Tuesday, 28 June 2016
Last updated 7 min ago
Jan 9 2014 | 2:06pm ET
Dish Network has dropped its $2.2 billion offer for Harbinger Capital Management's wireless Internet venture, handing an apparent—and once almost inconceivable—victory to Harbinger founder Philip Falcone.
A lawyer for the LightSquared committee overseeing the potential auction of the bankrupt company's assets told a court today that Dish had withdrawn its bid. The move comes a month after LightSquared canceled an auction—at which Dish was to be the lead bidder—following a richer restructuring proposal led by Centerbridge Partners.
Centerbridge quickly dropped out of that offer, but its move bought LightSquared and Harbinger time to file a competing proposal to that offered by Dish.
Dish's offer has also been controversial. The company's chairman, Charles Ergen, had bought up more than half of LightSquared's debt; LightSquared and Harbinger accused Ergen both of fraudulently acquiring the debt and then using it to block its bankruptcy exit proposals.
Even in death, the bid remains controversial: LightSquared's lenders, who strongly backed the Dish offer, on Tuesday accused Dish of breaching its contract by refusing to go through with the deal. A lawyer for Dish and Ergen said that she didn't think Dish had done so—but Dish had not withdrawn its bid at the time.
Dish's move appears to imperil U.S. Bankruptcy Judge Shelley Chapman's plans to consider a reorganization plan based on Dish's bid this week. Chapman will consider Harbinger's plan later this month.