Dish Network 2014 Annual Report Download - page 164

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-58
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
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 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.
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 (LightSquared Colorado Action)
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 on many of 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 breaches of Harbinger’s stockholder agreement. The
complaint seeks damages in excess of $500 million, which under federal and state law may be trebled.
We intend to vigorously defend any claims against us in this case and cannot predict with any degree of certainty
the outcome of this proceeding or determine the extent of any potential liability or damages.
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.