Dish Network 2003 Annual Report Download - page 33

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that the merger with DirecTV was not completed by January 21, 2003. During July 2003, the individual Board of
Director defendants were dismissed from the suit, and EchoStar was dismissed during August 2003. The plaintiff did
not file an appeal.
Enron Commercial Paper Investment Complaint
On November 6, 2003, an action was commenced in the United States Bankruptcy Court for the Southern District of
New York, against approximately 100 defendants, including us, who invested in Enron’s commercial paper. The
complaint alleges that Enron’s October 2001 prepayment of its commercial paper is a voidable preference under the
bankruptcy laws and constitutes a fraudulent conveyance. The complaint alleges that we received voidable or
fraudulent prepayments of approximately $40.0 million. We typically invest in commercial paper and notes which are
rated in one of the four highest rating categories by at least two nationally recognized statistical rating organizations.
At the time of our investment in Enron commercial paper, it was considered to be high quality and considered to be a
very low risk. It is too early to make an assessment of the probable outcome of the litigation or to determine the extent
of any potential liability or damages.
Satellite Insurance
In September 1998, we filed a $219.3 million insurance claim for a total loss under the launch insurance policies
covering EchoStar IV. The satellite insurance consists of separate substantially identical policies with different carriers
for varying amounts that, in combination, create a total insured amount of $219.3 million. The insurance carriers
include La Reunion Spatiale; AXA Reinsurance Company (n/k/a AXA Corporate Solutions Reinsurance Company),
United States Aviation Underwriters, Inc., United States Aircraft Insurance Group; Assurances Generales De France
I.A.R.T. (AGF); Certain Underwriters at Lloyd’s, London; Great Lakes Reinsurance (U.K.) PLC; British Aviation
Insurance Group; If Skaadeforsikring (previously Storebrand); Hannover Re (a/k/a International Hannover); The Tokio
Marine & Fire Insurance Company, Ltd.; Marham Space Consortium (a/k/a Marham Consortium Management); Ace
Global Markets (a/k/a Ace London); M.C. Watkins Syndicate; Goshawk Syndicate Management Ltd.; D.E. Hope
Syndicate 10009 (Formerly Busbridge); Amlin Aviation; K.J. Coles & Others; H.R. Dumas & Others; Hiscox
Syndicates, Ltd.; Cox Syndicate; Hayward Syndicate; D.J. Marshall & Others; TF Hart; Kiln; Assitalia Le
Assicurazioni D'Italia S.P.A. Roma; La Fondiaria Assicurazione S.P.A., Firenze; Vittoria Assicurazioni S.P.A.,
Milano; Ras - Riunione Adriatica Di Sicurta S.P.A., Milano; Societa Cattolica Di Assicurazioni, Verano; Siat
Assicurazione E Riassicurazione S.P.A, Genova; E. Patrick; ZC Specialty Insurance; Lloyds of London Syndicates 588
NJM, 1209 Meb AND 861 Meb; Generali France Assurances; Assurance France Aviation; and Ace Bermuda
Insurance Ltd.
The insurance carriers offered us a total of approximately $88.0 million, or 40% of the total policy amount, in
settlement of the EchoStar IV insurance claim. The insurers assert, among other things, that EchoStar IV was not a
total loss, as that term is defined in the policy, and that we did not abide by the exact terms of the insurance policies.
We strongly disagree and filed arbitration claims against the insurers for breach of contract, failure to pay a valid
insurance claim and bad faith denial of a valid claim, among other things. Due to individual forum selection clauses
in certain of the policies, we are pursuing our arbitration claims against Ace Bermuda Insurance Ltd. in London,
England, and our arbitration claims against all of the other insurance carriers in New York, New York. The New
York arbitration commenced on April 28, 2003, and the Arbitration Panel has now conducted approximately thirty-
five days of hearings. The parties to the London arbitration have agreed to stay that proceeding pending a ruling in
the New York arbitration. There can be no assurance that we will receive the amount claimed in either the New
York or the London arbitrations or, if we do, that we will retain title to EchoStar IV with its reduced capacity.
In addition to the above actions, we are subject to various other legal proceedings and claims which arise in the
ordinary course of business. In our opinion, the amount of ultimate liability with respect to any of these actions is
unlikely to materially affect our financial position, results of operations or liquidity.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No items were submitted to a vote of security holders during the fourth quarter of 2003.