Dish Network 2013 Annual Report Download - page 57

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New York Actions
Both the ABC and CBS parties filed counterclaims in the New York action adding copyright claims against
EchoStar Technologies, and the CBS parties have filed a counterclaim alleging that we fraudulently concealed the
AutoHop feature when negotiating renewal of our CBS retransmission consent agreement. On November 23, 2012,
the ABC plaintiffs filed a motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime
Anytime and AutoHop features. On September 18, 2013, the New York court denied that motion. The ABC
plaintiffs appealed, and oral argument on the appeal began on February 20, 2014 before the United States Court of
Appeals for the Second Circuit. The ABC and CBS claims are set to be trial-ready on April 17, 2015.
We intend to vigorously prosecute and defend our position in these cases. In the event that a court ultimately
determines that we infringe the asserted copyrights, or are in breach of any of the retransmission consent
agreements, we may be subject to substantial damages, and/or an injunction that could require us to materially
modify certain features that we currently offer to consumers. In addition, as a result of this litigation, we may not be
able to renew certain of our retransmission consent agreements and other programming agreements on favorable
terms or at all. If we are unable to renew these agreements, there can be no assurance that we would be able to
obtain substitute programming, or that such substitute programming would be comparable in quality or cost to our
existing programming. Loss of access to existing programming could have a material adverse effect on our
business, financial condition and results of operations, including, among other things, our gross new subscriber
activations and subscriber churn rate. We cannot predict with any degree of certainty the outcome of these suits or
determine the extent of any potential liability or damages.
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), 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 against LBAC and us 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 include, 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 equitable disallowance. These claims proceeded to a non-jury