuant to and in accordance with the provisions of Rule 13d-1(k)
under the Securities Exchange Act of 1934.
Date: August 26, 2004 MHR INSTITUTIONAL PARTNERS II LP
By: MHR Institutional Advisors II LLC,
its General Partner
By: /s/ Mark H. Rachesky, M.D.
-----------------------------------
Mark H. Rachesky, M.D.
Managing Member
MHR INSTITUTIONAL PARTNERS IIA LP
By: MHR Institutional Advisors II LLC,
its General Partner
By: /s/ Mark H. Rachesky, M.D.
-----------------------------------
Mark H. Rachesky, M.D.
Managing Member
MHR INSTITUTIONAL ADVISORS II LLC
By: /s/ Mark H. Rachesky, M.D.
-----------------------------------
Mark H. Rachesky, M.D.
Managing Member
MARK H. RACHESKY, M.D.
By: /s/ Mark H. Rachesky, M.D.
-----------------------------------