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 In a court filing on Friday, lawyers for LightSquared said the
company should not have to bear the "tremendous cost" in money, time
and distraction and have its efforts to emerge from bankruptcy
imperiled.
LightSquared, which filed for bankruptcy in 2012, presented closing
arguments last week in a trial over whether Ergen improperly
acquired $1 billion of the company's debt to take control of its
wireless rights.
U.S. Bankruptcy Judge Shelley Chapman has not yet issued a ruling in
the trial, which ended on Monday.
At a hearing on Wednesday, Chapman said she had received a letter
the night before that led her to question the integrity of the trial
record and that a discussion was needed about reopening it.
The trial revolved around whether Ergen held up the closing of some
of his debt purchases to conceal his identity in order to acquire a
controlling stake of LightSquared's debt.
During closing arguments, Ergen's lawyer, Rachel Strickland, said it
was Jefferies LLC, the broker on the transactions, that held up the
trades by imposing a moratorium until documentation issues were
sorted out.
In Friday's filing, lawyers for LightSquared said that Ergen's
lawyers had forwarded to the court on March 18 email communications
concerning the purported Jefferies moratorium.
Withholding the documents until then was "highly prejudicial" and
seriously impaired LightSquared's presentation of its case, the
company's lawyers said in Friday's filing.
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Reopening the record to allow for additional discovery would only
"serve to reward defendants for their misconduct" in not revealing
the information before, LightSquared's lawyers said.
Lawyers for Ergen could not immediately be reached for comment.
The allegations of delayed trades were crucial for LightSquared,
which must convince a bankruptcy judge that Ergen acted
surreptitiously and that his actions hurt the company.
LightSquared filed for bankruptcy after the Federal Communications
Commission revoked its license to build a planned wireless network.
The case is In re: LightSquared Inc et al, U.S. Bankruptcy Court,
Southern District of New York, No 12-12080.
(Reporting by Dena Aubin; editing by Kenneth Maxwell)
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