WILMINGTON, Del May 8 A bankruptcy judge on
Thursday ruled to subordinate part of Charles Ergen's $1 billion
loan debt claim in the bankruptcy wireless venture LightSquared.
Ergen, who is also chairman of Dish Network Corp,
is LightSquared's largest creditor. LightSquared had accused
Ergen of acquiring his debt surreptitiously, with an eye toward
setting the stage for a Dish takeover, and had asked Judge
Shelley Chapman to wipe out the claim or subordinate it below
claims of other creditors.
Judge Shelley Chapman, reading her decision from the bench
at a hearing on Thursday, said the claim should be subordinated
in an amount to be determined.
Chapman said that while Ergen's investment vehicle did not
expressly breach a credit agreement when it acquired the debt,
it breached the spirit of the agreement, which barred
LightSquared's competitors from holding its debt. Chapman's
reading was expected to continue throughout the afternoon.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by