Dish Network 1998 Annual Report Download - page 22

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20
Item 2. Properties
The following table sets forth certain information concerning our material properties:
Description/Use Location
Approximate
Square Footage
Owned or
Leased
Corporate headquarters and customer service
center ..................................................... Littleton, Colorado 156,000 Owned
EchoStar Technologies Corporation office
and distribution center............................. Englewood, Colorado 155,000 Owned
Warehouse and distribution center ................ Denver, Colorado 132,800 Leased
Customer service center ............................... McKeesport, Pennsylvania 100,000 Leased
Office and distribution center ....................... Sacramento, California 78,500 Owned
Digital broadcast operations center ............... Cheyenne, Wyoming 55,000 Owned
Customer service center ............................... Thornton, Colorado 55,000 Owned
European headquarters and warehouse.......... Almelo, The Netherlands 53,800 Owned
Item 3. Legal Proceedings
The News Corporation Limited
During February 1997, EchoStar and News Corporation announced an agreement pursuant to which, among
other things, News Corporation agreed to acquire approximately 50% of the outstanding capital stock of EchoStar.
News Corporation also agreed to make available for use by EchoStar the DBS permit for 28 frequencies at the
110° WL orbital slot purchased by MCI for more than $682 million following a 1996 FCC auction. During late April
1997, substantial disagreements arose between the parties regarding their obligations under this agreement. Those
substantial disagreements led the parties to litigation. In mid-1997, EchoStar filed a complaint seeking specific
performance of this agreement and damages, including lost profits. News Corporation filed an answer and
counterclaims seeking unspecified damages, denying all of the material allegations and asserting numerous defenses.
Discovery commenced in July 1997, and the case was set for trial commencing March 1999. In connection with the
pending 110 acquisition, the litigation between EchoStar and News Corporation will be stayed and will be dismissed
with prejudice upon closing or if the transaction is terminated for reasons other than the breach by, or failure to fill a
condition within the control of, News Corporation or MCI.
In connection with the News Corporation litigation that arose in 1997, EchoStar has a contingent fee
arrangement with its lawyers, which provides for the lawyers to be paid a percentage of any net recovery obtained in
its dispute with News Corporation. Although they have not been specific, the lawyers have asserted that they may be
entitled to receive payments in excess of $80 million to $100 million under this fee arrangement in connection with
the settlement of the dispute with News Corporation. EchoStar intends to vigorously contest the lawyers’
interpretation of the fee arrangement, which it believes significantly overstates the magnitude of its liability
thereunder. If the lawyers and EchoStar are unable to resolve this fee dispute under the fee arrangement, the fee
dispute would be resolved under arbitration. It is too early to determine the outcome of negotiations or arbitration
regarding this fee dispute.
WIC Premium Television Ltd.
On July 28, 1998, a lawsuit was filed by WIC Premium Television Ltd. (“WIC”), an Alberta corporation, in
the Federal Court of Canada Trial Division, against certain defendants which include: General Instrument
Corporation, HBO, Warner Communications, Inc., John Doe, Showtime, USSB, ECC and two of ECC’s wholly-
owned subsidiaries, Dish, Ltd. and Echosphere. The lawsuit seeks, among other things, an interim and permanent
injunction prohibiting the defendants from activating receivers in Canada and from infringing any copyrights held by
WIC. It is too early to determine whether or when any other lawsuits and/or claims will be filed. It is also too early
to make an assessment of the probable outcome of the litigation or to determine the extent of any potential liability or
damages.