Oct 29 (Reuters) - Charlie Ergen’s Dish Network Corp won dismissal on Tuesday of a lawsuit brought by Phil Falcone’s Harbinger Capital Partners in a fight over LightSquared Inc, a wireless communications business that is in bankruptcy.
Harbinger had sought $4 billion from Dish in the lawsuit, alleging that Dish had tried to strip Falcone of ownership of LightSquared.
The legal team for Ergen had called the lawsuit a transparent bid by Falcone to hold onto LightSquared after driving it into bankruptcy.
Judge Shelley Chapman of the U.S. bankruptcy court in New York ruled from the bench after a hearing on Tuesday and dismissed the claims against Dish, attorneys on both sides said afterward.
Robert Giuffra, an attorney at Sullivan & Cromwell who represented Dish and co-defendants EchoStar Corp, said Chapman also dismissed all other claims in the lawsuit.
David Friedman, an attorney with Kasowitz Benson Torres & Friedman who represented Harbinger, had a different take on Chapman’s ruling. He said the judge did not dismiss one claim in the lawsuit, in which the hedge fund is attempting to block Ergen from collecting payments on $1 billion of LightSquared loans.
Dish did not immediately respond for a request for comment, and a transcript from the hearing was not immediately available.
Chapman also said her ruling did not bar LightSquared, rather than its controlling shareholder Harbinger, from pursuing similar claims, the lawyers said.
Dish is expected to be the lead bidder at a bankruptcy court-supervised auction for LightSquared’s spectrum assets. The satellite TV company has a baseline bid of $2.2 billion.
Harbinger’s lawsuit alleged that Ergen and his affiliates engaged in a complex fraudulent scheme of amassing loans to become LightSquared’s biggest lender and using that position to try to strip Falcone of the company.
The complaint alleged that Ergen used a specially created investment management firm to acquire LightSquared loans, even though a credit agreement prevented competitors from buying such loans.
LightSquared provides satellite-based mobile voice and data services to hundreds of thousands of devices used in the public safety, security and asset-tracking sectors. It is building a 4G LTE broadband mobile network that it says will serve 260 million people.
LightSquared filed for Chapter 11 in May of 2012 after the Federal Communications Commission tentatively stopped it from building its network amid concerns in the GPS industry about potential signal interference from a swath of LightSquared’s broadband.
The case is: In re LightSquared Inc., U.S. Bankruptcy Court for the Southern District of New York, No. 12-12080.