Judge Junks Harbinger Fraud Lawsuit Against Dish

Oct 31 2013 | 11:22am ET

Harbinger Capital Management's $4 billion fraud lawsuit against Dish Network and its chairman, Charlie Ergen, has been thrown out of court.

The hedge fund filed its suit in August, part of its battle to maintain control of wireless Internet venture LightSquared. Dish has offered $2.2 billion for that bankrupt company's assets and is expected to be the leading bidder for them.

Harbinger had alleged that Ergen secretly bought up more than $1 billion in LightSquared debt, in contravention of the company's credit agreement, which bars competitors from buying the debt. Ergen's lawyers responded that the lawsuit was Harbinger's "last-ditch effort to retain control of LightSquared."

U.S. Bankruptcy Judge Shelley Chapman heard arguments on Dish's dismissal bid on Tuesday before siding with the satellite company.

The scale of Dish's victory, however, is not clear. Chapman said that LightSquared, rather than Harbinger, could bring similar claims against Dish and Ergen. And the two sides did not appear to agree on exactly what Chapman ruled: Dish's lawyers said she threw out all of Harbinger's claims against Dish, while Harbinger's lawyers said she allowed one, an attempt to keep Ergen from collecting payments on his debt, to move forward.

Harbinger has also sought to block Ergen from being compensated as part of LightSquared's reorganization, saying that Sound Point Capital—the hedge fund Ergen used to acquire the debt—is "not a legitimate creditor."


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...