Gary Howard, a director at Dish Network (Nasdaq: DISH) and a former Liberty Media executive, has resigned from Dish over a disagreement about the company's handling of its $2.2 billion bid to purchase LightSquared. According to the Wall Street Journal, Howard resigned from the board on July 25, after nearly eight years.
Howard was appointed to a special board committee formed to review the LightSquared deal because of a potential conflict of interest with Dish Chairman Charlie Ergen, who stood to gain millions in personal profits from the purchase. Ergen, through an entity called SP Special Opportunities, purchased LightSquared's bank debt at a discounted rate. SP Special Opportunities is wholly owned by Ergen, and Ergen accumulated LightSquared debt worth more than $1 billion.
According to the WSJ, citing people familiar with the matter, two independent directors on the board were concerned that the deal would look bad and wanted to open up the possibility of Ergen directing some of his profits to the Dish shareholders.
However, the Dish board disbanded the committee at a July 21 board meeting. On July 23, Dish made its bid for LightSquared, and on July 25 Howard submitted his resignation.
Ergen said on an earnings call last month that he was in an "awkward" position with regard to Dish's bid for LightSquared but added that the independent special committee did approve the deal.
Howard is a veteran of the media world. He was a former Liberty Media executive who retired in 2004 after working for many years for billionaire John Malone. According to sources, Howard did not cite any dispute when he resigned.
Currently, Philip Falcone's Harbinger Capital Partners is suing Ergen, claiming his offer of $2.2 billion in cash to buy LightSquared out of bankruptcy is an attempt to take control of the company. Ergen has asked the court to dismiss the lawsuit, saying it is an attempt to derail his offer.
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