Thursday, 30 June 2016
Last updated 23 min ago
Jan 23 2014 | 12:42pm ET
The judge overseeing the bankruptcy of Harbinger Capital Management's wireless Internet venture does not seem inclined to force Dish Network to go through with its $2.2 billion bid for that company's share of the electromagnetic spectrum.
U.S. Bankruptcy Judge Shelley Chapman did not make a final ruling on the matter yesterday, but indicated the direction she was leaning. Chapman said that while Dish should have made a formal filing ending its offer, its termination of an agreement with LightSquared's lenders was probably sufficient.
Those lenders, which have created a restructuring proposal based on Dish's bid, have asked Chapman to force the company to go through with the deal. Dish said it would drop its bid earlier this month, citing "technical" regulatory issues.
Dish lawyer Rachel Strickland said the company could formally notify the creditors of its decision "by handing them a Post-It note," and noted that Dish had repeatedly stated its intention in court.
Thomas Lauria, a lawyer for the creditors, said it was "incomprehensible" that Dish would abandon the bankruptcy plan. "I've never heard of anything like this," he said.
But Chapman took a dimmer view of Dish's deal with the creditors, saying, "a bunch of tired lawyers wrote down words that didn't precisely reflect what the deal was."
Before issuing a final ruling, Chapman closed the proceedings to the public. It is unclear when she will make that ruling.
LightSquared is seeking approval for its own $4 billion restructuring plan, backed by Fortress Investment Group. That deal also faces major questions; on Friday, Manhattan U.S. Attorney Preet Bharara told the court that the Federal Communications Commission would not guarantee approval of LightSquared's plans by the end of the year, as required by the Fortress-backed plan. The FCC has blocked deployment of LightSquared's network, citing interference issues with global positioning systems.
LightSquared is also seeking to block the sale of smaller chunks of its spectrum to U.S. Bank and hedge fund Mast Capital Management, and to have Dish Chairman Charles Ergen's purchases of $1 billion of its debt declared illegal.