Legal threats against DISH Network seem to be intensifying.
According to persons close to the situation who spoke with Bloomberg, DISH creditors claim that the satellite TV provider’s restructuring plan is unlawful in a letter addressed to the board, and if the arrangement isn’t revoked, the group will pursue legal action.
Working with the legal firm Milbank, the creditors claimed in the letter that DISH’s proposal to replace over $10 billion in debt with new secured notes violates its debtholder agreements.
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According to reports, Milbank owns the majority of DISH’s 11.75% notes due in 2027 as well as more than $10 billion, or over half, of the company’s debt.
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This follows reports that earlier this month, as the letter also notes, the corporation “moved prized assets out of bondholders’ reach”. Raising the possibility of a default by DISH’s creditors. A newly established division of DISH, EchoStar Wireless Holding, received some of the company’s wireless spectrum licenses as part of a purported sequence of transactions. Whether this constituted a violation of DISH’s loan contract is being looked into by creditors.
DISH and EchoStar had recently completed their merger to form EchoStar Corporation, just before the accusations started. The satellite TV company brought with it a massive debt load that it accumulated in the process of expanding its 5G network. The EchoStar funding infusion was intended to settle
Although DISH plans to be a cable TV company, it also wants to compete in the wireless market. The company can experience a setback as a result of these latest possible legal challenges.
It was not immediately possible to reach DISH or Milbank for comment.
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