The manager of the hedge fund backing LightSquared may give up his board seat to help the struggling mobile broadband company avoid bankruptcy, according to news reports.

Philip Falcone, who staked his Harbinger Capital Partners hedge fund on LightSquared, took a seat on the company’s board just two months ago and is now being asked to step down by the company’s lenders, The Wall Street Journal and Reuters reported today.

Representatives for LightSquared and Harbinger did not respond to requests for comment.

The lenders are said to have asked for Falcone’s resignation as part of negotiations to help LightSquared avoid bankruptcy.

LightSquared and its creditors have reportedly extended negotiations over $1.6 billion in debt for one week after it appeared they would be unable to reach a deal by Monday, an event which would have thrown LightSquared into default.

Falcone joined LightSquared’s board in February amid the resignation of CEO Sanjiv Ahuja, who announced he was stepping down two weeks after the FCC moved to stop LightSquared from moving forward with its plans for a wholesale LTE network because of problems with GPS interference. Ahuja kept his role as chairman of the company.

LightSquared has repeatedly said it will find a way to launch its mobile broadband service despite few obvious options to overcome government opposition to its plans.

LightSquared is running low on cash and cut nearly half of its staff to reserve capital. The company missed a $56.25 million payment due in February to Inmarsat, and later renegotiated its contract so it would not have to make future payments until it sorts out regulatory approvals for its network. A deal with Sprint to build and operate its network also has been put on hold.