Harbinger, LightSquared Seek End To Dish Bid

Jan 6 2014 | 1:21pm ET

Harbinger Capital Management and its wireless Internet venture have asked a federal judge to throw out Dish Network's bid for the latter's assets, saying the offer wildly undervalues them.

Harbinger and LightSquared last week told U.S. Bankruptcy Judge Shelley Chapman that Dish's $2.2 billion offer for LightSquared's share of the electromagnetic spectrum is only a quarter of what that spectrum is worth under LightSquared's own reorganization plan. And they said that the bid's lowball nature is proven by Dish's own shareholders, who have bid up its stock price by 50% since Dish announced its offer.

"The debtors' secured creditors, with nothing to gain from the debtors' reorganization, continue to push for a sale liquidation to serve their parochial and largely illegitimate purposes," Harbinger's lawyers wrote. LightSquared's added, "There is no question how the market view such assets."

Chapman will hear arguments on the matter on Thursday.

Harbinger is fighting to maintain control of LightSquared, which it put into bankruptcy in 2012. LightSquared has been barred from building its planned 4G wireless network due to interference concerns with global positioning systems; LightSquared is attempting to swap its spectrum for spectrum without interference issues with the Federal Communications Commission.

Chapman is set to rule shortly on whether Dish's bid—as well as the proposed sale of a smaller part of LightSquared's spectrum to hedge fund Mast Capital Management and US Bancorp—can move forward. Later this month, Chapman will consider LightSquared's latest bankruptcy exit plan, back by Fortress Investment Group, Melody Capital Advisors, Harbinger and JPMorgan Chase. That deal requires the FCC's approval of LightSquared's spectrum-swap proposal.

Harbinger and LightSquared are also fighting to bar Dish Chairman Charles Ergen from collecting on some $1 billion in LightSquared debt that they say he fraudulently bought up in an effort to stymie its bankruptcy-exit plans.


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