By Joseph Checkler
A judge on Thursday handed a win to Dish Network Corp. Chairman
Charlie Ergen and the company's board of directors in a shareholder
lawsuit over Dish's 2013 bid for bankrupt wireless venture
LightSquared.
Judge Elizabeth Gonzalez of Clark County District Court in Las
Vegas deferred the case to Dish's own special litigation committee,
a law clerk for the judge told The Wall Street Journal. That
committee has already said the shareholder's claims should be
dismissed, although it faced allegations that it wasn't independent
enough to make an unbiased decision.
The judge's decision means that she will sign off on a future
request from Dish to dismiss the lawsuit.
In 2013, shareholders--led by the Jacksonville, Fla., Police and
Fire Pension Fund--sued Dish's board over its handling of a $2.2
billion offer to acquire LightSquared out of bankruptcy, a bid that
Dish later abandoned. The offer was made as Mr. Ergen was amassing
about $1 billion of LightSquared's debt for himself. The pension
fund argued the bid was too high, meant to benefit Mr. Ergen's
personal holdings. Dish's board and Mr. Ergen said they acted
properly.
"We are pleased that the court deferred to the business judgment
of an independent committee of our board that prosecution of the
litigation was not in the company's best interests," the company
said Thursday.
A lawyer for the pension fund didn't immediately respond to a
request for comment.
After the Dish bid for LightSquared fell apart toward the end of
2013, the pension fund amended its suit to say that backing out of
the deal hurt Dish shareholders, saying that getting LightSquared
for $2.2 billion would benefit them.
Despite the bid being abandoned, the presence of Mr. Ergen and
Dish in LightSquared's bankruptcy case never faded. A plan to
restructure LightSquared, which a judge approved earlier this year,
pays Mr. Ergen, LightSquared's biggest creditor, in full and in
cash for his claim of more than $1 billion.
The shareholder suit was one of several faced by Mr. Ergen,
and/or Dish, over LightSquared. In April, a Colorado judge
dismissed a racketeering suit brought by LightSquared's champion,
hedge-fund manager Philip Falcone, against Mr. Ergen and Dish,
although that judge did say the suit could be refiled in a
different venue.
Mr. Ergen is represented by Willkie Farr & Gallagher
LLP.
Write to Joseph Checkler at joseph.checkler@wsj.com
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