US satellite TV operator DISH Network has been confirmed as the lead bidder in an auction to acquire the spectrum assets of bankrupt wireless start-up LightSquared, with an offer of USD2.22 billion. A US bankruptcy court has approved DISH’s so-called ‘stalking horse’ bid and set the date for the auction at 25 November. LightSquared and its principal shareholder, Harbinger Capital Partners, had originally objected to the DISH Network bid. The court says that Harbinger Capital and others may still enter their own bids for the LightSquared spectrum, or the bankrupt firm could opt to move ahead with a Chapter 11 restructuring plan. DISH is hoping to use LightSquared’s 40MHz of L-band spectrum to help expand its operations.
Separately, a pension fund which has a stake in DISH Network is to sue the firm’s chairman Charlie Ergen for his role in using a hedge fund to acquire LightSquared debt, Fierce Wireless reports. Ergen is thought to have acquired the bankrupt firm’s USD1 billion debt at a reduced price via a vehicle called SP Special Opportunities. It is claimed that the DISH chairman will make a substantial personal profit on the deal if DISH is successful in acquiring LightSquared’s spectrum assets. The lawsuit filing states: ‘If Ergen is able to profit on his LightSquared debt purchases, he will be unjustly enriched at the company’s expense. Because Ergen identified, pursued, and secured the opportunity to purchase LightSquared’s debt through his misappropriation and use of DISH’s confidential and proprietary information, it would constitute unjust enrichment if Ergen is able to profit from it.’