Tuesday, 31 May 2016
Last updated 1 hour ago
Jan 10 2014 | 1:04pm ET
Dish Network may no longer be a threat to the existence of Harbinger Capital Management's wireless Internet venture, but that hasn't lessened any of the bitterness LightSquared apparently feels towards its chairman, Charles Ergen.
LightSquared announced yesterday that Dish had dropped its $2.2 billion bid for the bankrupt company's assets, with its offer officially expiring tonight at midnight. But its lawyers hammered Ergen anyway, accusing him of illegally buying up more than half of its debt.
Despite Dish's exit, LightSquared wants the bankruptcy-court trial to continue as part of its effort to deny Ergen payment on the $1 billion in LightSquared debt he owns. LightSquared argued that Ergen made the purchases through an investment vehicle on behalf of Dish in order to win control of LightSquared's share of the electromagnetic spectrum. Dish, as a competitor, is barred from buying LightSquared debt.
Dish's lawyers questioned the LightSquared CEO Doug Smith, yesterday about whether LightSquared knew who was buying its debt. The trial is expected to continue today and next week, with Dish Treasurer Jason Kiser, who allegedly made the trades on Ergen's behalf, Harbinger chief Philip Falcone and Ergen himself expected to testify.
Ergen's lawyers denied that he did anything wrong—other than investing hundreds of millions of dollars from his daughter's trust fund in the LightSquared debt without telling either his daughter or his wife, who also controls the trust.
"His wife and his daughter may be mad," Dish lawyer Robert Giuffra said. But he didn't do anything illegal, buying the debt for himself and not for Dish.