Phil Falcone is sticking with his narrative for a little debacle called LightSquared: First, GPS companies started using his spectrum without permission, and then said that if Phil started to use it to provide 4G all over this great country, it would be a great country littered with airline wrecks. This planted a seed in the twisted mind of the wickedest man in the whole wide world, Charlie Ergen, who is trying to buy the entire electromagnetic spectrum so that anyone with entertainment needs will have no choice but to come to him and his Dish Network empire. Now, being a man absent of moral fiber, Charlie Ergen thought nothing of buying up as much LightSquared debt as he could on the cheap, even though he more or less explicitly wasn’t allowed to. This “fraudulently deprived Harbinger of control of LightSquared when it was needed most,” so that Charlie and Dish could swoop in and buy the precious if not entirely usable spectrum for nothing. Which, whether you buy Phil’s story or are partial to Charlie’s “it was for my daughter’s college fund” angle, is pretty much what happened.
Philip Falcone’s Harbinger Capital Partners is again suing Dish Network Corp. DISH +0.78% and Chairman Charlie Ergen, this time under the federal racketeering statute. Harbinger is suing both Mr. Ergen and Dish for at least $1.5 billion, saying Mr. Ergen violated the Racketeer Influenced and Corrupt Organizations Act when he acquired the debt of LightSquared—the wireless venture controlled by Harbinger—as Dish was making a bid for the company. Harbinger says Mr. Ergen’s purchases caused it to lose money and control of the LightSquared board. Mr. Falcone and other Harbinger officials resigned from the board as part of negotiations for a bankruptcy court restructuring. “Ergen and his fellow RICO Enterprise members pursued their abusive scheme through wire, mail and bankruptcy fraud, abuse of process, tortious interference with contract, and obstruction of justice,” Harbinger lawyers said in a filing with U.S. District Court in Colorado. Under RICO, originally designed to prosecute organized crime, parties can seek more damages than is typically allowed. [WSJ, related]
Phil Falcone thinks that LightSquared’s reorganization plan is way too generous to Charlie Ergen? Well, Charlie Ergen thinks that Phil Falcone’s reorganization plan for LightSquared is way too generous to Phil Falcone, and also not generous at all to himself, his lawyer would like to reiterate once again. Read more »
Dish Network Chairman Charlie Ergen was so sure that the debt of a bankrupt wireless Internet venture was the investment of the century that he staked his daughter’s future on it, without telling her or his wife. It definitely had nothing to do with that bankrupt venture’s owning some electromagnetic spectrum that Dish coveted, and if Ergen had Dish’s treasurer make the trades on his behalf, well, that’s just an unfortunate coincidence.