Charlie Ergen, Dish Hit With $1.5 Billion Lawsuit

Investment fund group accuses Dish and others of dirty dealings in bankruptcy proceedings for LightSquared

Dish Network and its chairman, Charles Ergen, have been slapped with a lawsuit over the bankrupt wireless company LightSquared.

In the lawsuit, filed Tuesday in U.S. District Court in Colorado, Harbinger Capital Partners accuses Ergen, Dish Network and others of engaging in “an illegal scheme of involving mail and wire fraud, banktruptcy fraud, torious inteference, and abuse of process.”

Harbinger and its co-plaintiffs are seeking more than $1.5 billion in damages in the lawsuit, which claims the defendants tried to strip the investment fund of its control of bankrupt wireless company LightSquared.

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According to the lawsuit, the alleged racketeering action was aimed at stripping  Harbinger of its right to control LightSquared and to make decisions during LightSquared’s Chapter 11 proceedings, rights that Harbinger claims to have acquired “pursuant to its multi-billion dollar investment” in LightSquared.

LightSquared filed for bankruptcy in 2012.

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The lawsuit accuses Dish Network and others of withholding crucial evidence during LightSquared’s bankruptcy proceedings, adding that the defendants engaged in a ‘troubling pattern of noncredible testimony’” and “wrongfully and deceptively created chaos in the bankruptcy proceedings so that investment fund Harbinger would lose control of the LightSquared board to which it was contractually entitled.”

The suit accuses Dish and others of surreptitiously acquiring LighSquared debt in violation of a credit agreement. The goal, Harbinger claims, was to “dominate the Bankruptcy Proceedings and direct a bargain-basement sale of LightSquared’s valuable spectrum assets to Dish.”

In addition to Dish and Ergen, the lawsuit names L-Band Acquisition, SP Special Opportunities, Special Opportunities Holdings, Sound Point Capital Management, and Stephen Ketchum as defendants.

Saying that Dish Network is analyzing the filing, a spokesman for the company did not have a comment for TheWrap, .

Pamela Chelin contributed to this report.