LightSquared Director Off Auction Committee

Sep 25 2013 | 12:11pm ET

A federal judge has barred a LightSquared board member from serving on the special committee overseeing its planned bankruptcy auction.

U.S. Bankruptcy Judge Shelley Chapman ruled that Donna Alderman cannot serve on the committee, handing a victory to creditors of the Harbinger Capital Management-owned wireless Internet venture. Those creditors, led by Dish Network Chairman Charles Ergen, argued that Alderman was biased against Dish, which has offered $2.2 billion for LightSquared's assets.

Alderman was fired after Dish acquired her former employer, DBSD North America. When the company refused to pay her the $7 million she sought, she allegedly told Dish lawyers that she was "being screwed" by the company and was "extremely disappointed… in Dish."

"Let's cut to the chase," Chapman said. "You had a list of a dozen candidates. And yet we have someone who has caused, with all due respect, a tremendous amount of controversy and raised the specter of yet another sideshow. Frankly, I don't understand it."

"There are other folks out there who can do this."


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