Third-lien notes payable over seven years by a company that just had to borrow $74 million from people (including Charlie Ergen) to stay afloat through June 15 is more than fair for a man (Charlie Ergen) who created the whole mess in the first place, according to said company.
LightSquared says it was right to keep Dish Network Corp. Chairman Charlie Ergen out of its restructuring plans, claiming it is “not required to negotiate with a competitor in its capital structure” even if that competitor owns nearly $1 billion of the company’s debt.
In a Saturday filing with U.S. Bankruptcy Court in Manhattan, lawyers for Philip Falcone’s wireless venture continued making their case that the reorganization plan is fair to Mr. Ergen, LightSquared’s top secured lender.
“There is simply no doubt that [Ergen] is receiving the indubitable equivalent of its claim,” LightSquared said in a filing….
Mr. Ergen has argued that LightSquared’s proposal to pay back his nearly $1 billion in bank debt over seven years via a note, rather than in cash like a group of hedge funds that own the same type of debt, violates the Bankruptcy Code….
LightSquared says Mr. Ergen’s holdings should be disallowed or placed below the claims of other creditors. Mr. Ergen has said he bought it for himself through his SP Special Opportunities LLC investment vehicle and that he wasn’t acting on behalf of Dish, which dropped its $2.2 billion bid for LightSquared’s spectrum assets earlier this year.