Dish Network 2015 Annual Report Download - page 166

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-62
LightSquared/Harbinger Capital Partners LLC (LightSquared Bankruptcy)
As previously disclosed in our public filings, L-Band Acquisition, LLC (“LBAC”), our wholly-owned subsidiary,
entered into a Plan Support Agreement (the “PSA”) with certain senior secured lenders to LightSquared LP (the
“LightSquared LP Lenders”) on July 23, 2013, which contemplated the purchase by LBAC of substantially all of the
assets of LightSquared LP and certain of its subsidiaries (the “LBAC Bid”) that are debtors and debtors in
possession in the LightSquared bankruptcy cases pending in the United States Bankruptcy Court for the Southern
District of New York (the “Bankruptcy Court”), which cases are jointly administered under the caption In re
LightSquared Inc., et. al., Case No. 12 12080 (SCC).
Pursuant to the PSA, LBAC was entitled to terminate the PSA in certain circumstances, certain of which required
three business days’ written notice, including, without limitation, in the event that certain milestones specified in the
PSA were not met. On January 7, 2014, LBAC delivered written notice of termination of the PSA to the
LightSquared LP Lenders. As a result, the PSA terminated effective on January 10, 2014, and the LBAC Bid was
withdrawn.
On August 6, 2013, Harbinger Capital Partners LLC and other affiliates of Harbinger (collectively, “Harbinger”), a
shareholder of LightSquared Inc., filed an adversary proceeding against us, LBAC, EchoStar, Charles W. Ergen (our
Chairman and Chief Executive Officer), SP Special Opportunities, LLC (“SPSO”) (an entity controlled by
Mr. Ergen), and certain other parties, in the Bankruptcy Court. Harbinger alleged, among other things, claims based
on fraud, unfair competition, civil conspiracy and tortious interference with prospective economic advantage related
to certain purchases of LightSquared secured debt by SPSO. Subsequently, LightSquared intervened to join in
certain claims alleged against certain defendants other than us, LBAC and EchoStar.
On October 29, 2013, the Bankruptcy Court dismissed all of the claims in Harbinger’s complaint in their entirety,
but granted leave for LightSquared to file its own complaint in intervention. On November 15, 2013, LightSquared
filed its complaint, which included various claims against us, EchoStar, Mr. Ergen and SPSO. On December 2,
2013, Harbinger filed an amended complaint, asserting various claims against SPSO. On December 12, 2013, the
Bankruptcy Court dismissed several of the claims asserted by LightSquared and Harbinger. The surviving claims
included, among others, LightSquared’s claims against SPSO for declaratory relief, breach of contract and statutory
disallowance; LightSquared’s tortious interference claim against us, EchoStar and Mr. Ergen; and Harbinger’s claim
against SPSO for statutory disallowance. These claims proceeded to a non-jury trial on January 9, 2014. In its Post-
Trial Findings of Fact and Conclusions of Law entered on June 10, 2014, the Bankruptcy Court rejected all claims
against us and EchoStar, and it rejected some but not all claims against the other defendants. On July 7, 2015, the
United States District Court for the Southern District of New York denied Harbinger’s motion for an interlocutory
appeal of certain Bankruptcy Court orders in the adversary proceeding. On March 27, 2015, the Bankruptcy Court
entered an order confirming the Modified Second Amended Joint Plan pursuant to Chapter 11 of the Bankruptcy
Code and, on December 7, 2015, the Plan became effective.
We intend to vigorously defend any claims against us in this proceeding and cannot predict with any degree of
certainty the outcome of this proceeding or determine the extent of any potential liability or damages.
LightSquared/Harbinger Capital Partners LLC (Harbinger Colorado and New York Actions)
On July 8, 2014, Harbinger filed suit against us, LBAC, Mr. Ergen, SPSO, and certain other parties, in the United
States District Court for the District of Colorado. The complaint asserts claims for tortious interference with
contract and abuse of process, as well as claims alleging violations of the federal Racketeering Influenced and
Corrupt Organization Act and the Colorado Organized Crime Control Act. Harbinger seeks to rely effectively on
the same facts and circumstances that were at issue in the LightSquared adversary proceeding pending in the
Bankruptcy Court. Harbinger argues that the defendants’ alleged conduct, among other things, is responsible for
Harbinger’s losing control of LightSquared and causing Harbinger to lose certain of its equity interests or rights in
LightSquared. The complaint seeks damages in excess of $500 million, which under federal and state law may be
trebled. On April 28, 2015, the District Court granted our motion to dismiss the complaint. On May 28, 2015,
Harbinger filed a notice of appeal and on July 27, 2015, the United States Court of Appeals for the Tenth Circuit