Dish Deal For LightSquared in Jeopardy (updated)

Dish Network’s proposed deal to buy LightSquared's wireless spectrum assets is on the verge of falling apart, a lawyer for LightSquared's lenders said in bankruptcy court.

Citing a disagreement over regulatory issues with Dish, the lawyer said the lenders still want to go forward with the deal but that Dish is balking at it. The lawyer, Tom Lauria of White & Case LLP, said he believes Dish has breached its contract by refusing to go through with its $2.2 billion purchase of LightSquared's wireless spectrum. The lenders, who own nearly $2 billion in LightSquared bank debt, have proposed the restructuring plan that is based on Dish's bid. Rachel Strickland, a lawyer for Dish and Chairman Charlie Ergen, said she doesn't think Dish breached the contract. Neither side discussed specifics of the regulatory issue, citing confidentiality. Dish hasn't formally terminated the agreement to buy LightSquared's assets, parties said in court.

Update: The WSJ reports, "Dish Network is officially pulling its bid for LightSquared, the telecommunications firm in bankruptcy that has wireless spectrum Dish has been coveting, according to people familiar with the matter."