09 abr Dq List Credit Agreement
No matter how the dust spreads in the process or in the previous count of this case, it is likely that Mr. Ergen would have strayed from acquiring more than $1 billion of LightSquared`s debt with his own money and making LiqhtSquared credit purchases through SPSO, and it is almost certain that if the LightSquared credit contract had been carefully and unequivocally drafted, the damages, damages and legal costs, and un disputed legal costs, could have been avoided if LightSquared`s credit contract had been carefully and unambiguously drafted to provide that transfers can only be made to authorized agents (defined in the loan agreement to explicitly exclude disqualified lenders); In making some claims, Chapman J.A. stated that «a written agreement, which is clear, complete and only reasonable, must be applied in light of the clear meaning of the language chosen by the contracting parties, but «a court does not read the terms of a contract in a vacuum and must take due account of the circumstances and the obvious purpose that the parties seek to achieve.»  Chapman J.A. also stated that «the court does not have to turn a blind eye to the context.» The absence of sufficiently comprehensive and clear provisions on «disqualified lenders» provides fertile ground for materially divergent interpretations of the credit contract, which can result in costly and unintended risks for all parties involved. The troubled technology company (and many intelligence services) LightSquared LP («LightSquared») and its majority owner Harbinger Capital («Harbinger»), controlled by Mr. Philip Falcone, are in litigation and costly against competitors Charlie Ergen, DISH Network Corporation (DISH) and EchoStar Corporation (EchoStar). Mr. Ergen is Executive Chairman of the Board of Directors and majority shareholder of DISH and EchoStar. The acquisition of more than $1 billion in loans secured by LightSquared by Mr. Ergen`s 100% investment vehicle is at the heart of the controversy. These purchases, which made Mr. Ergen the largest creditor of LightSquared and a driving force in the upcoming restructuring, were challenged by Harbinger and LightSquared as ineligible assignments pursuant to the terms of the credit agreement. The case is expected to be fully pending in January 2014.
If LightSquared and Harbinger win, Mr. Ergen may be banned or subordinated to the share of more than $1 billion in LightSquared`s debt, and he, Dish and EchoStar may be held responsible for the damages suffered. Despite the final resolution of this controversy, it can be assumed that neither party wanted to get locked into this costly and tedious situation. A list of disqualifying companies is included in Schedule 1.01 (a) of the credit contract. The original version of Schedule 1.01 (a) contained EchoStar, and was amended in May 2012 to include, among others, DISH. As a result, each DISH and EchoStar is a «disqualified company» under the credit agreement and therefore cannot be a «legitimate agent.» Nor can Mr. Ergen himself, as a natural man, be a «legitimate agent.» LightSquared and Harbinger stated that, as a result of these restrictions, Mr. Ergen made the credit purchases through a separate investment vehicle, SPSO, which he indirectly held entirely. Harbinger argued in the lightsquared Bankruptcy Case that the term «subsidiary,» as used in the definition of «Disqualified Company,» should have the same meaning as the defined «subsidiary,» which included «any other person who is otherwise controlled by the parent company and/or one or more subsidiaries of the parent company.» As spSO is «controlled» by DISH and/or EchoStar through Mr. Ergen, SPSO is or should be considered a «subsidiary» of DISH and/or EchoStar and therefore a «disqualified company» under the terms of the credit agreement.