Dish Network: LightSquared shareholder Harbinger's lawsuit dismissed

By Caroline Salls

Pittsburgh, Oct. 30 - LightSquared Inc. controlling shareholder Harbinger Capital Partners LLC's lawsuit against Dish Network LLC was dismissed Tuesday by the judge in LightSquared's Chapter 11 bankruptcy case, according to a Dish Network news release.

As previously reported, Harbinger filed a complaint in August against Charles W. Ergen and entities he controls to seek redress for fraud and other conduct aimed at misappropriating Harbinger's control over and investment in LightSquared.

According to the complaint filed with the U.S. Bankruptcy Court for the Southern District of New York, the defendants' conduct also destroyed Harbinger's contractual rights and business opportunities relating to the LightSquared investment.

In addition to Ergen, the defendants are EchoStar Corp., Dish Network, L-Band Acquisition LLC, SP Special Opportunities LLC, SP Special Opportunities Holdings LLC, Sound Point Capital Management LP and Stephen Ketchum.

Harbinger said several of the defendants, aided and abetted by defendants SP Capital and Ketchum, "are engaged in a fraudulent scheme to deprive Harbinger of its investment in and control of LightSquared and its valuable wireless spectrum, prevent LightSquared - a potential competitor to Dish and EchoStar - from emerging from bankruptcy under Harbinger's control and misappropriate the valuable spectrum assets at a discount to their true value."

Harbinger alleged that the defendants' fraudulent scheme will give Ergen and his entities an unfair advantage as a bidder for the spectrum assets.

If the alleged scheme succeeds, it will cost Harbinger billions of dollars in additional damages, the complaint said.

Harbinger was seeking the equitable disallowance of Sound Point loan debt, as well as compensatory and punitive damages related to its plenary claims for fraud, tortious interference with contract and prospective economic advantage, unfair competition and civil conspiracy.

"Dish is pleased judge [Shelley] Chapman has dismissed all charges against it this afternoon," Dish Network said in Wednesday's release.

"The company looks forward to pursuing its bid in the upcoming auction for the LightSquared assets."

LightSquared is a Reston, Va.-based wholesale-only 4G-LTE network integrated with satellite coverage. The company filed for bankruptcy on May 14, 2012 in the U.S. Bankruptcy Court for the Southern District of New York under Chapter 11 case number 12-12080.

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