Judge Hands Dish a Victory in Suit Over LightSquared Bid

By Joseph Checkler 

A judge on Thursday handed a win to Dish Network Corp. Chairman Charlie Ergen and the company's board of directors in a shareholder lawsuit over Dish's 2013 bid for bankrupt wireless venture LightSquared.

Judge Elizabeth Gonzalez of Clark County District Court in Las Vegas deferred the case to Dish's own special litigation committee, a law clerk for the judge told The Wall Street Journal. That committee has already said the shareholder's claims should be dismissed, although it faced allegations that it wasn't independent enough to make an unbiased decision.

The judge's decision means that she will sign off on a future request from Dish to dismiss the lawsuit.

In 2013, shareholders--led by the Jacksonville, Fla., Police and Fire Pension Fund--sued Dish's board over its handling of a $2.2 billion offer to acquire LightSquared out of bankruptcy, a bid that Dish later abandoned. The offer was made as Mr. Ergen was amassing about $1 billion of LightSquared's debt for himself. The pension fund argued the bid was too high, meant to benefit Mr. Ergen's personal holdings. Dish's board and Mr. Ergen said they acted properly.

"We are pleased that the court deferred to the business judgment of an independent committee of our board that prosecution of the litigation was not in the company's best interests," the company said Thursday.

A lawyer for the pension fund didn't immediately respond to a request for comment.

After the Dish bid for LightSquared fell apart toward the end of 2013, the pension fund amended its suit to say that backing out of the deal hurt Dish shareholders, saying that getting LightSquared for $2.2 billion would benefit them.

Despite the bid being abandoned, the presence of Mr. Ergen and Dish in LightSquared's bankruptcy case never faded. A plan to restructure LightSquared, which a judge approved earlier this year, pays Mr. Ergen, LightSquared's biggest creditor, in full and in cash for his claim of more than $1 billion.

The shareholder suit was one of several faced by Mr. Ergen, and/or Dish, over LightSquared. In April, a Colorado judge dismissed a racketeering suit brought by LightSquared's champion, hedge-fund manager Philip Falcone, against Mr. Ergen and Dish, although that judge did say the suit could be refiled in a different venue.

Mr. Ergen is represented by Willkie Farr & Gallagher LLP.

Write to Joseph Checkler at [e-mail]

Access Investor Kit for DISH Network Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US25470M1099

Subscribe to WSJ: http://online.wsj.com?mod=djnwires