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LightSquared sues Dish, Ergen over control of its broadband spectrum
Wireless communications firm LightSquared Inc reportedly filed a lawsuit against Dish Network Corp and its chairman, Charles Ergen. Filed on Friday in the US bankruptcy court in New York, LightSquared said Dish and Ergen had been attempting to take control of its broadband spectrum. Reuters noted in its report that the new lawsuit was a revival of an earlier case by Phil Falcone's Harbinger Capital Partners, which is the controlling shareholder of LightSquared with an 80% ownership stake. Harbinger and associates provided LightSquared with USD2.9 billion in assets and over USD2.3 billion in equity and debt financing. Harbinger's case was thrown out in October this year.
The lawsuit said Dish, Ergen and entities under Ergen's control had done some improper trades in order to become LightSquared's largest creditor. LightSquared also claimed that Dish and Ergen had violated a key credit agreement in order to obtain the wireless communications company's spectrum, which are airwaves to use for wireless communications.
Established in Reston, Virginia on July 20, 2010, LightSquared intended to develop a wholesale network of 4G LTE wireless broadband communications that would be integrated with satellite coverage all over the US. LightSquared hoped to use block of frequencies that are located near the bandwidth that is being utilized by Global Positioning System (GPS). The attempt was unsuccessful after encountering problems with interference. LightSquared had filed for bankruptcy on May 14 last year. Lenders of both Harbinger and LightSquared had proposed plans how to restructure the wireless communications compan, with Harbinger favoring repayment to creditors to retain ownership. However, Reuters said in its report that although a vote would be done to decide on LightSquared's fate, an auction of the company's assets would most likely happen.
LightSquared's lawsuit reportedly disallow Ergen's claims in the company's bankruptcy proceedings. The company i also seeking compensatory and punitive damages.
Dish spokesman Bob Toevs responded in an email, "This elaborate distraction seems designed to shift attention from years of LightSquared mismanagement leading to bankruptcy."
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