Charlie Ergen, Dish Hit With $1.5 Billion Lawsuit

Dish Network and its chairman, Charles Ergen, have been slapped with a lawsuit over the bankrupt wireless company LightSquared. In the lawsuit, filed in US District Court in Colorado, Harbinger Capital Partners accuses Ergen, Dish Network and others of engaging in “an illegal scheme of involving mail and wire fraud, bankruptcy fraud, torious interference, and abuse of process.”

Harbinger and its co-plaintiffs are seeking more than $1.5 billion in damages in the lawsuit, which claims the defendants tried to strip the investment fund of its control of bankrupt wireless company LightSquared. According to the lawsuit, the alleged racketeering action was aimed at stripping Harbinger of its right to control LightSquared and to make decisions during LightSquared's Chapter 11 proceedings, rights that Harbinger claims to have acquired “pursuant to its multi-billion dollar investment” in LightSquared.

The lawsuit accuses Dish Network and others of withholding crucial evidence during LightSquared's 2012 bankruptcy proceedings, adding that the defendants engaged in a ‘troubling pattern of noncredible testimony'” and “wrongfully and deceptively created chaos in the bankruptcy proceedings so that investment fund Harbinger would lose control of the LightSquared board to which it was contractually entitled.”

The suit accuses Dish and others of surreptitiously acquiring LightSquared debt in violation of a credit agreement. The goal, Harbinger claims, was to “dominate the Bankruptcy Proceedings and direct a bargain-basement sale of LightSquared's valuable spectrum assets to Dish.”