From Reuters:
Phil Falcone's hedge fund sued satellite TV mogul Charlie Ergen and his Dish Network Corp for $4 billion on Tuesday for an alleged loan-trading scheme aimed at stripping Falcone of his control over LightSquared Inc, a bankrupt wireless communications business.
The lawsuit in the U.S. Bankruptcy Court in Manhattan was filed on Tuesday at the same time as Ergen was confirming on an earnings call with Dish investors that the company was interested in acquiring LightSquared.
The lawsuit by Falcone's Harbinger Capital Partners alleges that Ergen and his affiliates engaged in a complex fraudulent scheme to become LightSquared's biggest lender. Harbinger alleges Ergen is trying to use that position to strip Falcone of the company.
The lawsuit seeks $2 billion in compensation and $2 billion in punitive damages. It also seeks to undo purchases of LightSquared loans by affiliates of Ergen.
The complaint alleges that Ergen used a specially created investment management firm to amass the largest holding of LightSquared loans, even though a credit agreement prevented competitors from buying such loans.
The investment vehicle -- Sound Point Capital -- deliberately concealed ties to Ergen, even after Falcone's fund inquired, according to the complaint.
The ties to Ergen were concealed for more than a year, and during that time Sound Point acquired more than $1 billion of LightSquared loans, according to the lawsuit. That loan investment was large enough to prevent LightSquared from negotiating a consensual bankruptcy plan.
"The defendants wrongfully have interfered with Harbinger's efforts, and this suit seeks to hold them accountable," said the lawsuit filed by David Friedman of Kasowitz, Benson, Torres & Friedman, which represents Harbinger Capital.
Ergen on Tuesday denied wrongdoing.
"I personally followed all of the rules. I think Dish has followed all the rules and we responded in an appropriate way," Ergen said on the call. "We'll let the courts and public opinion decide who is fraudulent and who's not."
http://news.yahoo.com/falcones-harbinger-sues-dish-networks-ergen-over-lightsquared-033937795.html
Phil Falcone's hedge fund sued satellite TV mogul Charlie Ergen and his Dish Network Corp for $4 billion on Tuesday for an alleged loan-trading scheme aimed at stripping Falcone of his control over LightSquared Inc, a bankrupt wireless communications business.
The lawsuit in the U.S. Bankruptcy Court in Manhattan was filed on Tuesday at the same time as Ergen was confirming on an earnings call with Dish investors that the company was interested in acquiring LightSquared.
The lawsuit by Falcone's Harbinger Capital Partners alleges that Ergen and his affiliates engaged in a complex fraudulent scheme to become LightSquared's biggest lender. Harbinger alleges Ergen is trying to use that position to strip Falcone of the company.
The lawsuit seeks $2 billion in compensation and $2 billion in punitive damages. It also seeks to undo purchases of LightSquared loans by affiliates of Ergen.
The complaint alleges that Ergen used a specially created investment management firm to amass the largest holding of LightSquared loans, even though a credit agreement prevented competitors from buying such loans.
The investment vehicle -- Sound Point Capital -- deliberately concealed ties to Ergen, even after Falcone's fund inquired, according to the complaint.
The ties to Ergen were concealed for more than a year, and during that time Sound Point acquired more than $1 billion of LightSquared loans, according to the lawsuit. That loan investment was large enough to prevent LightSquared from negotiating a consensual bankruptcy plan.
"The defendants wrongfully have interfered with Harbinger's efforts, and this suit seeks to hold them accountable," said the lawsuit filed by David Friedman of Kasowitz, Benson, Torres & Friedman, which represents Harbinger Capital.
Ergen on Tuesday denied wrongdoing.
"I personally followed all of the rules. I think Dish has followed all the rules and we responded in an appropriate way," Ergen said on the call. "We'll let the courts and public opinion decide who is fraudulent and who's not."
http://news.yahoo.com/falcones-harbinger-sues-dish-networks-ergen-over-lightsquared-033937795.html
