The complicated, litigious narrative triangle between Charlie Ergen, hedge funder Phil Falcone and bankrupt wireless company LightSquared has entered the next courtroom-fueled chapter, with Falcone's Harbinger Capital suing Ergen and his Dish Network (NASDAQ: DISH) for $1.5 billion.
The suit, filed Wednesday, July 9 in a Colorado federal court, accuses Dish and Ergen of engaging in "an illegal scheme involving mail and wire fraud, bankruptcy fraud, tortious interference and abuse of process."
Harbinger, which sought Chapter 11 protection for LightSquared in 2012 after spending billions to build its wireless network, had hoped bankruptcy restructuring would allow it to maintain control of the startup.
But Ergen slowly accumulated about $1 billion of LightSquared's senior loan debut, giving him veto power over any restructuring plan.
Harbinger initially sued Ergen and Dish last year, hoping to thwart that plan, only to have a federal judge throw out the complaint and direct the dispute to a Manhattan bankruptcy court.
Mediating a solution through that venue, LightSquared announced an agreement last week that would give JPMorgan Chase & Co, Cerberus Capital Management and Fortress Investment Group 74 percent equity in the startup. Harbinger would retain a 12.5 percent equity stake, while Ergen would be repaid on his $700 million debt investment in the form of $470 million in cash and $492 million in an unsecured note.
Ergen's lawyer last week told the court, however, that Ergen was prepared to fight that plan.
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