NEW YORK (The Deal) -- Charlie Ergen testified about his much-maligned purchases of LightSquared debt at a Monday court hearing in New York.
LightSquared and Philip Falcone's Harbinger Capital Partners have charged that Ergen acted as a front for Dish Network (DISH) by acquiring debt in the wireless telecom even though a credit agreement barred the satellite TV company from owning the loans.
Judge Shelley Chapman of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan is hearing a suit that the telecom and hedge fund chief brought against Ergen and Dish.
The expanded hearing included arguments about competing plans to reorganize LightSquared, which have become more complicated since Dish has said it will back out of a $2.22 billion offer for some of the company's assets.
Ergen made the investments through personal investment vehicles, working with Dish treasurer Jason Kiser to make the purchases. Kiser's role has drawn scrutiny because he works at Dish and received no compensation for the work he did for Ergen. Dish made a bid for LightSquared - though it has given notice that it intends to exit its agreement.
Ergen suggested that Kiser liked having face time with Dish's chairman and controlling investor. He described Kiser as a "mentee." The two have known each other for more than 25 years, golfed together and had vacationed together with their families in Cabo San Lucas, Mexico.
Andrew Leblanc of debtor counsel Milbank, Tweed, Hadley & McCloy noted that Ergen stood to make about $150 million in principal and more in interest from the secured debt.