Tuesday, 25 October 2016
Last updated 15 hours ago
Mar 24 2014 | 1:04pm ET
Dish Network founder Charles Ergen is throwing some last-minute intrigue into his battle with Harbinger Capital Partners founder Philip Falcone.
Ergen’s lawyers have submitted new evidence to show that a delay in his purchase of debt in Harbinger’s wireless internet venture was not an effort to sow confusion in LightSquared’s restructuring effort. LightSquared’s lawyers have cried foul, noting that the discovery and trial phases have both passed, and accusing Ergen of trying “to pull a rabbit out of a hat.”
LightSquared is seeking to have Ergen’s purchase of $850 million in its debt declared illegal because Ergen was buying it on behalf of Dish, which is barred by LightSquared’s covenants. If it succeeds, it could render Ergen’s debt junior to all of the bankrupt companies other creditors.
Ergen insists he made the debt purchases as a personal investment.
Among the issues at trial were so-called “hung trades,” which featured a delay between when Ergen agreed to buy the debt and when the deals were actually closed. LightSquared has argued that Ergen was responsible for the delay; last week, Ergen’s lawyers said it was actually investment bank Jeffries that imposed them. U.S. Bankruptcy Judge Shelley Chapman demanded that Ergen show proof of the claim, and his lawyers responded with e-mails from Jefferies apparently showing that the bank had hung the trades to avoid violations of a Securities and Exchange Commission regulation.
LightSquared has asked Chapman not to allow the new evidence.