Private credit lender HPS Investment Partners has filed a lawsuit against the inflight connectivity provider Gogo, claiming that the company violated the terms of its debt agreement by failing to provide a payment of approximately $15m.
The complaint, filed yesterday (29 September) in New York State Court, alleges that Gogo did not provide an excess cash flow payment to HPS, as required in the debt documents that govern the $250m loan. The lawsuit comes as the company navigates negotiations with its lenders for an extension on its existing term loan debt, Bloomberg reported.
HPS initiated the lawsuit as the administrative agent on the private credit loan, arguing that the company claimed an equipment expense that was later reimbursed by the Federal Communications Commission, resulting in $29.3m of reported expenses that should have instead been applied to the company’s cash flows in the 2025 fiscal year. The result was a $15m shortfall in the excess cash flow sweep payment, the lawsuit alleges.
Excess cash flow sweeps are a common tool used by lenders in private credit documents to repay a portion of the principal loan should the company’s earnings exceed expectations. Gogo has a $40m cap in ECF...
