Dish wins dismissal of Harbinger's LightSquared lawsuit

Reuters

By Tom Hals

Oct 29 (Reuters) - Charlie Ergen's Dish Network Corp wondismissal on Tuesday of a lawsuit brought by Phil Falcone'sHarbinger Capital Partners in a fight over LightSquared Inc, awireless communications business that is in bankruptcy.

Harbinger had sought $4 billion from Dish in the lawsuit,alleging that Dish had tried to strip Falcone of ownership ofLightSquared.

The legal team for Ergen had called the lawsuit atransparent bid by Falcone to hold onto LightSquared afterdriving it into bankruptcy.

Judge Shelley Chapman of the U.S. bankruptcy court in NewYork ruled from the bench after a hearing on Tuesday anddismissed the claims against Dish, attorneys on both sides saidafterward.

Robert Giuffra, an attorney at Sullivan & Cromwell whorepresented Dish and co-defendants EchoStar Corp, said Chapmanalso dismissed all other claims in the lawsuit.

David Friedman, an attorney with Kasowitz Benson Torres &Friedman who represented Harbinger, had a different take onChapman's ruling. He said the judge did not dismiss one claim inthe lawsuit, in which the hedge fund is attempting to blockErgen from collecting payments on $1 billion of LightSquaredloans.

Dish did not immediately respond for a request for comment,and a transcript from the hearing was not immediately available.

Chapman also said her ruling did not bar LightSquared,rather than its controlling shareholder Harbinger, from pursuingsimilar claims, the lawyers said.

Dish is expected to be the lead bidder at a bankruptcycourt-supervised auction for LightSquared's spectrum assets. Thesatellite TV company has a baseline bid of $2.2 billion.

Harbinger's lawsuit alleged that Ergen and his affiliatesengaged in a complex fraudulent scheme of amassing loans tobecome LightSquared's biggest lender and using that position totry to strip Falcone of the company.

The complaint alleged that Ergen used a specially createdinvestment management firm to acquire LightSquared loans, eventhough a credit agreement prevented competitors from buying suchloans.

LightSquared provides satellite-based mobile voice and dataservices to hundreds of thousands of devices used in the publicsafety, security and asset-tracking sectors. It is building a 4GLTE broadband mobile network that it says will serve 260 millionpeople.

LightSquared filed for Chapter 11 in May of 2012 after theFederal Communications Commission tentatively stopped it frombuilding its network amid concerns in the GPS industry aboutpotential signal interference from a swath of LightSquared'sbroadband.

The case is: In re LightSquared Inc., U.S. Bankruptcy Courtfor the Southern District of New York, No. 12-12080.

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