LightSquared Suit Accuses Ergen of Improperly Buying Up Debt

Wireless communications firm LightSquared Inc reportedly filed a lawsuit against Dish Network Corp and its chairman, Charles Ergen for secretly buying debt in the bankrupt wireless company to lay the groundwork for a takeover.

The lawsuit, filed in the U.S. bankruptcy court in New York late on Friday, says that among other things, Mr. Ergen ordered Dish Treasurer Jason Kiser to purchase-through a newly created investment entity called SP Special Opportunities LLC-more than $1 billion in LightSquared debt in the months before Dish bid on the company's assets. LightSquared said Mr. Kiser made the trades through Sound Point Capital Management, a hedge-fund firm run by Stephen Ketchum. Mr. Ergen has previously said he created the investment vehicle, but that it isn't affiliated with Dish. LightSquared says it is.

"Because of LightSquared's bankruptcy, Dish, acting through its agent Mr. Ergen, apparently saw a chance to purchase LightSquared's valuable assets at a price dictated by Dish, and devised and implemented a plan to achieve that goal," LightSquared lawyers said in the filing.

LightSquared is asking for a jury trial, and wants the debt purchases my Mr. Ergen's investment entity either disallowed or put below other creditors' claims.

"Both the timing and content of LightSquared's complaint reveal it as a desperate measure to avoid selling its assets to the highest bidder in a few weeks time," Dish spokesman Bob Toevs responded in an email. "This elaborate distraction seems designed to shift attention from years of LightSquared mismanagement leading to bankruptcy."

Read the full Reuters story -here-

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