http://variety.com/2013/biz/news/sh...-buy-lightsquared-spectrum-assets-1200671886/
A shareholders group has filed suit against Charlie Ergen and the board of directors of Dish Network, accusing Ergen of unjustly enriching himself in the purchase of debt from LightSquared, a company that holds spectrum assets Dish is seeking to purchase. The verified shareholder derivative complaint from the City of Daytona Police Officers’ and Firefighters Retirement System was filed in a federal court in Denver on Thursday. The suit claims that after Ergen completed the purchase of $1 billion of debt of LightSquared, a company in bankruptcy that owns spectrum licenses, he then launched a personal $2 billion bid for LightSquared’s spectrum assets, a bid that “directly competed” with Dish’s interests in purchasing those same assets. The suit states that Dish’s board of directors, acknowledging the conflict, created a two-person committee in connection with its bid for the spectrum assets. According to the Wall Street Journal, however, the special committee was disbanded at a July 21, 2013 board meeting. Two days later, Dish submitted a competing $2.2 billion bid for LightSquared’s assets, part of a reorganization plan that LightSquared’s secure lenders, including Ergen, submitted for approval in the bankruptcy proceedings. “If approved, Dish’s bid ensures that Ergen will receive hundreds of millions of dollars in personal profit on his $1 billion debt purchases,” the suit states. The suit notes that one member of Dish’s special committee, Gary Howard, resigned from the board on July 25. The suit also notes that LightSquared’s principal shareholder, Harbinger Capital Partners, sued Ergen and Dish in federal bankruptcy court in New York in August. That claim alleges that Ergen purchased the $1 billion LightSquared debt in a way “that would give Dish an unfair advantage in the LightSquared bankruptcy.” “The crux of Harbinger’s complaint is that Dish is not independent from Ergen and acts as Ergen’s co-conspirator in trying to improperly acquire LightSquared’s assets,” the shareholders’ suit states. The shareholder suit seeks damages and any profits that Ergen received or will receive as a result of his purchase of LightSquared’s debt. “As a controlling shareholder and Dish director, Ergen owes a duty to the company’s shareholders to act with utmost loyalty, candor, good faith and fair dealing, including when Ergen’s personal interests conflict with those of Dish and its public shareholders,” the shareholder suit states. Dish Network was named as a nominal defendant in the shareholder litigation. A spokesman for Dish did not immediately return a request for comment.
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A shareholders group has filed suit against Charlie Ergen and the board of directors of Dish Network, accusing Ergen of unjustly enriching himself in the purchase of debt from LightSquared, a company that holds spectrum assets Dish is seeking to purchase. The verified shareholder derivative complaint from the City of Daytona Police Officers’ and Firefighters Retirement System was filed in a federal court in Denver on Thursday. The suit claims that after Ergen completed the purchase of $1 billion of debt of LightSquared, a company in bankruptcy that owns spectrum licenses, he then launched a personal $2 billion bid for LightSquared’s spectrum assets, a bid that “directly competed” with Dish’s interests in purchasing those same assets. The suit states that Dish’s board of directors, acknowledging the conflict, created a two-person committee in connection with its bid for the spectrum assets. According to the Wall Street Journal, however, the special committee was disbanded at a July 21, 2013 board meeting. Two days later, Dish submitted a competing $2.2 billion bid for LightSquared’s assets, part of a reorganization plan that LightSquared’s secure lenders, including Ergen, submitted for approval in the bankruptcy proceedings. “If approved, Dish’s bid ensures that Ergen will receive hundreds of millions of dollars in personal profit on his $1 billion debt purchases,” the suit states. The suit notes that one member of Dish’s special committee, Gary Howard, resigned from the board on July 25. The suit also notes that LightSquared’s principal shareholder, Harbinger Capital Partners, sued Ergen and Dish in federal bankruptcy court in New York in August. That claim alleges that Ergen purchased the $1 billion LightSquared debt in a way “that would give Dish an unfair advantage in the LightSquared bankruptcy.” “The crux of Harbinger’s complaint is that Dish is not independent from Ergen and acts as Ergen’s co-conspirator in trying to improperly acquire LightSquared’s assets,” the shareholders’ suit states. The shareholder suit seeks damages and any profits that Ergen received or will receive as a result of his purchase of LightSquared’s debt. “As a controlling shareholder and Dish director, Ergen owes a duty to the company’s shareholders to act with utmost loyalty, candor, good faith and fair dealing, including when Ergen’s personal interests conflict with those of Dish and its public shareholders,” the shareholder suit states. Dish Network was named as a nominal defendant in the shareholder litigation. A spokesman for Dish did not immediately return a request for comment.
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In fact, that reeks of embezzlement.
