Phil Falcone’s hedge fund sued satellite TV mogul Charlie Ergen and his Dish Network Corp. for $4 billion yesterday for an alleged loan-trading scheme aimed at stripping Falcone of his control over LightSquared Inc., a bankrupt wireless communications business, Reuters reported yesterday. Billionaire Ergen has turned his focus to LightSquared after bowing out of a takeover fight for another wireless company, Sprint Corp., which agreed to a deal with Japan’s SoftBank Corp. Ergen increased his bid for LightSquared to $2.2 billion last month. LightSquared is a provider of satellite-based mobile voice and data services to hundreds of thousands of devices used in the public safety, security and asset-tracking sectors. It is building a 4G LTE broadband mobile network that it says will serve 260 million people. The lawsuit by Falcone’s Harbinger Capital Partners alleges that Ergen and his affiliates engaged in a complex fraudulent scheme to become LightSquared’s biggest lender. Harbinger alleges Ergen is trying to use that position to strip Falcone of the company.
