Dish Network 2015 Annual Report Download - page 167

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-63
granted Harbinger’s unopposed motion to dismiss the appeal with prejudice. The Colorado matter is now
concluded.
On July 21, 2015, Harbinger filed a substantially similar complaint against us, LBAC, Mr. Ergen, SPSO, and certain
other parties, in the United States District Court for the Southern District of New York. The complaint again asserts
claims for tortious interference with contract and abuse of process, and also repeats the same claims alleging
violations of the federal Racketeering Influenced and Corrupt Organization Act and the Colorado Organized Crime
Control Act. Harbinger again seeks to rely 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. This complaint seeks damages in excess of $1.5 billion,
which under federal and state law may be trebled. On November 2, 2015, we filed a motion to dismiss the
complaint, and discovery was stayed pending resolution of our motion to dismiss. On December 22, 2015,
Harbinger filed a motion to voluntarily dismiss the complaint without prejudice. The District Court ordered such
dismissal on December 23, 2015. The New York matter is now concluded.
LightSquared Transaction Shareholder Derivative Actions
On August 9, 2013, a purported shareholder of the Company, Jacksonville Police and Fire Pension Fund
(“Jacksonville PFPF”), filed a putative shareholder derivative action in the District Court for Clark County, Nevada
alleging, among other things, breach of fiduciary duty claims against the members of the Company’s Board of
Directors as of that date: Charles W. Ergen; Joseph P. Clayton; James DeFranco; Cantey M. Ergen; Steven R.
Goodbarn; David K. Moskowitz; Tom A. Ortolf; and Carl E. Vogel (collectively, the “Director Defendants”). In its
first amended complaint, Jacksonville PFPF asserted claims that Mr. Ergen breached his fiduciary duty to the
Company in connection with certain purchases of LightSquared debt by SPSO, an entity controlled by Mr. Ergen,
and that the other Director Defendants aided and abetted that alleged breach of duty. The Jacksonville PFPF claims
alleged that (1) the debt purchases created an impermissible conflict of interest and (2) put at risk the LBAC Bid,
which as noted above has been withdrawn. Jacksonville PFPF further claimed that most members of the Company’s
Board of Directors are beholden to Mr. Ergen to an extent that prevents them from discharging their duties in
connection with the Company’s participation in the LightSquared bankruptcy auction process. Jacksonville PFPF is
seeking an unspecified amount of damages. Jacksonville PFPF dismissed its claims against Mr. Goodbarn on
October 8, 2013.
Jacksonville PFPF sought a preliminary injunction that would enjoin Mr. Ergen and all of the Director Defendants
other than Mr. Goodbarn from influencing the Company’s efforts to acquire certain assets of LightSquared in the
bankruptcy proceeding. On November 27, 2013, the Court denied that request but granted narrower relief enjoining
Mr. Ergen and anyone acting on his behalf from participating in negotiations related to one aspect of the LBAC Bid,
which, as noted above, has been withdrawn.
Five alleged shareholders have filed substantially similar putative derivative complaints in state and federal courts
alleging the same or substantially similar claims. On September 18, 2013, DCM Multi-Manager Fund, LLC filed a
duplicative putative derivative complaint in the District Court for Clark County, Nevada, which was consolidated
with the Jacksonville PFPF action on October 9, 2013. Between September 25, 2013 and October 2, 2013, City of
Daytona Beach Police Officers and Firefighters Retirement System, Louisiana Municipal Police Employees’
Retirement System and Iron Worker Mid-South Pension Fund filed duplicative putative derivative complaints in the
United States District Court for the District of Colorado. Also on October 2, 2013, Iron Workers District Council
(Philadelphia and Vicinity) Retirement and Pension Plan filed its complaint in the United States District Court for
the District of Nevada.