By Joseph Checkler
Philip Falcone's Harbinger Capital Partners is urging a Colorado
judge not to throw out its lawsuit against Dish Network Corp. and
Dish Chairman Charlie Ergen, saying they "fraudulently deprived
Harbinger of control of LightSquared when it was needed most."
In a Monday filing with U.S. District Court in Denver, lawyers
for Harbinger said Dish and Mr. Ergen followed a plan to
"unlawfully strip Harbinger of its rights to control LightSquared"
so they could acquire the wireless venture out of bankruptcy at a
"fire-sale price."
A spokesman for Dish and Mr. Ergen declined to comment.
Harbinger in July sued both Mr. Ergen and Dish for at least $1.5
billion, saying Mr. Ergen violated the Racketeer Influenced and
Corrupt Organizations Act when he acquired the debt of
LightSquared--the wireless venture controlled by Harbinger--as Dish
was making a bid for the company. Under RICO, originally designed
to prosecute organized crime, parties can seek more damages than
are typically allowed.
Harbinger said in its original suit that Mr. Ergen's purchases
were part of a "scheme" to cause the hedge-fund firm to lose money
and its control of the LightSquared board.
Dish sought to dismiss the suit early last month, saying
Harbinger was "desperate" to find someone to blame for its $2
billion loss in LightSquared.
Last week, lawyers for Dish and Mr. Ergen asked the judge to
halt discovery in the suit as the judge decides on the dismissal
request.
The most recent restructuring proposal that LightSquared filed
in bankruptcy court would give more than half of the company to Mr.
Ergen, its largest lender. Mr. Falcone, who controls LightSquared's
equity, would own none of the company under the proposal, which is
subject to court approval.
As Mr. Falcone's grip on LightSquared has loosened, he has sued
the entities he feels are responsible for his $2 billion or so in
losses on LightSquared. Those parties include Dish, Mr. Ergen, the
U.S. government and the global-positioning systems companies that
have warned LightSquared's network--which Mr. Falcone hoped would
someday provide low-cost mobile services to hundreds of millions of
Americans--could interfere with GPS.
LightSquared filed for Chapter 11 in May 2012 after federal
regulators refused to clear its plans to launch its wireless
network after heeding the GPS industry's warnings. LightSquared
isn't able to fully use spectrum--limited pockets of airwaves that
mobile-phone and Internet companies use--that it owns without
support from the Federal Communications Commission.
Write to Joseph Checkler at joseph.checkler@wsj.com
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