Satellite-TV mogul Charlie Ergen is just like Richard Nixon, according to billionaire investor Phil Falcone.
Ergen’s “non-denial denials” of his Dish Network’s intent to buy debt in Falcone’s bankrupt LightSquared reminded the hedge-fund investor of the Nixon White House, according to papers filed in Manhattan bankruptcy court.
Ergen had testified that he bought debt in bankrupt wireless startup LightSquared for himself — and not on behalf of Dish.
However, the only reason Ergen used his own money to buy a controlling debt position in LightSquared was that Dish was legally barred from doing so, Falcone said in the filing.
Ergen testified in January that he bought the debt as a “personal investment,” which only later became an investment target for Dish.
Falcone slammed the explanation in the filing as “the type of ‘non-denial denials’ the Nixon White House offered when confronted by the Watergate break-in.”
“Ergen’s plan all along … was to sow confusion and have the bankruptcy process collapse, so that he could swoop in and pick up the pieces” for Dish, Falcone’s lawyers argued.
The joint filing by Falcone and LightSquared is part of their last-ditch effort to persuade Bankruptcy Judge Shelley Chapman to rule that Ergen’s purchases were improper.
Chapman is expected to decide the case by March 31.
If Falcone wins, he could seek to block or severely slow repayment to Ergen when LightSquared emerges from bankruptcy under a new $2.65 billion restructuring proposal.
The highly charged accusations are just the latest in a months-long bitter battle between the two hard-hitting billionaires over LightSquared, which owns assets that could be worth billions amid forecasts of a spectrum shortage.
Ergen paved the way for Falcone’s Harbinger Capital to take the reins of LightSquared’s restructuring in January, when Dish dropped its $2.2 billion stalking-horse bid to buy the company’s spectrum out of bankruptcy.
A confirmation hearing on the $2.65 billion restructuring plan, in which Harbinger Capital maintains an equity stake, is slated for March 17.
Back in 2012, when LightSquared was trying to stave off bankruptcy, Dish was blocked from purchasing the wireless company’s debt because it was considered a rival.
Falcone has charged that Ergen got around that rule by buying the debt through his pal Stephen Ketchum.
Ketchum bought his first batch of debt in 2012 from billionaire Carl Icahn — yet another deep-pocketed investor to have taken a shine to LightSquared.
After agreeing to buy $247 million worth of Icahn’s debt, Ergen directed Icahn, through Ketchum, to vote against an agreement with LightSquared’s creditors that would have saved the company from bankruptcy, Falcone has alleged.
LightSquared was forced into Chapter 11 after regulators nixed the company’s plan to build its network.