Phil Falcone claims to be one of the richest men on the planet and co-founded and runs hedge fund Harbinger Capital Partners. One of their key assets is Lightsquared, which wanted to build a multi-million dollar hybrid satellite and terrestrial 4G network across the US and beyond.
Charlie Ergen is also not short of a dollar, and has spent the past few years building up a portfolio of potentially extremely valuable spectrum assets.
Falcone is now alleging that Ergen, and Ergen’s various investment companies, has deliberately tried to wrest control of Lightsquared while it works its way through a Chapter 11 bankruptcy process. Lightsquared declared Chapter 11 in 2012. Last week Inmarsat announced that Lightsquared had defaulted on its promises to pay for Inmarsat capacity.
Falcone and Harbinger have commenced an action in a Colorado court for $1.5 billion against Ergen, Dish Network and other Ergen-associated companies.
Indeed, this is not the first time the pair have come into the courtroom. Last August Harbinger sued Dish/Ergen in a New York court alleging that Dish was engaged in “a fraudulent scheme” to steal Lightsquared away.
But this latest action really removes the kid-gloves, because Harbinger’s action is under the Racketeering Influenced & Corrupt Organisations Act (RICO), a strategy usually reserved for the Mafia and other discredited operations.