LightSquared Says Dish’s Ergen Wanted to Destroy Company
LightSquared said Dish Chairman Charlie Ergen’s intent in buying a large sum of its debt was to devalue and destroy the would-be wireless-broadband company.
In a bankruptcy hearing, legal representatives for LightSquared reiterated that Ergen fraudulently acquired $1 billion in LightSquared debt with the intent of benefitting Dish, according to a Bloomberg report.
Lawyers added that Ergen’s $2.2 billion bid for LightSquared, which has since been withdrawn, was issued in hopes of securing a better deal on LightSquared’s spectrum.
Ergen’s lawyers say their client’s debt purchases in LightSquared were not the cause of the company’s bankruptcy woes. LightSquared’s current predicament stems from regulators blocking wireless broadband deployment on its L Band spectrum over GPS interference concerns.
But if LightSquared and investor Philip Falcone get what they want, Ergen will end up forfeiting a $700 million investment he used to buy LightSquared debt.
LightSquared, which filed for bankruptcy protection in 2012, has been using the extra time to assemble a network proposal that would earn FCC approval. Meanwhile, the company is looking at three different restructuring plans: one from L-Band Acquisition Corporation, an ad hoc group of lenders including Ergen; one from MAST Capital and U.S. Bank; and one from LightSquared itself and its owner, Harbinger Capital.