A group of Dish Network shareholders has lost its attempt to exclude chairman Charlie Ergen from being involved in the US DTH giant’s US$2.22bn bid for LightSquared.
A Nevada judge was cited saying the shareholders gave “no evidence and no coherent…
A group of Dish Network shareholders has lost its attempt to exclude chairman Charlie Ergen from being involved in the US DTH giant’s US$2.22bn bid for LightSquared.
A Nevada judge was cited saying the shareholders gave “no evidence and no coherent legal theory of irreparable harm” to warrant barring Ergen, who is Dish’s controlling shareholder, or other directors from its offer for the satellite/terrestrial venture’s main spectrum holdings.
The Jacksonville Police and Fire Pension Fund had called for an independent committee to oversee the bid because of an alleged conflict of interest over Ergen’s separate purchase of most of LightSquared’s debt.
A spokesman for Dish said: “The company is pleased that the Nevada Court denied in virtually all respects the plaintiff’s request to interfere with the decision-making authority of the company’s board of directors with respect to the potential acquisition of certain assets of LightSquared.”
The shareholder group was unable to comment before the press deadline.
Dish’s bid to buy the venture in an auction scheduled for 11 December is just one of four Chapter 11 bankruptcy plans that will compete for approval at a 10 December hearing.
Two of the proposals, put forward by LightSquared and Mast Capital Management LLC/US Bank National Association, also involve the sale of some or all of the assets. Meanwhile a plan by LightSquared’s controlling shareholder, hedge fund Harbinger Capital Partners, calls for a reorganisation while it negotiates with regulators for away around the spectrum interference issues that have prevented it from rolling out its planned LTE network.
However, last week the US Trustee, the arm of the Department of Justice that oversees bankruptcies, poured cold water over all four proposals in an omnibus objection.
In a court filing acting US Trustee Tracy Hope Davis said: “As an initial matter, while the risks were clearly disclosed in each of the disclosure statements, ultimately none of the plans may be feasible given the uncertainty of FCC and/or Industry Canada approval of the assignment or transfer of control of any rights and interests in any of [LightSquared’s] spectrum assets and the length of time the approval process may take.”
According to analysts at Wells Fargo, the objection could work in favour of Dish’s plan as its bid comes with the least amount of preconditions. Similar to Ergen’s move to take US MSS operator TerreStar Networks out of bankruptcy last year, Dish is offering to pay for the assets first and then arrange a sale to another buyer if the FCC does not approve the licence transfer.
“Thus, of the four plans, [Ergen’s] would appear to be ‘least objectionable’,” stated Wells Fargo in a note to investors on 25 November.
