Dish Network Corp. (DISH:US) Chairman Charlie Ergen sought permission from a bankruptcy judge to sue Harbinger Group Inc. (HRG:US) founder Philip Falcone as the two billionaires fight for control of LightSquared Inc.
“Mr. Falcone has always treated LightSquared as his personal bet on the future of broadband wireless communications, rather than an incorporated entity with stakeholders and lenders dependent on the board of directors’ faithful execution of their duties,” Ergen’s SP Special Opportunities LLC said in a filing yesterday in U.S. Bankruptcy Court in Manhattan.
Falcone’s LightSquared is seeking approval of a bankruptcy exit plan that would put Ergen, who acquired $1 billion in LightSquared debt through SP Special Opportunities, at the back of the line to be repaid and close a two-year battle for control of the company’s airwaves.
LightSquared has alleged that Ergen’s debt purchases were improper because he concealed that he was acting on behalf of Englewood, Colorado-based Dish, buying through a newly formed fund instead. Competitors were prohibited from owning LightSquared’s debt, and Ergen knew it, LightSquared has said.
LightSquared, based in Reston, Virginia, sought court protection after the Federal Communications Commission blocked the company’s wireless service, saying it might interfere with civilian and military global-positioning-system navigation equipment. The company listed assets of $4.48 billion and debt of $2.29 billion.
The case is In re LightSquared Inc., 12-bk-12080, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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