Dish Network 1997 Annual Report Download - page 77

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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
12. Other Commitments and Contingencies – Continued
F–30
In June 1997, News filed an answer and counterclaims seeking unspecified damages. News’ answer denies
all of the material allegations in the First Amended Complaint and asserts numerous defenses, including bad faith,
misconduct and failure to disclose material information on the part of EchoStar and its Chairman and Chief Executive
Officer, Charles W. Ergen. The counterclaims, in which News is joined by its subsidiary American Sky Broadcasting,
L.L.C., assert that EchoStar and Ergen breached their agreements with News and failed to act and negotiate with News
in good faith. EchoStar has responded to News’ answer and denied the allegations in their counterclaims. EchoStar
also has asserted various affirmative defenses. EchoStar intends to vigorously defend against the counterclaims.
Discovery commenced on July 3, 1997 and depositions are currently being taken. The case has been set for trial
commencing November 1998, but that date could be postponed.
While EchoStar is confident of its position and believes it will ultimately prevail, the litigation process could
continue for many years and there can be no assurance concerning the outcome of the litigation.
EchoStar is subject to various other legal proceedings and claims which arise in the ordinary course of its
business. In the opinion of management, the amount of ultimate liability with respect to those actions will not
materially affect the financial position or results of operations of EchoStar.
13. Parent Company Only and Consolidation of Subsidiary Guarantors
The following pages present the consolidating financial information for EchoStar and its subsidiaries as of
December 31, 1996 and 1997 and for each of the three years in the period ended December 31, 1997. See Note 5 for
a more complete description of the subsidiary guarantors of each of the 1997 Notes, the 1996 Notes and the 1994
Notes. Because the formations of EchoStar (incorporated in 1995), DBS Corp (incorporated in 1996), and ESBC
(incorporated in 1996) were all accounted for as reorganizations of entities under common control, the consolidated
statements of operations and cash flows of Dish, Ltd. for the year ended December 31, 1995 also represent the
consolidated statements of operations and cash flows of EchoStar, DBS Corp and ESBC. Consolidating financial
information is presented for the following entities:
Consolidated Dish, Ltd. (referred to as “ Dish” )
ESBC Parent Company Only (referred to as “ ESBC - PC” )
Consolidating and eliminating adjustments (referred to as “ C&E” )
Consolidated ESBC (referred to as “ ESBC”)
DBS Corp Parent Company Only (referred to as “ DBS Corp - PC” )
Consolidated DBS Corp (referred to as “ DBS Corp”)
ECC Parent Company Only (referred to as “ ECC - PC”)
Other direct wholly-owned subs of ECC (referred to as “ Other” )
Consolidated ECC (referred to as “ ECC” )