Tuesday, 21 April 2015
Last updated 5 hours ago
Jan 21 2014 | 10:52am ET
Dish Network Chairman Charles Ergen's lieutenants stonewalled efforts to learn if he was behind the purchase of nearly $1 billion in debt issued by Harbinger Capital Management's wireless Internet venture, a witness testified on Friday.
Moelis & Co.'s Mark Hootnick said that a lawyer working for Ergen and the fund manager who bought the debt on his behalf were tight-lipped when questioned. "There was strong suspicion" in 2012 that Ergen was the buyer of the LightSquared debt, but Stephen Ketchum of Sound Point Capital "refused to answer any of the questions."
Sound Point's SP Special Opportunities Fund was the buyer of record of the debt. But the fund had only one investor: Ergen.
LightSquared is seeking to have Ergen's purchases declared illegal; debt covenants barred competitors from buying the bonds. LightSquared and Harbinger contend that Ergen bought up the debt to block restructuring proposals and to allow Dish to buy LightSquared and its coveted share of the electromagnetic spectrum on the cheap.
Earlier last week, Ketchum testified that he did not recall why Ergen was buying the debt or how much he wanted it—in spite of deposition testimony that Ergen had an "appetite for more." Ergen has said that he bought the debt as a personal investment, and that he sought to keep the buys a secret to avoid running up the bonds' prices.
LightSquared's lawyers presented Ketchum with the "appetite for more" e-mail and a second message in which he told an Ergen associate how much debt would be required to block a restructuring proposal. Ketchum said that the e-mails were merely a calculation and not indicative of Ergen's goals.
That earned a mild rebuke from U.S. Bankruptcy Judge Shelley Chapman, who reminded Ketchum that he was "obligated to give truthful answers" under oath.
"If it occurs to you that you gave an answer at your deposition that may not accurately reflect the truth, you're obligated to correct that," she said.
Separately, Dish said Thursday that it had done nothing wrong when it withdrew its $2.2 billion offer for LightSquared. The company said that the hedge funds pushing a restructuring plan based on that bid should not be allowed to do so.
Those hedge funds have threatened to sue Dish, but the company said the litigation is merely "designed to create leverage for a bankruptcy estate in crisis where no leverage otherwise exists."
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…