Shareholders Sue Dish Directors Over Buying LightSquared Spectrum Assets

A group of Dish Network shareholders is suing the company and chairman Charlie Ergen after the company made a $2.2 billion bid for a bankrupt broadband provider - a move that could net Ergen hundreds of millions, but which is not in Dish's best interests.

The suit claims that after Ergen completed the purchase of $1 billion in debt of LightSquared, he then launched a personal $2 billion bid for LightSquared's spectrum assets, a bid that "directly competed" with Dish's interests in purchasing those assets.

"If approved, Dish's bid ensures that Ergen will receive hundreds of millions of dollars in personal profit on his $1 billion debt purchases," the suit states. "As a controlling shareholder and Dish director, Ergen owes a duty to the company's shareholders to act with utmost loyalty, candor, good faith and fair dealing, including when Ergen’s personal interests conflict with those of Dish and its public shareholders".

This isn't the first suit centering on the LightSquared purchase. On Aug. 6, 2013, Harbinger Capital Partners, LightSquared's controlling shareholder, filed a complaint against Dish and Ergen in New York bankruptcy court. It accused them of fraudulent behavior in the purchase of LightSquared's debt and the bid to acquire its assets. Harbinger is seeking $2 billion in compensation and $2 billion in punitive damages.

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