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Dish Network Chief's Bid To Ruin Phil Falcone's Life Not Entirely Spiteful Or Philanthropic

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Charlie Ergen stands to make quite a bit of money if he succeeds in prying LightSquared's spectrum from Phil Falcone's cold, hockey-hardened hands. Fancy that.

The satellite television mogul over the past year took on a role in LightSquared's bankruptcy case usually reserved for Wall Street investment firms: distressed-debt investor. Mr. Ergen, through an entity called SP Special Opportunities LLC, purchased LightSquared bank debt at a discount and now stands to profit handsomely if Dish succeeds in buying the company, according to people familiar with his purchases. SP Special Opportunities is wholly-owned by Mr. Ergen, according to court records.

Dish's $2.2 billion bid for LightSquared would repay lenders owed roughly $1.7 billion fully with interest. Mr. Ergen eventually accumulated LightSquared debt worth more than $1 billion, but paid well below face value when making the trades over the past 15 months or so, according to court records and some of the people familiar with the matter. The prices Mr. Ergen's trading vehicle paid haven't been publicly disclosed, but some people close to the matter said some were around 50 or 60 cents on the dollar, with other purchases made for higher prices, setting him up for hundreds of millions of dollars in profits.

And in case you think that Phil's allegations that this is all more than a little fishy are ringing true right now, don't worry: Charlie's colleagues have wrung their hands and wracked their brains, and can't find a thing wrong with it.

The circumstances surrounding Mr. Ergen's trades prompted Dish to form a special committee of the company's board earlier this year to mull whether to make a bid for LightSquared, according to a regulatory filing and people close to the company. The special committee comprised independent directors and excluded Mr. Ergen, one of these people said.

Dish's special board committee spent months evaluating a possible bid to ensure the offer would be an arm's length transaction given Mr. Ergen's positions in LightSquared debt, this person said.

Dish's special committee reviewed the company's decision to submit a reorganization plan for LightSquared alongside other lenders that centered on Dish's bid for LightSquared, and Dish's full board then approved it, according to a Tuesday regulatory filing. During that vetting process, the special committee also received a "fairness opinion" from a financial advisory firm, the filing said.

Dish's Ergen Would Personally Profit From Dish Bid for LightSquared [WSJ]


Phil Falcone Is Turning His Life Around

To put it lightly, the last couple years have been a rather dark time for Phil Falcone. Though his woes are too numerous to mention in full, they include: the adversity he's faced in getting people to believe in LightSquared; his unbelievably pissy investors, who still aren't over the time he borrowed $113 million from a gated fund to pay personal taxes, or offered to pay out redemptions in illiquid LightSquared equity; the Securities and Exchange Commission, which wants him banned from the industry for life; the woman who once offered a respite from it all, who now won't even come out of her room when she knows he's home; and, of course, the plunging returns in his once highly profitable hedge fund. It would be enough to make a grown man say 'Fuck, it. I'm done.' Put a few things in a sack, tie it to the blade of a hockey stick, and hitchhike back to Minnesota. But Phil didn't do that and now? After a merciless storm of shit that felt like it would never ease up? After long days of investors and regulators breathing down his neck and nights of having to pound on the front door because he was accidentally purposely locked out of the house? The tide feels like it's turning for Philip Falcone. Beleaguered hedge fund honcho Phil Falcone’s big bet on his own publicly traded entity, Harbinger Group, is helping to lift his troubled hedge fund, Harbinger Capital Management, out of the deep end. Falcone’s flagship fund posted returns of 10.6 percent in July and a whopping 28 percent gain in June. Of course, he's still down 5.8 percent year-to-date, and the the director of the SEC's division of enforcement wants hedge fund graduate schools to use Harbinger as a case study during the unit on "how to operate a hedge fund unlawfully," but tonight? Tonight he tells Lisa to treat herself to something nice. Tonight he tells Wilbur to pull the baby grand out of the closet, where it's sat untouched for months. Tonight his key works in the lock. Tonight we dance. Phil Helps Himself [NYP]