# LightSquared LP v. SP Special Opportunities LLC (In re LightSquared Inc.)

> United States Bankruptcy Court, S.D. New York · June 10, 2014 · 511 B.R. 253

URL: https://www.frixlaw.com/law-library/cases/8497140

## Case

- **Full name:** IN RE: LIGHTSQUARED INC., Debtors. LightSquared LP, LightSquared Inc., LightSquared Investors Holdings Inc., TMI Communications Delaware, Limited Partnership, LightSquared GP Inc., ATC Technologies, LLC, LightSquared Corp., LightSquared Inc. of Virginia, LightSquared Subsidiary LLC, SkyTerra Holdings (Canada) Inc., and SkyTerra (Canada) Inc., Plaintiff-Intervenors v. SP Special Opportunities LLC, DISH Network Corporation, EchoStar Corporation, and Charles W. Ergen
- **Court:** United States Bankruptcy Court, S.D. New York
- **Decided:** June 10, 2014
- **Citations:** 511 B.R. 253; 2014 Bankr. LEXIS 2528; 2014 WL 2612312
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Chapman
- **Judges:** Chapman
- **Cited by:** 20 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/8497140

## How later opinions describe it (automated extraction)

- holding that party to credit agreement could not “end-run . . . the Eligible Assignee provisions of the Credit Agreement” by engaging in prohibited conduct through a shell company
- discussing valuations available to Ergen

## Opinion text

Chapter 11
POST-TRIAL FINDINGS OF FACT AND CONCLUSIONS OF LAW
SHELLEY C. CHAPMAN, UNITED STATES BANKRUPTCY JUDGE
TABLE OF CONTENTS
THE PARTIES.. .261
PROCEDURAL HISTORY.. .262
FINDINGS OF FACT.. .265
I. The Parties and Certain Relevant Third Parties... 265
II. The LightSquared LP Credit Agreement and the Restrictions on the Transfer of LP Debt. ..267
III. Background Regarding SPSO’s Purchases of LP Debt.. .271
A. Messrs. Ergen and Kiser Investigate Whether DISH and EchoStar Can Purchase LP Debt.. .271
*259 B. Messrs. Ergen and Kiser Create the Bal Harbour Entities, and Then SPSO, to Purchase LP Debt.. .272
C. SPSO and Mr. Ketchum Did Not Reveal that Mr. Ergen Was Behind the LP Debt Purchases.. .275
IV. SPSO is Solely a Front for Mr. Er-gen. . .275 "
A. SPSO Was Undercapitalized and Funded Solely at Mr. Ergen’s Discretion. . .276
B. SPSO Votes Against Extension of LightSquared’s Negotiations with Lenders... 277
C. SPSO’s LP Debt Purchases.. .278
D. Mr. Ergen’s Desire to Obtain a Blocking Position in LP Debt.. .280
V. Mr. Ergen Acted, at Least in Part, for the Benefit of DISH in Acquiring LP Debt Through SPSO.. .280
A. Mr. Kiser’s Role in SPSO’s LP Debt Purchases.. .281
B. Mr. Ergen Uses DISH Employees, Resources, and Legal Counsel to Facilitate the LP Debt Purchases... 282
C. DISH Board Members and Management Take No Action Upon Learning of Mr. Ergen’s LP Debt Acquisition.. .283
D. Mr. Ergen Controls the Boards of DISH and EchoStar.. .285
E. Soon After Acquiring a Blocking Position, Mr. Ergen Makes a Presentation to the DISH Board that Contemplates a DISH Bid.. .286
VI. DISH Contemplates and Makes a Bid for LightSquared at Mr. Ergen’s Behest. . .288
A.DISH Forms a Special Committee to Evaluate a DISH Bid and the Propriety of Mr. Ergen’s LP Debt Purchases.. .288
B. Mr. Ergen Makes a “Personal” Bid That Sets the Floor and Ensures He Will Be Repaid in Full.. .288
C. The DISH Special Committee.. .289
VII. LightSquared as a Strategic Investment for DISH... 293
A. DISH and EchoStar’s Prior Acquisitions of Spectrum Assets.. .293
B. Mr. Ergen’s Consideration of LightSquared’s Spectrum Assets.. .294
C. DISH’s Pursuit of Sprint and Clear-wire... 296
VIII. Mr. Ergen’s Assertion That He Was Making a Personal Investment is Belied by the Evidence.. .296
A. SPSO’s Purchases of LP Debt Were Inconsistent with Mr. Ergen’s Personal Past Investment Strategy.. .296
B. The Price at Which Mr. Ergen Attempted to Purchase the LP Debt and Offered for the LP Preferred Interests is Inconsistent with the “Great Investment” Premise.. .298
IX. LightSquared and Harbinger Were Aware or at Least Had a Strong Suspicion That Mr. Ergen was Acquiring LightSq-uared Debt.. .298
A. Although Public Information Provided No Certainty as to Who Was Behind Sound Point’s Purchases, There Was Ample Reason to Believe It Was Mr. Er-gen. . .298
B. Harbinger and LightSquared Add DISH to the List of Disqualified Companies Because They Believe Mr. Ergen Is Buying LP Debt.. .302
C. Neither Harbinger Nor LightSquared Attempted to Use a Rule 2004 Subpoena to Determine Who Was Buying LightSq-uared Debt Through Sound Point...302
D. LightSquared and Moelis Representatives Also Suspect Mr. Ergen Is Buying Debt Through Sound Point.. .303
*260 E. LightSquared and Harbinger Make Inquiries to Determine Who Is Behind Sound Point’s Purchases but Fail to Take Action Based Upon Their Suspicions. . .303
F. On May 21, 2013, LightSquared and Harbinger Definitively Learn that Mr. Er-gen is Behind SPSO.. .305
X. SPSO Delays Closing Hundreds of Millions of Dollars in LP Debt Trades For Several Months During a Critical Time in LightSquared’s Bankruptcy Case.. .305
A. Mr. Kiser, with Sound Point’s Assistance, Delays the Closing of LP Debt Trades...305
B. There Was No True Economic Benefit for Messrs. Ergen and Kiser to Keep the LP Debt Trades Open... 308
C. LP Debt Trades Were Not Left Open Due to Liquidity Constraints... 310
XI. LightSquared and its Creditors Were Injured by SPSO’s Conduct.. .311
A. Negotiations with the Ad Hoc Secured Group Are Affected by SPSO’s Pending LP Debt Trades... 311
B. Once SPSO Discloses its Blocking Position and Joins the Ad Hoc Secured Group, Plan Negotiations Cease.. .311
C. Within Weeks of SPSO’s Joining the Ad Hoc Secured Group, The LBAC Bid is Adopted.. .312
D. LightSquared’s Negotiations with Creditors Come to an End after the Filing of the Ad Hoc Secured Group Plan.. .313
E. LBAC and DISH Seek to Obtain Broad Releases for Themselves and Their Affiliates in the Ad Hoc Secured Group Plan...314
DISCUSSION.. .314
I. Introduction... 314
II. SPSO Cannot Be Held Liable for Breach of the Express Terms of the Credit Agreement.. .315
A.SPSO Was Not Technically Prohibited from Purchasing LP Debt.. .315
III. SPSO’s Acquisition of the LP Debt Violated the Spirit of the Credit Agreement and is a Breach of the Implied Covenant of Good Faith and Fair Dealing. . .317
A. SPSO’s LP Debt Purchases... 318
B. Mr. Ergen’s Conduct in the Spring of 2013 Establishes that He Was Acting for DISH... 323
C. Breach of the Implied Covenant of Good Faith and Fair Dealing.. .333
IV. The SPSO Claim Shall Not Be Disallowed. . .339
A. The SPSO Claim is Not Void or Voidable Even Though the Court Finds an Implied Breach and Even if the Court Were to Have Found an Express Breach... 339
B. The Inaction and Delay of LightSq-uared and Harbinger Preclude the Award of Affirmative Damages... 341
V. SPSO’s Claim Shall be Equitably Subordinated to the Extent of Injury Caused to Innocent Creditors... 345
A. Applicable Law... 346
B. Mobile Steel Prong I: SPSO’s Inequitable Conduct.. .352
1. Breach of the Implied Covenant of Good Faith and Fair Dealing.. .352
2. SPSO, Through the Conduct of Messrs. Kiser and Ketchum, Purposefully Delayed the Closing of LP Debt Trades...353
C. Mobile Steel Prong II: SPSO’s Conduct Harmed LightSquared’s Creditors ...360
CONCLUSION... 361
Between April 13, 2012 and April 26, 2013, Charles Ergen, through an entity *261 named SPSO, purchased approximately $844 million of the senior secured debt of LightSquared LP, a debtor in these chapter 11 cases. Mr. Ergen — the founder, chairman of the board of directors, and controlling shareholder of DISH Network — bought the debt, he says, without any strategic intent to benefit DISH. Rather, he was interested in acquiring LightSquared debt personally because he “liked the investment” and because he had been advised that DISH itself was not eligible to purchase the debt due to restrictions in the LightSquared LP Credit Agreement. The “diligence” on the purchaser eligibility issue, such as it was, was conducted by Mr. Ergen’s longtime friend Jason Kiser, the Treasurer of DISH, who from time to time worked on personal matters for Mr. Ergen. Mr. Kiser also arranged the trades on behalf of Mr. Er-gen, on “his own time” while at work at DISH. Promptly after Mr. Ergen’s initial debt purchase in the face amount of $5 million on April 13, 2012, and particularly after his significant debt purchase in the face amount of $247 million on May 4, 2012, the press began to speculate about the identity of the SPSO purchaser, publishing stories with headlines such as “LightSquared [Term Loan] Trades North of 70 as Ergen Enters the Picture” and “Ergen Builds Cash Pile Amidst LightSq-uared Restructuring Talks.” The trades and the press reports did not go unnoticed by LightSquared, especially after the news that it was Carl Icahn who had sold his nearly quarter billion dollar position in the debt to SPSO. Philip Falcone, the founder and principal owner of Harbinger Capital Partners, which is the principal shareholder of LightSquared, reacted to the news swiftly and strategically, writing in an email message: ‘Well I’m working on giving him a nice surprise,” referring to Mr. Ergen and to LightSquared’s May 9, 2012 modification of its Credit Agreement’s Disqualified Companies list to include DISH.
The game was afoot. Almost two years of moves and counter moves have ensued, with LightSquared’s other stakeholders sometimes watching from the sidelines and sometimes entering the fray — all under the watchful gaze of the Federal Communications Commission, which to this day has not taken definitive action to clarify the status of LightSquared’s valuable spectrum assets. The questions before the Court, among others, are whether SPSO’s debt purchases violated the LightSquared LP Credit Agreement and whether its now approximately $1 billion claim (inclusive of interest) should therefore be disallowed, or, alternatively, whether SPSO’s claim should be equitably subordinated by virtue of its conduct in connection with the debt purchases and/or in connection with these chapter 11 cases. The Court’s analysis is as follows. 1
THE PARTIES
Plaintiffs LightSquared LP, LightSq-uared Inc., LightSquared Investors Holdings Inc., TMI Communications Delaware Limited Partnership, LightSquared GP Inc., ATC Technologies, LLC, LightSq-uared Corp., LightSquared Inc. of Virginia, LightSquared Subsidiary LLC, SkyT-erra Holdings (Canada) Inc., and SkyTerra (Canada) Inc., as debtors and debtors in possession (collectively, with certain of their affiliated debtors and debtors in possession, “LightSquared” or the “Debtors”) provide wholesale mobile satellite communications and broadband services throughout North America. Through its ownership of several satellites and licenses to use mobile satellite service spectrum issued by the Federal Communications Commission (the “FCC”), LightSquared *262 delivers voice and data services to mobile devices used by the military, first responders and other safety professionals, and individuals throughout North America. (See Declaration of Marc R. Montagner [Bankr. Docket No. 3] ¶¶ 18-3 1.) 2
Plaintiffs Harbinger Capital Partners LLC, HGW U.S. Holding Company LP, Blue Line DZM Corp., and Harbinger Capital Partners SP, Inc. (collectively, “Harbinger”) own in excess of 82 percent of the common equity of LightSquared and assert a general unsecured claim against LightSquared LP and claims against LightSquared Inc. (See Adv. Docket No. 1 ¶ 17.)
Defendant DISH Network Corporation (“DISH”) is a public corporation organized and existing under the laws of the state of Nevada with its principal place of business in Englewood, Colorado. DISH provides broadband and satellite television services and aims to expand its broadband offerings, including by building a terrestrial broadband network. (PX0781 ¶¶ 30, 43.) In addition to its satellite broadcast business, DISH owns significant spectrum assets, including mobile satellite spectrum. (Id.) DISH is a direct competitor of LightSquared. (Id. ¶ 30; Jan. 13 Tr. (Er-gen) 14:13-18; Jan. 10 Tr. (Kiser) 70:24-71:1; PX0013 at 10; Montagner Dep. 72:13-74:7; PX0159 at L2AP0007578.) 3
Defendant EchoStar Corporation (“Ech-oStar”) is a public corporation organized and existing under the laws of the State of Nevada with its principal place of business in Englewood, Colorado. EchoStar is a satellite communications company that currently operates, leases, or manages a number of satellites, including the satellites that provide services to DISH. Ech-oStar is a direct competitor of LightSq-uared. (PX0781 ¶ 31; Jan. 10 Tr. (Kiser) 15:15-21; Jan. 13 Tr. (Ergen) 15:8-12.)
Defendant SP Special Opportunities LLC (“SPSO”) is a limited liability company organized and existing under the laws of the State of Delaware with its principal place of business nominally in New York, New York. SPSO’s sole member and managing member is Special Opportunities Holdings LLC (“SO Holdings”). SO Holdings is a Delaware limited liability company whose sole member and managing member is Defendant Charles W. Er-gen (“Ergen”).
Defendant Charles W. Ergen, a natural person, is the founder, chairman of the boards of directors, and majority owner of both DISH and EchoStar. Mr. Ergen— personally and through his family trusts— beneficially owns and controls over 88 percent of DISH’s voting shares and over 80 percent of EchoStar’s voting shares. Mr. Ergen owns approximately 53 percent of DISH. Mr. Ergen also wholly owns and controls SO Holdings and SPSO. (PX0700 ¶¶ 1-2; Jan. 13 Tr. (Ergen) 94:19-95:2, 208:18-211:20; Howard Dep. 37:25-38:16; PX0372 at 2, 5; PX0371 at 2.)
PROCEDURAL HISTORY
On May 14, 2012 (the “Petition Date”), LightSquared commenced a voluntary bankruptcy case pursuant to chapter 11 of title 11 of the United States Code (the *263 “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York. ([Bankr. Docket No. 1].)
On August 6, 2013, Harbinger commenced the Adversary Proceeding against Mr. Ergen, DISH, EchoStar, L-Band Acquisition, LLC (“LBAC’), SPSO, SO Holdings, Sound Point Capital Management LP {“Sound Point”), and Mr. Stephen Ket-chum, alleging inequitable conduct, fraud, aiding and abetting fraud, tortious interference with prospective economic advantage, tortious interference with contractual relationship, unfair competition, and civil conspiracy; and seeking equitable disal-lowance of claims, compensatory and punitive damages, costs and fees, interest, and other appropriate relief. {See Adv. Docket No. 1.)
On August 22, 2013, LightSquared intervened in the Adversary Proceeding on limited grounds. (Adv. Docket No. 15.) U.S. Bank National Association (“U.S. Bank”), Mast Capital Management LLC {“Mast”), and the Ad Hoc Secured Group of LightSquared LP Lenders (the “Ad Hoc Secured Group”) also intervened on the same day. (Adv. Docket Nos. 12, 14.)
On September 9, 2013, motions to dismiss were filed by each of the defendants in the Adversary Proceeding. (Adv. Docket Nos. 29, 30, 32, 33, 34, 35.) 4 On September 30, 2013, Harbinger amended its complaint as of right (the “Harbinger Amended Complaint”). (Adv. Docket No. 43.) Between October 3 and October 5, 2013, each of the defendants filed a motion to dismiss the Harbinger Amended Complaint. (Adv. Docket Nos. 44, 45, 46.) After the filing of additional oppositions and replies, this Court held a hearing on October 29, 2013.
By Order dated November 14, 2013 (the “November OrdeP’), this Court granted Defendants’ motions to dismiss the Harbinger Amended Complaint. (PX0770.) The Court also granted Harbinger leave to file a second amended complaint that did not assert claims on Harbinger’s own behalf, but that merely set forth an objection, pursuant to section 502 of the Bankruptcy Code, to SPSO’s claim. {Id.) The Court also authorized LightSquared to file a complaint setting forth the basis for its intervention. {Id.) On November 21, 2013, the Court issued its Memorandum Decision Granting Motions to Dismiss Complaint {“Decision on the Motions to Dismiss”), which set forth the bases for the November Order. (Adv. Docket No. 68; Harbinger Capital Partners LLC v. Ergen (In re LightSquared Inc.), 504 B.R. 321 (Bankr.S.D.N.Y.2013).)
On November 15, 2013, LightSquared filed a Complaint-in-Intervention (the “LightSquared Complaint”) against SPSO, DISH, EchoStar, and Mr. Ergen (collectively, the “Defendants”) seeking: (i) a declaration that SPSO is not an “Eligible Assignee” under LightSquared’s October 10, 2010 Credit Agreement, as amended, modified, and restated (the “Credit Agreement”) (PX0004), (ii) disallowance of SPSO’s claim under 11 U.S.C. § 502 (b), and (in) equitable disallowance of SPSO’s claim. (PX0771.) The LightSquared Complaint further alleges breach of contract against SPSO, as well as tortious interference with contractual relations against all Defendants. (Id.) The LightSq-uared Complaint also seeks equitable subordination as a remedy. (Id.)
On December 2, 2013, Harbinger filed a Second Amended Complaint (the “Harbinger Second Amended Complaint,” and, together with the LightSquared Com *264 plaint, the “Complaints"), seeking (i) a declaration that SPSO is not an “Eligible Assignee” under the Credit Agreement, (ii) disallowance of SPSO’s claim under 11 U.S.C. § 502 (b), (iii) equitable disallowance of SPSO’s claim, and (iv) equitable subordination of SPSO’s claim under 11 U.S.C. § 510 . The Harbinger Second Amended Complaint further alleges breach of contract against SPSO. (PX0781.)
On November 25 and November 26, 2013, the Defendants filed motions to dismiss the LightSquared Complaint, 5 and, on December 5, 2013, SPSO filed a motion to dismiss the Harbinger Second Amended Complaint. (Adv. Docket No. 84.) After the filing of oppositions and replies, the Court held a hearing on December 10, 2013.
By Order dated December 12, 2013 (the “December Order”), the Court granted in part and denied in part Defendants’ motions to dismiss the Complaints. (PX0784.) The December Order dismissed all of the claims asserted in the Harbinger Second Amended Complaint, except for Harbinger’s claim seeking disal-lowance of SPSO’s claim under 11 U.S.C. § 502 (b). (Id. ¶3.) With respect to the LightSquared Complaint, the Court granted Defendants’ motions only as to LightSquared’s equitable disallowance claim against SPSO and its tortious interference claim against SPSO. (Id. ¶2.) The Court retained jurisdiction to hear and determine all matters arising from the interpretation, implementation, and enforcement of the December Order. (Id. ¶4.) Answers to the remaining counts of the LightSquared Complaint and the Harbinger Second Amended Complaint were filed on December 24, 2013. (Adv. Docket Nos. 102, 103, 104.) Pretrial briefs were filed by the parties on January 7 and January 8, 2013. (Adv. Docket Nos. 113, 115, 119, 121.)
On January 9, 2014, the Court commenced a trial 6 in the Adversary Proceeding and heard live testimony from eight witnesses: (a) Charles Ergen; (b) Thomas Cullen; (c) Stephen Ketchum; (d) Jason Kiser; (e) Philip Falcone; (f) Douglas Smith; (g) William Q. Derrough; and (h) Mark S. Hootnick.
The parties also submitted additional evidence consisting of (i) over 800 exhibits and (ii) excerpts from the deposition transcripts of six witnesses in lieu of live testimony. Deposition designations were submitted from the deposition transcripts of: (a) Steven Goodbarn; (b) Gary Howard; (c) Marc Montagner; (d) Robert Olson; (e) David Rayner; and (f) Joseph Roddy.
The Court requested that proposed findings of fact and post-trial briefs be submitted by LightSquared and Harbinger (together, “Plaintiffs") on February 24, 2014, and by Defendants on March 10, 2014. Those dates were subsequently modified by the Court. On February 24, 2014 and March 10, 2014, respectively, Plaintiffs submitted their (i) post-trial brief and proposed findings of fact and (ii) supplemental post-trial brief and supplemental proposed findings of fact. (Adv. Docket Nos. 132, 133, 137, 138.) On March 14, 2014, Defendants submitted proposed findings of fact and post-trial briefs, together with a response to Plaintiffs’ supplemental posttrial brief. (Adv. Docket Nos. 140, 141, 142, 143, 144.) Closing arguments were held on March 17, 2014.
*265 In addition, a flurry of sanctions motions and replies has been filed by the parties, each of which remains sub judice. (See Adv. Docket Nos. 145, 146, 148, 151, 152, 154,158.)
This is an adversary proceeding pursuant to Rule 7001 of the Federal Rules of Bankruptcy Procedure. Pursuant to 28 U.S.C. §§ 157 and 1334(b), the Court has jurisdiction to consider this matter a “core” proceeding. Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
FINDINGS OF FACT
The following constitute this Court’s findings of fact and conclusions of law pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure. Having considered the voluminous evidence, testimonial and documentary, including all exhibits admitted into evidence, as well as Plaintiffs’ and Defendants’ post-trial proposed findings of fact and briefs, and mindful that a court should not blindly accept findings of fact and conclusions of law proffered by the parties (see St. Clare’s Hosp. and Health Ctr. v. Ins. Co. of North Am. (In re St. Clare’s Hosp. and Health Ctr.), 934 F.2d 15 (2d Cir.1991) (citing United States v. El Paso Natural Gas Co., 376 U.S. 651, 656 , 84 S.Ct. 1044 , 12 L.Ed.2d 12 (1964))), and having conducted an independent analysis of the law and the facts, the Court makes the following Findings of Fact and Conclusions of Law: 7
I.The Parties and Certain Relevant Third Parties
1. In 1980, Mr. Ergen founded Echo-Sphere LLC (‘EchoSphere”) with James DeFranco and Mr. Ergen’s wife, Cantey Ergen. (Jan. 13 Tr. (Ergen) 11:24-12:7, 12:21-13:11.) EchoSphere became EchoS-tar, which later split into EchoStar and DISH. (Jan. 13 Tr. (Ergen) 14:19-24.) Today, EchoStar is a technology company that manufactures set-top boxes and builds and operates satellités. (Rayner Dep. 27:10-18; Jan. 13 Tr. (Ergen) 14:25-15:7.)
2. DISH sells satellite television services. (Jan. 13 Tr. (Ergen) 14:13-18.) EchoStar is a supplier to DISH, but they are separate companies. (Jan. 13 Tr. (Er-gen) 15:8-12.)
3. DISH’s board of directors has ten members, four of whom are independent under NASDAQ rules. (Jan. 13 Tr. (Er-gen) 15:13-21; see also 3/22/13 DISH Network Corp. Schedule 14A at 2-3; 9/17/13 DISH Network Corp. Form 8-K at 1; 11/5/13 DISH Network Form 8-K at 1; 2/21/14 DISH Network Corp. Form 10-K at 99.) The DISH Board of Directors has four regularly-scheduled meetings a year, but on average, the DISH Board will meet between eight and ten times a year. (Jan. 13 Tr. (Ergen) 16:11-14.) Discussions at the DISH board level cover many subjects, including potential acquisitions, the raising of capital, the strategic direction of the company, and personnel issues within the company. (Jan. 13 Tr. (Ergen) 16:21-25.)
4. Neither DISH nor EchoStar has an interest in SPSO. (PX0767 (Goodbarn Nevada Dep.) 32:24-33:2, 90:10-23; Olson Dep. 14:6-15:14, 26:7-27:11; Jan. 13 Tr. (Ergen) 36:7-9.)
5. Mr. Ergen, as the holder of a majority share of voting rights (approximately *266 88 percent and 79.4 percent of the total voting power in DISH and EchoStar, respectively), has the ability to elect a majority of the directors for both companies and control all other matters requiring the approval of their stockholders. (Jan. 13 Tr. (Ergen) 94:19-95:2, 208:18-211:20; Howard Dep. 37:25-38:16; PX0372 at 2, 5; PX0371 at 2.) Mr. Ergen voted for each of the current DISH Board members, and he testified that he does not know whether it is possible for someone to be a director of DISH without his vote. (Ergen Dep. 18:5-16, 26:19-25; Jan. 13 Tr. (Ergen) 95:3-5.) As a result of Mr. Ergen’s dominance, both DISH and EchoStar are “controlled companies] as defined in the Nasdaq listing rules.” (PX0349 at 39-40; PX0350 at 34.)
6. Mr. Thomas Cullen {“Cullen”) is the Executive Vice President of Corporate Development at DISH, a position he has held since June 2011. (Jan. 17 Tr. (Cullen) 98:19-20,101:3-5.)
7. Mr. Jason Kiser (“Kiser”) is the Treasurer of DISH and Vice President of Corporate Development at DISH and Ech-oStar, and, together with Messrs. Ergen and Cullen, is part of the corporate development team at DISH and EchoStar. (Jan. 10 Tr. (Kiser) 15:25-16:6, 68:24-69:2, 69:20-22.) Mr. Kiser arranged SPSO’s trades in the secured debt of LightSq-uared LP {“LP Debt”) pursuant to direction from Mr. Ergen by placing the orders for the amount and pricing of the debt and arranging to provide the funds to close the trades. (Jan. 10 Tr. (Kiser) 25:6-8.)
8. Mr. Stephen Ketchum {“Ketchum”) is the founder and sole managing partner of Sound Point. (Jan. 15 Tr. (Ketchum) 13:13-19.) Sound Point is an investment management and advisory firm that served as trading manager and investment advis- or for SPSO and executed SPSO’s purchases of LP Debt. (Jan. 15 Tr. (Ketchum) 20:14-17.) Messrs. Kiser and Ketchum had a twenty-year long relationship that involved work related to both EchoStar and DISH. Mr. Ketchum served as the point of contact between Sound Point and Messrs. Kiser and Ergen. (Jan. 15 Tr. (Ketchum) 14:19-22, 93:23-94:3; Jan. 10 Tr. (Kiser) 24:10-25:8.)
9. SPSO was formed by Sound Point for the exclusive purpose of serving as the investment vehicle through which Mr. Er-gen made trades in LP Debt (PX0162; PX0171; PX0183; PX0224; Jan. 10 Tr. (Kiser) 30:16-21, 31:20-32:14; PX0700 ¶¶ 1-2), without those purchases being traceable to Mr. Ergen (see Jan. 10 Tr. (Kiser) 30:16-21, 31:20-22, 32:2-14, 90:6-12, 90:25-91:20; Jan. 13 Tr. (Ergen) 36:13-37:4, 49:20-50:25; PX0117; PX0290 at LSQSPCD-000006771; PX0298).
10. Mr. Steven R. Goodbarn (“Good- barn”)i is a member of the DISH Board of Directors and was a member of the special committee of independent directors of DISH that was formed to evaluate and make recommendations regarding a possible bid by DISH for LightSquared’s assets (the “Special Committee”). (PX0768 ¶ 2.)
11. Mr. Gary S. Howard (“Howard”) is a former member of the DISH Board of Directors and was a member of the Special Committee. (PX0768 ¶¶ 2, 53.)
12. Harbinger began acquiring the securities of LightSquared’s predecessor, SkyTerra Communications, Inc. {“SkyTer-ra”), in 2006 and eventually took control of the company in early 2010, renaming it LightSquared LP. (Jan. 16 Tr. (Falcone) 14:23-16:11.)
13. Harbinger currently owns about 80 to 85 percent of the stock of LightSquared. (Jan. 16 Tr. (Falcone) 18:8-12.) About 30 to 40 percent of Harbinger’s assets are invested in LightSquared, and Harbinger *267 has invested approximately $1.8 to $2 billion in LightSquared. (Jan. 16 Tr. (Fal-cone) 81:3-19.)
14. Mr. Philip Falcone (“Falcone”) is the portfolio manager of Harbinger Capital Partners LLC. (Jan. 16 Tr. (Falcone) 12:3-13.) Mr. Falcone has been trading high yield distressed debt for over 20 years. (Jan. 16 Tr. (Falcone) 13:13-18.) Mr. Falcone has between $500 and $700 million invested in Harbinger, which is a majority of his net worth. (Jan. 16 Tr. (Falcone) 80:6-20.)
15. Mr. Falcone is a member of LightSquared’s board of directors, having joined the Board in early 2012. (Jan. 16 Tr. (Falcone) 17:25-18:1; 82:1-3.) A majority of the LightSquared Board of Directors is controlled by Harbinger. (Jan. 16 Tr. (Falcone) 81:23-25.)
II. The LightSquared LP Credit Agreement and the Restrictions on the Transfer of LP Debt
16. In 2010, LightSquared obtained authorization from the FCC to build an ancillary terrestrial network (“ATC Network”) that would integrate its satellite service with terrestrial satellite ground stations to provide fourth generation long term evolution (4G-LTE) broadband mobile services throughout the United States. (DX054 ¶¶ 5-7, 29-30, 33.) To finance the buildout of its ATC Network, on October 1, 2010, LightSquared LP and certain of its affiliates entered into the Credit Agreement with UBS AG, Stamford Branch (“UBS”), as Administrative Agent, and entities that were, or would serve as, lenders under the Credit Agreement (collectively, the “Lenders”). (Id. ¶37.) The Credit Agreement is governed by New York law. (PX0004 at HARBAP00004158, § 10.09(a).)
17. The Credit Agreement restricts transfers of the LP Debt. Section 10.04(a) of the Credit Agreement provides, in pertinent part:
[N]o Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible As-signee in accordance with the provisions of paragraph (b) of this Section 10.04, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section 10.04 or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment or transfer by Borrower shall be null and void).
(PX0004 at HARBAP00004153.)
18. Section 10.04(b) states that assignments of LP Debt are permitted to Eligible Assignees: “Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement....” (PX0004 at HAR-BAP00004154.)
19. The term “Eligible Assignee” is defined in Section 1.01 of the Credit Agreement as follows: “[A]ny person to whom it is permitted to assign Loans and Commitments pursuant to Section 10.04(b)(i); 'provided that ‘Eligible Assignee’ shall not include Borrower or any of its Affiliates or Subsidiaries, any natural person or any Disqualified Company.” (Id. at HAR-BAP0004058 (emphasis in original).)
20. The term “Eligible Assignee” also excludes “any natural person.” (PX0004 at HARBAP0004058, § 1.01.) Thus, pursuant to Section 10.04(b)(i), a natural person may not take-an assignment of LP Debt (“Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement ... ”). (PX0004 at HARBAP00004154.) Pursuant *268 to Section 10.04(d), a natural person also may not receive a Participation in LP Debt (“Any Lender may at any time, without the consent of, or notice to, Borrower or the Administrative Agent sell partic-ipations to any person (other than a natural person, Borrower or any of its Affiliates or any Disqualified Company ... ”)). {Id. at HARBAP00004155.)
21. Mr. Ergen, as a natural person, is not an Eligible Assignee and is not permitted to own the LP Debt.
22. “Disqualified Company” is defined in Section 1.01 as follows:
[A]ny operating company which is a direct competitor of the Borrower identified to the Administrative Agent in writing prior to the Closing Date and set forth on Schedule 1.01(a), and thereafter, upon the consent of the Administrative Agent ... such additional bona fide operating companies which are direct competitors of the Borrower as may be identified to the Administrative Agent from time to time and notified to the Lenders. A Disqualified Company will include any known subsidiary thereof.
(PX0004 at HARBAP0004057-58.) The Credit Agreement thus prohibits assignment or other transfer of the LP Debt to a LightSquared competitor named on Schedule 1.01(a) or a known subsidiary of such a competitor.
23. The word “Subsidiary” in the definition section of the Credit Agreement is defined, “with respect to any person (the ‘parent’),” as including, “any other person that is otherwise Controlled by the parent....” (PX0004 at HARBAP0004073, § 1.01.) “Controlled” is defined to mean “the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise....” {Id. at HARBAP0004056, § 1.01.)
24. SPSO, SO Holdings, and Mr. Er-gen were not initially included on Schedule 1.01(a) of the Credit Agreement, which, as of the inception of the Credit Agreement on October 1, 2010, did include EchoStar. (PX0004 at HARBAP00004166.)
25. On May 9, 2012, LightSquared amended the Disqualified Company list, Schedule 1.01(a) of the Credit Agreement, to add additional LightSquared competitors, including, among others, DISH. (PX0142.) On May 12, 2012, LightSq-uared again amended the Disqualified Company list to add Cablevision. (Jan. 16 Tr. (Falcone) 49.T7-19; PX0901 at HAR-BAP00011331; see also PX0190.) Each of DISH and EchoStar is a Disqualified Company under the Credit Agreement. SPSO is not a “known subsidiary” of any company identified as a Disqualified Company.
26. According to its CEO, LightSq-uared amended the Disqualified Company list on May 9 and 12, 2012, immediately prior to the Petition Date, “to make sure that the list of disqualified companies included all of [LightSquared’s] competitors, because we didn’t want competitors involved in the capital structure. We thought it was important as we were entering bankruptcy to make these updates.” (Jan. 9 Tr. (Smith) 126:22-127:24; PX0161.)
27. The Credit Agreement defines the term “Affiliate” as “when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified.” (PX0004 at HARBAP00004050-4051.)
28. On September 18, 2010, UBS proposed a draft of the Credit Agreement which did not include the concept of a Disqualified Company, but rather stated that an Eligible Assignee “shall not include *269 Borrower or any of its Affiliates or Subsidiaries, any natural person or any person listed on Schedule 1.01(a).” (PX0001 at L2AP0009323.) UBS’s draft did not restrict transfers to affiliates or “Affiliates” of companies or persons listed on Schedule 1.01(a); it only restricted transfers to companies or persons listed in Schedule 1.01(a). (PX0001 at L2AP0009323.)
29. On September 19, 2010, counsel for LightSquared proposed comments to UBS’s draft. LightSquared’s draft restricted transfers of LP Debt to any “Affiliate” of a company or person listed on Schedule 1.01(a). (PX0003.) Specifically, the draft stated that an Eligible Assignee “shall not include Borrower or any of its Affiliates or Subsidiaries, any natural person or any Competitor.” (PX0003 at L2AP0011786 (emphasis added).) It further stated, “‘Competitor’ shall mean (i) any person listed on Schedule 1.01(a), (ii) any other competitor of the Borrower that is designated as such in writing to the Administrative Agent by the Borrower from time to time and (iii) any Affiliate of any such person.” (PX0003 at L2AP0011784.) Therefore, in this draft, transfers were restricted to any person or company listed on Schedule 1.01(a) as well as their “Affiliates.”
30. On September 21, 2010, counsel for UBS proposed revisions to LightSquared’s September 19, 2010 draft. (PX0002.) Those revisions removed the transfer restriction on any Affiliate of a company listed on Schedule 1.01(a) and, instead, restricted transfers to any Disqualified Company and “any known subsidiary thereof.” (PX0002 at L2AP0011532.) The language from this draft defining Eligible Assignee and Disqualified Company is what appears in the final, executed Credit Agreement. (PX0002 at L2AP0011532; PX0004 at HARBAP00004057-4058.)
31. LightSquared Inc.’s Fourth Amended and Restated Stockholders’ Agreement includes the defined term “Affiliates” and prohibits the transfer of any equity securities to “any of the entities set forth in Schedule 2.1(a)(ii) or any of their respective Affiliates.” (PX0007 at HAR-BAP00010483.) LightSquared did not include a similar restriction on the transfer of its bank debt under the Credit Agreement.
32. Persons holding LP Debt are entitled to receive substantial non-public information about LightSquared and are granted access to LightSquared’s officers and employees for information regarding LightSquared’s ongoing business and operations. Prior to initial funding, LightSq-uared provided to the Lenders, among other things, multiple years of financial statements, plus current forecasts of anticipated financial performance (PX0004 at HARBAP00004092-93, § 3.04); a listing of all interests in real property owned or leased by Borrower, together with representations regarding title, etc. (id. at HARBAP00004093-94, § 3.05); a listing of all copyrights, patents, and trademarks owned or licensed by Borrower, together with representations regarding same (id. at HARBAP00004094, § 3.06); and copies of all material agreements relating to the business operated by the Borrower (id. at HARBAP00004095-96, § 3.09.) Under the Credit Agreement, these disclosures must be updated regularly by the Borrower.
33. To meet this obligation, the Borrower must furnish to Lenders the type of information that would be included in annual and quarterly reports on SEC Forms 10-K and 10-Q (PX0004 at HAR-BAP00004108-9, §§ 5.01(a)-(b)), annual and quarterly budgets (id. at HAR-BAP00004110, § 5.01(h)), and “such other information regarding the operations, busi *270 ness affairs and financial condition of [Borrower, its parents and its subsidiaries] ... as ... any Lender may reasonably request, including, -without limitation, updates on the Network buildout.” (Id. at HARBAP00004110, § 6.01(3).) Each Lender also has the right to inspect and make copies of Borrower’s financial records; to inspect Borrower’s properties; and to “discuss the affairs, finances, accounts and condition of [Borrower, its parents and its affiliates] with the officers and employees thereof and advisors therefor (including independent accountants).” (Id. at HARBAP00004113-14, § 5.07(a).)
34. The Credit Agreement also provides that each Lender must “designate at least one individual to receive Private Side Communications [ie., communications containing material non-public information] on its behalf ... and identify such designee (including such designee’s contact information) on such Lender’s Administrative Questionnaire.” (PX0004 at HAR-BAP00004149, § 10.01(d).) A Lender may elect not to receive material non-public information, but must, if so electing, waive “any and all claims based on or arising out of, not having access to Private Side Communications.” (Id.)
35. SPSO did not waive its right to receive confidential information about LightSquared. To the contrary, SPSO specifically identified in the several Lender Questionnaires it provided to the Administrative Agent one or more persons to whom such information was to be delivered. (PX0198; PX0227; PX0282; PX0317; PX0362; PX0363; PX0365; PX0367; PX0411; PX0563; PX0618; PX0638; PX0658; PX0672; PX0728; PX0733; PX0849; PX0851.) Those individuals had access to information on LightSquared. (See, e.g., PX0919-922.)
36. Under the express terms of the Credit Agreement, LightSquared’s rights under the Credit Agreement cannot be waived. Section 10.02(b) explicitly requires written consent by the parties before a party may be found to have waived the terms of the Credit Agreement:
Required Consents. Subject to Sections 10.02(c) and (d), neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended, supplemented or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by Borrower and the Administrative Agent or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent, the Collateral Trustee (in the Case of any Security Document) and the Loan Party or Loan Parties that are party thereto, in each case with the written consent of the Required Lenders....
(PX0004 at HARBAP00004149-50.)
37. Section 10.04(a) of the Credit Agreement states that only those transferees permitted under the terms of the Credit Agreement receive any rights, remedies, or claims thereunder:
Nothing in this Agreement, expressed or implied, shall be construed to confer upon any person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the other Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(PX0004 at HARBAP0004153-54.)
38. Section 10.04(b) provides that “[a]ny assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this para *271 graph [relating to assignments] shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.04(d).” (PX0004 ¶ 10.04(b).)
39. Section 10.04(d) provides that LightSquared “agrees that any breach by any Lender or participant or sub-participant of the restrictions on assignment hereunder (including, without limitation, to Disqualified Companies) shall not excuse, in any respect, performance by the Borrower under the Loan Documents.” (PX0004 ¶ 10.04(d).)
40. Section 10.16 of the Credit Agreement states that “all obligations of the Loan Parties [the Borrower and Guarantors] hereunder shall be absolute and unconditional irrespective of ... any lack of validity or enforceability of any Loan Document or any other ... circumstance which might otherwise constitute a defense available to, or a discharge of, the Loan Parties.” (PX0004 ¶ 10.16.)
III. Background Regarding SPSO’s Purchases of LP Debt
A. Messrs. Ergen and Kiser Investigate Whether DISH and EchoStar Can Purchase LP Debt
41. In the fall of 2011, Mr. Ergen believed the spectrum and satellites of LightSquared might be an attractive investment opportunity for DISH and therefore began looking into acquiring LightSq-uared’s LP Debt. (Jan. 13 Tr. (Ergen) 109:3-9; Jan. 10 Tr. (Kiser) 27:12-18.)
42. Mr. Ergen asked Mr. Kiser, the Treasurer of DISH and a Vice President of Corporate Development at DISH and EchoStar, to provide him with information concerning a potential purchase by DISH of LightSquared’s LP Debt. (Jan. 10 Tr. (Kiser) 27:19-28:5, 32:25-33:11, 77:7-18; Jan. 13 Tr. (Ergen) 25:4-18, 32:15-33:14, 112:10-113:23, 129:21-130:24.) Mr. Ergen stated that, when Mr. Kiser was first asked to check whether DISH could own the LP Debt, Mr. Kiser was acting in his capacity as Treasurer of DISH. (Jan. 13 Tr. (Ergen) 112:10-113:13; PX0832 at 88-89.) Mr. Kiser testified that when he initially inquired into who could purchase the LP Debt — and until it was clear that the companies could not purchase the debt— the LightSquared investment was considered a corporate opportunity for DISH and EchoStar. (Jan. 10 Tr. (Kiser) 32:25-34:7.)
43. Indeed, at the time when Messrs. Ergen and Kiser investigated purchasing the LP Debt, their roles and responsibilities at DISH and EchoStar included identifying potential investments and acquisitions for both companies. (Jan. 10 Tr. (Kiser) 68:24-69:9; Jan. 13 Tr. (Ergen) 95:6-24.)
44. After Mr. Ergen’s initial request to determine whether DISH could purchase LP Debt, Mr. Kiser compiled information on LightSquared’s spectrum and capital structure, which he shared with Mr. Er-gen. (Jan. 10 Tr. (Kiser) 28:6-17.)
45. After providing this information to and discussing this information with Mr. Ergen, Mr. Kiser continued his examination into whether DISH and EchoStar could buy the LP Debt. (Jan. 10 Tr. (Kiser) 28:18-21.) To that end, Mr. Kiser sought and obtained Mr. Ergen’s permission to retain Sound Point to facilitate purchases of the LP Debt and asked Sound Point’s founder, Mr. Ketchum — a longtime investment banker for EchoStar who had worked with Mr. Kiser for over twenty years on EchoStar and DISH-related transactions — if DISH was permitted to purchase the LP Debt. (Jan. 15 Tr. (Ketchum) 14:19-22; PX0116 at LSQ- *272 SPCD-000000904; Jan. 13 Tr. (Ergen) 32:15-25; Jan. 10 Tr. (Kiser) 25:19-22.)
46. Mr. Ketchum acknowledged that the LightSquared transactions were the first time in twenty years of working with Mr. Kiser on behalf of DISH and EchoS-tar that he was asked to handle a personal investment for Mr. Ergen. (Jan. 15 Tr. (Ketchum) 13:22-25,14:19-22, 94:4-7.)
47. At Mr. Kiser’s request, Mr. Ket-chum reviewed the Credit Agreement and determined that neither EchoStar nor DISH was eligible to purchase the LP Debt. (Jan. 10 Tr. (Kiser) 28:18-29:9, 78:18-79:1; Jan. 13 Tr. (Ergen) 32:22-25; Jan. 15 Tr. (Ketchum) 49:23-50:19, 95:10-14.)
48. Subsequently, Mr. Kiser consulted with Sullivan and Cromwell LLP (“Sullivan & Cromwell”), outside counsel to DISH and EchoStar, to determine whether DISH could purchase the LP Debt, providing Sullivan & Cromwell with excerpts from the Credit Agreement. (Jan. 10 Tr. (Kiser) 29:10-30:3, 118:14-18, 120:2-4; Jan. 13 Tr. (Ergen) 32:15-33:5.) No counsel other than Sullivan & Cromwell, including in-house counsel for DISH, in-house counsel for EchoStar, or counsel for Mr. Ergen and SPSO, were consulted on this issue. (Jan. 13 Tr. (Ergen) 32:15-33:3, 114:17-23, 180:23-181:2, 198:17-21; Jan. 10 Tr. (Kiser) 28:18-29:19, 78:24-79:22.)
49. After reviewing the Credit Agreement and consulting with Sound Point and Sullivan & Cromwell, Mr. Kiser determined that both DISH and EchoStar were restricted from buying the LP Debt, and communicated this to Mr. Ergen. (Jan. 10 Tr. (Kiser) 29:10-15, 30:4-9, 78:24-80:3, 121:8-22.)
50. In the fall of 2011, when Mr. Kiser, Mr. Ketchum, and Sullivan & Cromwell initially determined that both DISH and EchoStar were prohibited from purchasing the LP Debt under the terms of the Credit Agreement, only EchoStar — but not DISH — was listed as a Disqualified Company on Schedule 1.01(a) of the Credit Agreement. (PX0004 at HAR-BAP00004166; PX0144; PX0151; Jan. 15 Tr. (Ketchum) 50:9-51:2.) DISH was subsequently added to the list of Disqualified Companies in May 2012. (PX0142.)
B. Messrs. Ergen and Kiser Create the Bal Harbour Entities, and Then SPSO, to Purchase LP Debt
51. After learning that DISH was prohibited under the Credit Agreement from purchasing the LP Debt, Mr. Kiser nonetheless asked Sound Point to monitor the prices and volume of the LP Debt. (Jan. 10 Tr. (Kiser) 30:4-9.)
52. In January, February, and March 2012, Mr. Ergen was seeking to acquire LP Debt for 40 cents on the dollar or less. (Jan. 10 Tr. (Kiser) 41:6-15; Jan. 13 Tr. (Ergen) 39:24-40:3; DX011; DX016; DX018; DX019; DX022; PX0021.) During that time, Mr. Kiser was monitoring the price of the debt for Mr. Ergen, but the debt was not yet trading at a price at which Mr. Ergen wanted to buy. (Jan. 10 Tr. (Kiser) 39:18-41:1, 42:24-43:15; DX011; DX016; DX018; DX019; DX022; PX0021; PX0032.)
53. On or after May 9, 2012, Messrs. Ergen, Kiser, and Ketchum were aware that the Credit Agreement prohibited competitors DISH and EchoStar from purchasing the LP Debt. In a May 9, 2012 email, Mr. Ketchum reported to Mr. Kiser that “[a]n amendment was just created whereby DISH Network Corp., DBSD, Clearwire, DirecTV, XM Satellite Radio Inc. were named as disqualified buyers.” Mr. Ketchum specifically pointed out that “Charlie is not named.” (PX0144.) The following day, Mr. Ketchum sent Mr. Kiser *273 the original list of Disqualified Companies, as well as the exact language of the amendment. (PX0151; PX0155; of. PX0190.) The copy of the amendment that Mr. Ketchum sent to Mr. Kiser included a handwritten note circling the term “Disqualified Company,” explaining that this term “includes any known subsidiary thereof.” (PX0155 at SPSO-00001608.) Mr. Ketchum understood the term “subsidiary” to include any corporate entity controlled by a designated Disqualified Company. (Jan. 15 Tr. (Ketchum) 52:18-53:16; PX0155.)
54. Mr. Kiser further inquired of Sullivan & Cromwell in 2011 whether there were other ways for DISH or EchoStar to take advantage of “the LightSquared opportunity.” (Jan. 10 Tr. (Kiser) 81:18-82:5.) Mr. Kiser discussed with Sullivan & Cromwell whether an investment vehicle could buy the LP Debt. (Jan. 10 Tr. (Kiser) 30:10-12.) Mr. Ergen testified that “[w]hen I talk to lawyers it’s ... more about, you know, how can I do this, as opposed to what the law says.” (PX0866; Jan. 13 Tr. (Ergen) 199:4-7.)
55. No evidence was submitted demonstrating any exploration of the possibility of DISH or EchoStar purchasing the LP Debt through an “affiliate,” nor any analysis of the possible corporate opportunity involved with such a structure.
56. Given the transfer restrictions in the Credit Agreement, if DISH and Ech-oStar could not buy LP Debt, then Mr. Ergen determined that he had an interest in “personally” purchasing the debt. (Jan. 10 Tr. (Kiser) 33:9-15, 77:11-18.) Accordingly, Mr. Kiser consulted with Sullivan & Cromwell to determine whether Mr. Er-gen could buy the LP Debt, after which he understood that this would not work either, because the Credit Agreement barred Mr. Ergen and all other “natural persons” from buying the LP Debt. This led him to set up an investment vehicle. (Jan. 10 Tr. (Kiser) 30:16-21, 80:4-6, 120:20-24.)
57. Mr. Kiser structured the LP Debt purchases through a special purpose vehicle (“SPV”), initially directing the creation of two companies, Bal Harbour Capital Management LLC (“Bal Harbour Capital”) and Bal Harbour Holdings, LLC (together with Bal Harbour Capital, the “Bal Harbour Entities”). (Jan. 10 Tr. (Kiser) 30:16-31:4, 87:3-8.) The Bal Harbour Entities were incorporated in December 2011. (DX046; see also Delaware Department of State, Division of Corporations website (http://corp.delaware.gov/).)
58. After the Bal Harbour Entities had been formed, Mr. Kiser realized that a Littleton, Colorado address had been used in its formation documents. Mr. Ergen resides in Littleton, which is near Engle-wood, Colorado, where DISH and EchoS-tar are headquartered. (Jan. 10 Tr. (Kiser) 32:2-14, 35:21-24; Jan. 13 Tr. (Ergen) 36:13-20.) Concerned that the Colorado address would compromise Mr. Ergen’s anonymity, Mr. Kiser directed Sound Point to create new SPVs to replace the Bal Harbour Entities. (Jan. 10 Tr. (Kiser) 32:2-14, 90:6-12, 91:12-20; Jan. 13 Tr. (Ergen) 35:24-36:6, 36:21-37:4, 49:20-50:25; PX0117.)
59. Mr. Ketchum suggested to Mr. Kiser that the new entity’s name be SP Special Opportunities, LLC — a name suggesting Sound Point ownership. (PX0165.) Following Mr. Ketchum’s suggestion, Mr. Kiser directed Sound Point to set up SPSO and SO Holdings on May 16, 2012. 8 (PX0221; PX0183; Jan. 10 Tr. (Kiser) 31:10-32:1, 91:9-11.)
*274 60. Rather than listing a Colorado address, the SO Holdings and SPSO formation documents listed a Delaware address. (PX0183 at SPSO-00000512, SPSO-00000514.) As Mr. Kiser testified, SPSO’s address was specifically chosen to deflect any possible connection between Mr. Er-gen and Sound Point’s purchases of the LP Debt. (Jan. 10 Tr. (Kiser) 32:2-14.)
61. It was important to Messrs. Ergen and Kiser that the public not know they were behind Sound Point’s purchases. (Jan. 10 Tr. (Kiser) 30:16-21, 31:20-22, 32:2-14, 90:25-91:20; Jan. 13 Tr. (Ergen) 36:13-20; PX0171; PX0183; PX0224; PX0290 at LSQ-SPCD-000006771; PX0298.)
62. SPSO’s first trade in LightSquared debt was made on April 13, 2012, at a price of 48.75 cents on the dollar. (Jan. 10 Tr. (Kiser) 35:25-36:13; Jan. 13 Tr. (Ergen) 42:16-18; PX0859.) The second trade was executed on May 3, 2012, at 59 cents on the dollar. (PX0859.)
63. On May 4, 2012, SPSO entered into a trade for a $247 million block of LP Debt, paying approximately $149 million. (PX0859.) Between April 13 and May 4, 2012 (prior to LightSquared’s Petition Date on May 14, 2012), SPSO purchased a total of approximately $287 million in face amount of LP Debt. These initial purchases were made at prices between 48.75 cents and 60.25 cents on the dollar and cost Mr. Ergen a total of approximately $172 million. (PX0859.)
64. Following SPSO’s purchase of the $247 million piece of debt, news reports speculated that Mr. Ergen was the purchaser of the debt. (Jan. 10 Tr. (Kiser) 37:5-13.) On May 7, 2012, a Reuters story on the trade mentioned that Mr. Steven Ketchum of Sound Point previously counted Mr. Ergen as one of his investment banker clients and that DISH owned wireless airwaves “similar to LightSquared.” (PX0121.) On May 9, 2012, an LCD News story carried the headline, “LightSquared TL trades north of 70 as Ergen enters the picture.” (DX045.) On May 10, 2012, a Wall Street Journal blog, “Deal Journal,” published an entry titled “Ergen Builds Cash Pile Amid LightSquared Restructuring Talks.” (DX396.) Following the publication of those articles, the price of LightSquared’s debt increased. (PX0859; DX047.)
65. Mr. Ergen testified that when he started buying LightSquared debt, he did not have an idea of how much debt SPSO would eventually buy, and he was not interested in achieving a “blocking position” in the debt. (Jan. 13 Tr. (Ergen) 43:17-44:8.)
66. Even after creating the Bal Har-bour Entities and SPSO and purchasing large quantities of LP Debt, Messrs. Er-gen and Kiser continued to check whether DISH or EchoStar could purchase the LP Debt directly. (PX0243.) On October 4, 2012, Mr. Kiser wrote to Mr. Ergen, “I still can’t get confirmation the restricted list [LightSquared] had in place that prevented the company from buying them has fallen away due to the BK.” (Id.) The same day, Mr. Ergen responded, “[i]f we can’t be sure the company can buy them, then I am interested to increase my position at the 75 level at least up to a 33% ownership level of the class.” (Id.)
67. Mr. Ergen and Mr. Kiser checked the restrictions again in order to understand whether LightSquared’s bankruptcy filing had altered any of the restrictions, such that DISH could now purchase LP Debt. (Jan. 13 Tr. (Ergen) 240:23-241:14.) Nevertheless, Mr. Ergen believed that it was not worth contacting the banks and undermining his anonymity to determine whether the transfer restriction had in fact *275 fallen away. (Jan. 13 Tr. (Ergen) 49:14-50:13.)
C. SPSO and Mr. Ketchum Did Not Reveal that Mr. Ergen Was Behind the LP Debt Purchases
68. Sound Point endeavored not to disclose SPSO’s connection to Mr. Ergen. For example, on May 2, 2012, Mr. Ket-chum advised a Sound Point employee that “EchoStar wants up to $50mm LightSquared,” and asked him to reach out to Seaport, a middleman, but directed that “we can’t tip our hand.” The employee replied, “Yeah, i haven’t indicated anything to anyone.” (PX0088.) The following day, the employee reported that he spoke with Seaport and noted that Kevin Gerlitz, another Sound Point employee, was concerned that the trade would show Bal Harbour Capital as the buyer in the documentation. The employee asked, “Will this create problems?” Mr. Ket-chum responded, “Possibly. Sh*t.” (PX0089.) Indeed, Sound Point was not even willing to disclose the identity of the buyer to Jefferies as the middleman, even if Jefferies created an ethical wall. (PX0100.)
69. A few days later, on May 5, 2012, Mr. Ketchum sent an email to Mr. Kiser describing a voicemail he received from a Wall Street Journal reporter regarding Sound Point, stating he was “obviously” not going to call the reporter back, even though he “clearly didn’t understand what Sound Point is.” (PX0119.) Mr. Ketchum further noted that the reporter “did not mention Charlie or EchoStar” in his voice-mail. (Id.) Mr. Kiser forwarded Mr. Ket-chum’s email to Mr. Ergen, explaining that Mr. Kiser had spoken to Mr. Ketchum about the issue and that “[t]here might just be a lot of people fishing all over the place based on speculation (they’re [sic] weren’t a lot of other logical buyers).” (Id.)
70. Similarly, on May 7, 2012, after receiving a press inquiry, Mr. Ketchum reached out to Mr. Kiser and asked whether they should “employ a more strenuous strategy” around denying to the press that Mr. Ergen was behind SPSO. (PX0124.) Additionally, email exchanges demonstrate Messrs. Ketchum and Kiser making light of the fact that there were rumors in the press indicating that Carlos Slim (“Slim”) was behind Sound Point’s purchases of the LP Debt, noting that Mr. Ketchum would “continue to get looks” because he’s “Carlos Slim’s main man” and that a news report suggesting it was Slim and not Er-gen was “[m]aybe [ ] right.” 9 (See PX0271; PX0216; Jan. 15 Tr. (Ketchum) 91:20-92:3.)
IV. SPSO is Solely a Front for Mr. Ergen
71. Further evidencing that Sound Point viewed SPSO as being identical to Mr. Ergen, Sound Point entered into a Trading Management Agreement with SPSO on April 15, 2012 — a month before SPSO and SO Holdings were even formed. 10 (PX0055 at LSQ-SPCD- *276 00000750; Jan. 15 Tr. (Ketchum) 18:22-25, 99:9-19; PX0221.) Mr. Ketchum could not recall another instance where he entered into a Trading Management Agreement with an entity that had not yet been formed. (Jan. 15 Tr. (Ketchum) 19:5-10; PX0049; PX0088; PX0084; PX0087; PX0088; PX0224.) Mr. Ketchum knew he was dealing with Mr. Ergen and had no doubt that Mr. Ergen had the financial wherewithal to fund the trades.
A. SPSO was Undercapitalized and Funded Solely at Mr. Ergen’s Discretion
72. SPSO is wholly owned by its one Managing Member, SO Holdings, and Mr. Ergen wholly owns and is the sole Managing Member of SO Holdings. 11 (PX0221 at LSQSPCD-000005552, 5557, 5560, 5565; Jan. 10 Tr. (Kiser) 31:15-19.)
73. SPSO — the vehicle on behalf of which most of the LP Debt trades were initiated and all of the trades closed — was formed with a de minimis amount of funding. (Jan. 10 Tr. (Kiser) 56:22-57:6; Jan. 13 Tr. (Ergen) 127:20-25; PX0529; PX0530; PX0560; PX0859.) The operating agreements for both SPSO and SO Holdings require that the Managing Member — Mr. Ergen — make an initial capital contribution of ten dollars ($10.00) for each entity. (PX0221 at LSQ-SPCD-000005553, 5558, 5561, 5566; Jan. 15 Tr. (Ketchum) 18:5-21.) Mr. Ergen testified that this initial contribution to SPSO “wasn’t very much,” (Jan. 10 Tr. (Ergen) 127:18-25), and Mr. Kiser ignored Mr. Ketchum’s recommendation, based on advice from Sound Point’s CFO, that Mr. Ergen’s other SPV, Bal Harbour Capital, be capitalized initially with $500,000. (Jan. 10 Tr. (Kiser) 87:24-88:3.)
74. Neither the SPSO operating agreement nor SO Holdings operating agreement requires additional capital contributions from Mr. Ergen as Managing Member. (PX0221 at LSQ-SPCD-000005553, 5561 (“[t]he Managing Member is entitled, but not required, to make additional contributions to the capital of the Company”).)
75. Bear Creek Asset Management LLC (“Bear Creek”) is a registered investment advisor that manages fixed-income instruments for high-net-worth individuals and corporations. (Roddy Dep. 17:8-11.) Bear Creek manages DISH’s and EchoS-tar’s corporate cash in short-term investment accounts. (Jan. 10 Tr. (Kiser) 22:1-9; Jan. 13 Tr. (Ergen) 24:14-15; Roddy Dep. 43:3-14.) Bear Creek also manages a substantial amount of Mr. Ergen’s personal assets. (Jan. 10 Tr. (Kiser) 22:9-13; Jan. 13 Tr. (Ergen) 24:11-13.)
76. Mr. Ergen was the only person who could make the decision to transfer funds from his account at Bear Creek to Bal Harbour Capital or SPSO for settlement of the LightSquared trades. (Jan. 10 Tr. (Kiser) 57:7-58:12, 87:13-19; Jan. 15 Tr. (Ketchum) 99:9-19; PX0046; PX0055; PX0116 at LSQ-SPCD-000000905 (Mr. Ergen had “full discretion over the investment decisions” in his accounts at Sound Point); Jan. 10 Tr. (Kiser) *277 24:6-9 (Mr. Ergen “makes his own decision” with respect to his investments).)
77. The initial capital contribution amounts for SPSO and SO Holdings were insufficient to buy a significant amount of LP Debt. (Jan. 15 Tr. (Ketehum) 18:8-21, 20:4-13.)
78. Although Mr. Ketehum knew that the Bal Harbour Entities and SPSO did not have sufficient funds in their accounts to cover the purchases of LP Debt prior to the closing of the trades, Mr. Ketehum did not perform a credit check with respect to SPSO and did not have an understanding of SPSO’s financial resources or wherewithal. (Jan. 15 Tr. (Ketehum) 20:18-25; PX0062; PX0066; PX0070.)
79. Sound Point nevertheless traded on behalf of Mr. Ergen’s minimally-funded entities because Mr. Ketehum understood that the entities were backstopped by Mr. Ergen. (PX0052; PX0056; PX0058; PX0059; PX0074.) For instance, on April 13, 2012, Sound Point initiated a $5 million LP Debt trade for Bal Harbour Capital, even though at that time the Bal Harbour account had not yet been funded. (PX0859; PX0066; PX0049; PX0050; PX0062; PX0070.) On April 17, 2012, Mr. Ketehum wrote to Kiser that, “[w]e need to get the Citi account open for BH Holdings and get $500,000 in the account before we do any more LightSquared trades.” (PX0066.)
80. Mr. Ketehum testified that Sound Point was “comfortable” that Mr. Ergen would pay for SPSO’s LightSquared debt purchases because “[i]t was implicit that if we executed a trade, SPSO would pay to settle the trade.” Sound Point understood that this money would come from Mr. Er-gen, and Mr. Ketehum stated that Sound Point was satisfied that the trades would be settled based on Mr. Ergen’s credit rather than SPSO’s credit. (Jan. 15 Tr. (Ketehum) 21:1-22:8, 120:13-16; Jan. 10 Tr. (Kiser) 57:7-59:5, 61:5-9, 74:11-19; DX229; PX0041; PX0052 at LSQSPCD-000005238 (documentation for Bal Harbour BNP Paribas account stated that Mr. Er-gen had “$100 million +” of liquid net worth); PX0091; PX0116 at LSQ-SPCD-00000904.)
B. SPSO Votes Against Extension of LightSquared’s Negotiations with Lenders
81. In early 2012, both Messrs. Ergen and Kiser knew that there was a strong possibility that LightSquared would file for bankruptcy. (See, e.g., PX0033 (February 20, 2012 email from Mr. Cullen to Messrs. Ergen and Kiser enclosing article on LightSquared’s default on $56 million payment to Inmarsat); PX0075 (April 27, 2012 email from Mr. Cullen to Mr. Kiser enclosing Wall Street Journal article discussing bankruptcy as an imminent possibility); PX0078 (April 30, 2012 email from Mr. Kiser to Mr. Ergen enclosing Wall Street Journal article discussing Mr. Falcone’s attempt to get a one week “extension on default”); PX0121 (May 7, 2012 email from Mr. Cullen to Messrs. Ergen and Kiser enclosing Reuters story noting LightSq-uared’s “uncertain future” and the possibility of a default); PX0163 (May 11, 2012 email from Mr. Kiser to Mr. Ergen enclosing Debtwire article suggesting LightSq-uared could file for bankruptcy).)
82. Throughout early 2012, Mr. Ket-chum kept Mr. Kiser apprised as he monitored LightSquared’s situation. (PX0031; PX0039; PX0044; PX0064; PX0074.) On May 4, 2012 — prior to LightSquared’s bankruptcy filing — SPSO was notified that, in connection with the $247 million in LP Debt that SPSO had agreed to purchase but had not yet closed on, it had the right to vote on a proposed amendment to the Credit Agreement that would give LightSquared more time to attempt to *278 reach an agreement with the LP Lenders and avoid bankruptcy. In an email on Friday, May 4, 2012, Mr. Kiser wrote to Mr. Ergen, in part, that “[t]he seller is inclined to vote to approve this one week extension of time to continue negotiations, and so if the buyer does not direct the seller to the contrary, that is how the seller will vote.” (Jan. 10 Tr. (Kiser) 111:13-112:5; PX0111.) The amendment was due several days later, on Monday, but responses were sought before the weekend if possible. (PX0097.) Mr. Er-gen replied to Mr. Kiser’s email, “I would have them vote no.” (Jan. 10 Tr. (Kiser) 113:13-15, 113:23-25; Jan. 13 Tr. (Ergen) 166:1-167:16; PX0111.) Following Mr. Ergen’s direction, Mr. Kiser directed Sound Point to vote “no” on the amendment. (Jan. 10 Tr. (Kiser) 116:18-117:21; PX0097; PX0109.) A Sound Point employee relayed these instructions to Mr. Ketchum, commenting “[n]o extension, so they want it to file bankruptcy.” Mr. Ket-chum replied, “[n]o surprise there.” (PX0096.)
83.While Mr. Ergen testified that he determined to vote “no” because he did not have the documents necessary to decide how to vote (Jan. 13 Tr. (Ergen) 166:1— 167:16, 261:13-263:8), the record reflects that the amendment documents likely could have been obtained by Sound Point, had Messrs. Ergen and/or Kiser indicated an interest in reviewing them over the weekend. When a Sound Point employee told Mr. Kiser that “I might have figured out a way to get the docs ... please stand by,” Mr. Kiser simply responded “[w]e’ll vote no.” (PX0097; PX0096.) Mr. Kiser also conceded that, before voting no, he made no effort to discuss with any of the LP Lenders why they wanted to extend the default deadline. (Jan. 10 Tr. (Kiser) 118:10-13; PX0097.) After seeing the email exchanges between Messrs. Kiser and Ketchum concerning the availability of the amendment documents, Mr. Ergen testified, “I’m disappointed that [Kiser] answered no.... That’s not the way I would have done it_” (Jan. 13 Tr. (Er-gen) 262:13-263:8.)
C. SPSO’s LP Debt Purchases
84. Mr. Ergen funded SPSO’s debt purchases from his personal account at Bear Creek. None of the money used to fund SPSO’s purchases of LightSquared debt came from DISH or EchoStar. (Jan. 13 Tr. (Ergen) 59:11-12; Jan. 10 Tr. (Kiser) 57:18-23; Rayner Dep. 23:14-24:2, 24:13-23; Olson Dep. 14:6-15:14.)
85. Mr. Robert Olson, DISH’s Chief Financial Officer (“Olson”), testified that if DISH money had been used to fund the trades, he would have known because DISH’s controller, Paul Orban, would need to approve the transactions. (Olson Dep. 14:10-15:14.)
86. Mr. Ergen’s Bear Creek account that was used to fund SPSO’s trades in LightSquared debt is titled the “Lindsey Revocable Trust” account (Jan. 10 Tr. (Kiser) 58:13-17; Roddy Dep. 17:24-18:8; DX326), and was set up in 2000 for estate planning purposes. (Jan. 13 Tr. (Ergen) 61:17-23, 62:7-8.) Mr. Ergen is its sole beneficiary and is authorized to make investments for the trust, and his wife, Can-tey Ergen, is a co-trustee. (Jan. 13 Tr. (Ergen) 61:17-23, 62:7-8, 252:18-20.) Bear Creek understood that the Lindsey Revocable Trust was a personal trust account for Mr. Ergen. (Roddy Dep. 17:24-18:8.)
87. Mr. Ergen does not have an agreement or understanding with DISH regarding SPSO’s investment in LightSquared debt, and he understands that the money he personally invested in LightSquared debt is at risk. (Jan. 13 Tr. (Ergen) 233:6-16.) Thus, if SPSO’s claim in *279 LightSquared receives an impaired recovery, Mr. Ergen bears the sole risk. (Jan. 13 Tr. (Ergen) 233:6-16.) In addition, there is no agreement pursuant to which DISH or EchoStar will share in any gains from SPSO’s investments. Mr. Olson confirmed that there are no agreements between Mr. Ergen and DISH related to Mr. Ergen’s purchases of LightSquared debt. (Olson Dep. 26:7-27:11.)
88. Between April 13, 2012 and April 26, 2013, SPSO contracted to purchase over $1 billion in face amount of LP Debt, of which it actually closed trades for $844,323,097.83 in face amount. When a trade was scheduled to close, Mr. Kiser would contact Bear Creek and tell it how much money was needed to close the trade. (Jan. 10 Tr. (Kiser) 21:23-22:13; 57:7-17.) Mr. Ergen would then authorize the wire transfer and Bear Creek would liquidate investments to fund the transfer. (Jan. 10 Tr. (Kiser) 21:23-22:13, 57:7-17.)
89. The following chart sets forth SPSO’s trades in LP Debt, including the trade and closing dates, par amount, purchase price, cost, broker, and settlement status:
Trade Date Closing Date Par Price Cost Counterparty Status
04/13/12 09/06/12 5,000,000.00 48.750 2,437,500 UBS Settled
05/03/12 07/23/12 4.545,500.00 59.00 2,681.845 Jefferies Settled
05/03/12 07/26/12 20,000,000.00 59.250 11,850,000 Seaport Settled
05/03/12 09/06/12 3,000,000.00 58.750 1,762,500 CBS Settled
05/03/12 09/06/12 2,000,000.00 58.500 1.170.000 UBS Settled
05/03/12 07/23/12 5,000,000,00 59.000 2,950,000 Jefferies Settled
05/04/12 05/31/12 247.259.046.62 60.250 148.973.576 Jefferies Settled
10/04/12 11/30/12 19.417,287.99 78.500 15,242,571 Jefferies Settled
10/23/12 02/06/13 3,000,000.00 83.750 2,512,500 UBS Settled
11/15/12 01/08/13 7.997,057.00 81.750 6,537.594 Jefferies Settled
12/12/12 6/11/13 2,000,000.00 84.000 ,680,000 Goldman Sachs Settled
03/12/13 12/13/12 7.000,000.00 86.000 6.020.000 Jefferies Settled
12/20/12 04/09/13 14,782,302.32 85.500 12,934,515 UBS Settled
12/28/12 03/13/13 15,000,000.00 88,500 13,275,'000 Jefferies Settled
01/02/13 03/07/13 20,000,000.00 89.125 17.825.000 Jefferies Settled
01/02/13 04/05/13 6,000,000.00 89.125 5,347,500 Jefferies Settled
01/03/13 03/07/13 17,999.999.97 89.250 16.065.000 Jefferies Settled
0U07/13 05/24/13 7.000.000.00 89.500 6.265.000 Jefferies Settled
01/14/13 05/24/13 9,410,420.00 91.500 8,610,534 Jefferies Settled
02/01/13 07/23/13 20.000.000,00 91.875 18.375,000 JPM Settled
03/25/13 05/24/13 88,262,536.00 93.375 84,180,394 Jefferies Settled
03/28/13 168,759,227.85 96.000 162,008,859 Jefferies Unsettled
04/01/13 6/25/13 5.500,000.00 96.000 5.280.000 Seaport Settled
04/19/13 6/14/13 122,250,172.79 96.000 117,360,166 Jefferies Settled
04/26/13 6/18/13 145.712,408.57 96.000 139.883.912 Jefferies Settled
04/26/13 6/18/13 46,186,366.57 96.00 44,338,912 Jefferies Settled
Total Purchased 1,013,082,326.30 84.45 855,567,877
Total Settled 844.323.097.83 693,559,018 Settled
Total Unsettled 168,759,227.85 Unsettled
*280 6See PX0859 at 4.)
D. Mr. Ergen’s Desire to Obtain a Blocking Position in LP Debt
90. Mr. Ergen’s strategy in acquiring LP Debt included the acquisition of a blocking position that would enable SPSO to enforce “certain rights” during the bankruptcy proceeding. (Jan. 10 Tr. (Kiser) 47:22-48:10, 56:11-14; Jan. 13 Tr. (Er-gen) 172:10-174:2; DX047.)
91. Mr. Ergen understood that creditors could be treated differently as a result of his investments in Loral, which went through a bankruptcy process. Mr. Ergen ended up with equity while other investors ended up with cash. (Jan. 13 Tr. (Ergen) 52:6-11.) Based on that experience, Mr. Ergen believed that 33 percent was a “meaningful percentage in bankruptcy,” and that with that percentage, he “couldn’t get jammed with a different kind of currency than somebody else in that class might get.” 12 (Jan. 13 Tr. (Ergen) 51:12-18, 172:25-173:3.) Mr. Ergen had a sizea-ble enough position in LightSquared to protect that he decided to acquire a blocking position; he stated that he “knew there were ways that [he] might be able to protect [his] investment if [he] got a third that [he] wouldn’t have if [he had] half of that.” (Jan. 13 Tr. (Ergen) 51:12-24.)
92. At Mr. Ergen’s direction, Mr. Kiser (through Sound Point) regularly monitored how close SPSO was to reaching a blocking position and kept a close eye on developments in the bankruptcy itself. (See PX0244; PX0264; PX0276; PX0288; PX0289; PX0375; PX0379; PX0306; Jan. 15 Tr. (Ketchum) 102:7-12; see also PX0064; PX0096; PX0413; PX0239; PX0344; PX0262.) 13
93. After Mr. Ergen decided to acquire a 33 percent stake in the LP Debt, Mr. Kiser asked Mr. Ketchum to track whether SPSO had a blocking position and to supply Mr. Kiser with the information about the calculation of a blocking position. (Jan. 15 Tr. (Ketchum) 102:7-16; 25:11-26:18, 48:19-25, 102:7-12, 104:16-21; PX0244; PX0144.) Notwithstanding such request, Mr. Kiser did not share SPSO’s investment strategy with Mr. Ketchum. (Jan. 15 Tr. (Ketchum) 102:7-16.)
94. On March 28, 2013 — the date on which Messrs. Ergen and Kiser believed they had achieved their goal of obtaining a blocking position — Mr. Ketchum sent an email to Mr. Kiser, stating “You just bought a spectrum company.” Later in that same email chain, Mr. Ketchum observed to one of his colleagues that “we now control the company.” (PX0385.)
V. Mr. Ergen Acted, at Least in Part, for the Benefit of DISH in Acquiring LP Debt Through SPSO
95. In the course of amassing a substantial position in LP Debt, Mr. Ergen used DISH’s employees, resources, facilities, and counsel. Members of the DISH and EchoStar boards and DISH’s management also were made aware of Mr. Er-gen’s purchases; there was no evidence presented reflecting any action or investigation by the DISH Board with respect to SPSO’s LP Debt trades.
*281 96. It is within the scope of Mr. Er-gen’s broad authority to lead strategic acquisitions of spectrum assets for DISH and EchoStar. (Jan. 10 Tr. (Kiser) 69:3-6, 69:23-70:9; Jan. 13 Tr. (Ergen) 95:6-16, 96:15-24; Howard Dep. 33:25-34:12; see also PX0010.) Mr. Ergen, as the Chairman of the Boards of DISH and EchoStar, is an officer and a full-time, salaried employee of DISH and EchoStar. (Jan. 13 Tr. (Ergen) 11:13-14, 94:4-18, 94:8-18; PX0349 at 20, 31; PX0350 at 17, 34.) In that capacity, Mr. Ergen “foeus[es] on [the] strategic direction of the company” which includes acquisitions and strategic investments. (Jan. 13 Tr. (Ergen) 95:6-16; Jan. 10 Tr. (Kiser) 69:3-9; Howard Dep. 33:25-34:11; see also PX0010.) His responsibilities include the strategic pursuit of spectrum assets, which Mr. Ergen sees as necessary to compete with the large wireless carriers, to further DISH’s strategic goal of diversifying away from its core Pay-TV business. (Jan. 10 Tr. (Kiser) 70:10-19; Jan. 13 Tr. (Ergen) 96:15-24, 100:25-101:4; Howard Dep. 30:15-31:13, 33:10-35:13; PX349 at ii.)
97. Mr. Ergen’s role in managing the strategic direction of DISH and EchoStar includes the companies’ attempts to acquire, or merge with, numerous spectrum-owning companies. (Jan. 13 Tr. (Ergen) 101:5-103:5.) Mr. Ergen is “responsible for what DISH does in connection with the LightSquared bankruptcy” and he “leads bids of this nature” as part of his responsibilities for DISH. (PX0767 (Goodbarn Nevada Dep.) at 186:25-96, 232:12-17.)
98. Mr. Kiser testified that Mr. Ergen “typically” is involved in strategic investments, and Mr. Kiser could not point to a single strategic investment made by DISH and EchoStar that Mr. Ergen had opposed. (Jan. 10 Tr. (Kiser) 69:23-70:9.) Further, Mr. Ergen, who achieves board consensus before bringing issues to vote, has not voted against a single board resolution in the past five years. (Jan. 13 Tr. (Ergen) 236:3-8.)
99. DISH has two policies governing investments made on behalf of the company. (Jan. 10 Tr. (Kiser) 23:10-11.) One policy governs the company’s cash management projects and outlines how Bear Creek may invest the company’s money. (Jan. 10 Tr. (Kiser) 23:11-21.) The second policy governs the company’s strategic investments and states that “[a]ny investment not otherwise permitted by the Corporation’s cash management policy shall not exceed $125 million in any single transaction or series of related transactions without approval of the Board of Directors; and investments not otherwise permitted by the Corporation’s cash management policy shall not exceed $200 million in aggregate in any calendar quarter without approval of the Board of Directors.” (DX331; Jan. 10 Tr. (Kiser) 23:10-24:5; Olson Dep. 12:15-23, 20:7-23.)
A. Mr. Kiser’s Role in SPSO’s LP Debt Purchases
100. Mr. Kiser has been employed by DISH and its predecessor companies for 27 years. (Jan. 10 Tr. (Kiser) 14:4-9, 15:25-16:1, 69:10-22; Jan. 13 Tr. (Ergen) 21:12-14.) As DISH’s Treasurer, he focuses on corporate development, including capital-raising, investor relations, strategic acquisitions and investments, and the purchase of marketable securities. (Jan. 10 Tr. (Kiser) 16:2-6, 108:16-20, 140:6-18; Jan. 17 Tr. (Cullen) 139:18-140:5.) Mr. Kiser also performs corporate development services for EchoStar pursuant to a management services agreement between DISH and EchoStar. (Jan. 10 Tr. (Kiser) 69:10-22.)
101. As Treasurer of DISH, Mr. Kiser reports directly to Mr. Ergen. Under DISH’s bylaws, Mr. Kiser must “perform *282 all duties commonly incident to his office and such other duties as may, from time to time, be assigned to him by ... the Chairman of the Board of Directors.” (PX0821 at § 5.2(f).) Accordingly, Mr. Kiser receives authorization from Mr. Ergen in making strategic investments for DISH’s portfolio. (Jan. 10 Tr. (Kiser) 69:3-9.)
102. In the course of his duties, Mr. Kiser likewise has been involved in numerous proposed or actual transactions on behalf of DISH or EchoStar, including transactions involving Clearwire, Sprint, Blockbuster Inc., DBSD, and TerreStar. (Jan. 17 Tr. (Cullen) 139:16-140:9; Kiser Dep. 117:23-118:6, 173:18-21.) Mr. Ergen testified that “Kiser, in his role at DISH over the years, had been involved in a number of transactions and was familiar with looking at capital structures and interpreting those capital structures and determining things such as who could buy debt or if — and if there were any restrictions.” (Jan. 13 Tr. (Ergen) 162:9-16.)
103. The scope of Mr. Kiser’s employment and authority extends to transacting and monitoring trades on behalf of DISH, including purchases of other companies’ debt and interacting with Bear Creek. (Jan. 10 Tr. (Kiser) 21:23-22:18.)
104. For example, when DISH made a decision sometime in early 2012 to make a strategic investment in LodgeNet, a company that provides pay-per-view movie services to hotel rooms, Mr. Ergen authorized Mr. Kiser to acquire LodgeNet debt on behalf of DISH, and Mr. Kiser — without authorization from the DISH Board— worked with Sound Point to execute the trades. (Jan. 13 Tr. (Ergen) 128:12-129:20; Jan. 15 Tr. (Ketchum) 14:11-18.) Similarly, when DISH acquired DBSD, Mr. Kiser checked for restrictions on competitors purchasing debt and then executed the trades of distressed debt. (Jan. 10 Tr. (Kiser) 106:21-107:16,108:8-15.)
105. Mr. Kiser acted on direction from Mr. Ergen when he purchased the LP Debt, interacted with Bear Creek, and oversaw and monitored the LP Debt trades — precisely the same functions Mr. Kiser performs for DISH and EchoStar. (See, e.g., Jan. 10 Tr. (Kiser) 84:13-22, 86:18-87:23; PX0031; PX0037; PX0064; PX0068; PX0078; PX0096; PX0136; PX0239; PX0344; PX0422; PX0295; PX0331; PX0390.)
106. Even after Mr. Ergen began purchasing the LP Debt, there were times when it was unclear to Mr. Kiser whether he was working for Mr. Ergen personally or for DISH. When he investigated whether the restrictions on DISH purchases had fallen away in the bankruptcy, he “asked a question for the company ... I think I’ve also got an obligation to the company just as he does. I’m a fiduciary for the company.” (Jan. 10 Tr. (Kiser) 83:19-84:24.) Further illustrating these overlapping and conflicting roles, Mr. Kiser testified that “I think I took one hat off and put the other hat on.” (Jan. 10 Tr. (Kiser) 84:23-24.)
B. Mr. Ergen Uses DISH Employees, Resources, and Legal Counsel to Facilitate the LP Debt Purchases
107. Prior to and throughout the period in which Messrs. Ergen and Kiser were amassing LP Debt, other DISH employees, including Mr. Cullen — another member of DISH’s corporate development group — closely monitored news relating to LightSquared and reported on those events to Messrs. Ergen and Kiser. (PX0018; PX0033; PX0075; PX0187; PX0223; PX0195; PX0393; PX0407; PX0408; PX0438.)
108. Mr. Kiser transacted business on *283 behalf of SPSO from his DISH office, 14 using DISH’s computers, phone lines, and email and outside investment bankers during general business hours. 15 (Jan. 10 Tr. (Kiser) 42:4-8; PX0042.) Although the purchases were purportedly done on Mr. Ergen’s behalf, Kiser received no compensation apart from his salary at DISH for directing nearly $1 billion in LP Debt trades. Compensation was allegedly unnecessary because Kiser (a 27-year veteran of DISH/EchoStar) performed the trades “for the experience” and because, as Mr. Ergen testified, “he gets to spend time with me and I think he likes that.” (Jan. 10 Tr. (Kiser) 26:13-19, 74:25-75:7; Jan. 13 Tr. (Ergen) 23:15-24:1, 133:7-10.)
109. Mr. Ergen has a family office, a personal asset manager (Bear Creek), and stock brokers that he uses regularly. (Jan. 13 Tr. (Ergen) 23:3-4, 26:15-17, 126:15-21, 127:2-3; Jan. 10 Tr. (Kiser) 21:6-12.) He has also made personal investments through a hedge fund, GSO. (Jan. 13 Tr. (Ergen) 126:22-127:3.) Yet, Mr. Ergen used DISH employees and facilities to acquire the LP Debt. (Jan. 13 Tr. (Ergen) 127:4-13.)
110. Mr. Kiser consulted DISH’s outside counsel at Sullivan & Cromwell (whom Mr. Ergen never retained as personal counsel) to determine initially whether DISH and, later, Mr. Ergen, was prohibited from purchasing the LP Debt. (Jan. 10 Tr. (Kiser) 29:10-30:9, 33:9-34:7, 77:11-18, 80:4-6, 119:16-120:4, 120:11-24; PX0144.) Mr. Ergen relied on this advice for months, and did not retain personal counsel until the spring of 2013, after SPSO gained its blocking position. (Jan. 13 Tr. (Ergen) 67:1-11.)
C. DISH Board Members and Management Take No Action Upon Learning of Mr. Ergen’s LP Debt Acquisition
111. In May 2012, news reports began speculating that Mr. Ergen was behind Sound Point’s purchases of LP Debt. (PX0121; PX0898.) Mr. Ergen testified that no DISH or EchoStar Board member asked him about his purchases prior to his May 2, 2013 presentation to the DISH Board. (Jan. 13 Tr. (Ergen) 119:20-120:3; Jan. 10 Tr. (Kiser) 37:10-24.) In response to questioning from the Court, Mr. Ergen testified that once he learned that he could purchase the LP Debt personally, he did not apprise the DISH Board, its general counsel, or Mr. Cullen that he was acquiring the LP Debt because he did not believe that he had a fiduciary obligation to do so once he confirmed it was not a corporate opportunity for DISH or EchoStar. (Jan. 13 Tr. (Ergen) 37:17-38:9.)
112. On May 10, 2012, The Denver Post reported that Charlie Ergen “has snatched up $350 million worth of debt in LightSq-uared.” (PX0898.) A DISH spokesman declined to comment on the article. After reading the Denver Post article, DISH board member Gary Howard sent an email that same day to Stanton Dodge, DISH’s General Counsel {“Dodge”), Tom Ortolf, a member of the Boards of Directors of DISH and EchoStar, and Mr. Goodbarn, a member of the Board of Directors of DISH, asking if the article was accurate. (DX397.)
113. In response to Mr. Howard’s email, Mr. Dodge sent an email on May 16, 2012 to the entire DISH Board, including *284 Mr. Ergen and DISH’s associate counsel, Brandon Ehrhart, stating:
further to [GJary’s email below and since another board member inquired about the recent press reports regarding LightSquared bonds, [I] wanted to send a brief note to the full board. [T]he company did not buy any LightSquared bonds.
(DX397.) What follows in the email is redacted.
114. Mr. Dodge’s email did not answer the Board members’ pointed question whether Ergen was buying the LP Debt. When Mr. Dodge asked Mr. Ergen about the news report, Mr. Ergen responded that there “might be some truth” to the report. (Jan. 13 Tr. (Ergen) 116:3-22, 118:23-119:19.) There is no evidence in the record that (i) Mr. Dodge made further inquiry or (ii) Mr. Ergen ever told Mr. Dodge that, in the fall of 2011, Mr. Kiser had investigated whether DISH could purchase LP Debt and had consulted on that topic with Sullivan & Crowmwell. There is also no evidence that Mr. Dodge, who has fiduciary obligations to DISH, informed the DISH Board whether a corporate opportunity was implicated by Mr. Ergen’s LP Debt purchases.
115. Shortly thereafter, on July 23, 2012, Mr. Ehrhart attended a call with DISH’s outside counsel, Scott Miller, of Sullivan & Cromwell, to discuss “LightSq-uared debt.” (PX0892.) Mr. Miller previously handled DISH’s mergers and acquisition work, including with respect to Sling Media, Sirius, and TerreStar. (PX0918.)
116. Carl Vogel, a DISH Board member, asked Mr. Kiser, as well as others, if the news reports about Mr. Ergen’s purchases were true. Mr. Kiser testified that he never responded to Mr. Vogel’s email because Mr. Vogel’s question was addressed to multiple people and because “it was Charlie’s personal business.” (Jan. 10 Tr. (Kiser) 37:16-38:9.) When Mr. Vogel received an email on August 9, 2012 from Jim Millstein, of Millstein & Co., L.P., a restructuring firm, inquiring whether DISH was purchasing LightSquared’s debt, he did not deny DISH’s involvement. Rather, he forwarded the email to Mr. Cullen and advised Mr. Millstein to “contact Tom Cullen or Charlie to discuss.” (PX0232.) Similarly, Mr. Ehrhart received an email from Brendan O’Neill of Canadian law firm Goodmans LLP, stating, “[n]ot sure if DISH is involved at all from the press, but thought I might just reach out in case any assistance was required from us.” Like Mr. Vogel, Mr. Ehrhart did not deny DISH’s involvement, only replying “[h]ope you are well too Brendan.” (PX0420.)
117. In April 2013, DISH spokesman Bob Toevs (“Toevs”), head of Corporate Communications, also sent several emails to Mr. Ergen and several senior officers, including Messrs. Cullen, Dodge, Clayton, and Jeff Blum (a Senior Vice President and Deputy General Counsel), about a news article discussing DISH amassing LightSquared debt through Sound Point, and noting that Mr. Toevs “has not commented.” (PX0393; PX0407; PX0408.) Mr. Toevs’ April 2, 2013 email referred to past coverage on the very same issue and had links to news stories dating back to May 2012. (PX0393; PX0408.) None of these top DISH executives responded to the e-mail to inquire whether Mr. Ergen in fact was buying the LP Debt, and Mr. Ergen testified that, apart from Messrs. Kiser, Cullen, and Dodge, he did not speak to anyone regarding his LP Debt purchases until the May 2, 2013 board presentation. (Jan. 13 Tr. (Ergen) 116:3-22, 119:20-24.)
118. Mr. Cullen, a Federal Rule of Civil Procedure 30(b)(6) representative for DISH, testified that Mr. Kiser was the *285 only person at DISH who knew about Mr. Ergen’s LP Debt purchases prior to May 2013. (Jan. 17 Tr. (Cullen) 121:21-122:9.) Mr. Cullen testified that he reached this conclusion without speaking to any DISH board members or senior management, other than Mr. Olson, DISH’s Chief Financial Officer, and Mr. Kiser. (M:12-123:4.)
119. Mr. Cullen works closely with Mr. Ergen in the corporate development group, is considered to be “Ergen’s closest confidante on all things wireless,” and leads DISH’s strategic acquisitions. (PX0890 (May 3, 2013 Reuters article.)) When news stories surfaced in the second quarter of 2012 about Mr. Ergen buying LightSquared debt and Mr. Cullen asked Mr. Ergen about these reports, Mr. Ergen confirmed to Mr. Cullen that there either “is” or “might be” “some truth” to the reports and said nothing else. (Jan. 17 Tr. (Cullen) 117:8-18; Jan. 13 Tr. (Ergen) 116:3-22.)
120. Mr. Cullen acknowledged that he, Mr. Ergen, and Mr. Kiser discussed LightSquared, among other several other “MSS 16 players,” “continuously,” throughout 2012. (Jan. 17 Tr. (Cullen) 134:9-18.) While Mr. Cullen testified that he did not know that Mr. Kiser was assisting Mr. Ergen with his LP Debt acquisitions, he confirmed that he repeatedly sent emails to Messrs. Ergen and Kiser about LightSquared during the period in which the purchases were made. (Jan. 17 Tr. (Cullen) 110:22-111:7, 112:2-13, 119:12-120:12, 133:7-134:8; PX0075; PX0195; PX0223; PX0393.) Although Mr. Cullen testified that it was routine practice for him to send updates about MSS companies to the corporate development group, he generally did not include any of the other group members on the emails concerning LightSquared. (Jan. 17 Tr. (Cullen) 134:4^135:8; PX0075; PX0195; PX0393; PX0438.) In fact, when Mr. Toevs forwarded an article regarding an inquiry from The Wall Street Journal regarding the Sound Point purchases to Mr. Cullen, Mr. Cullen forwarded that email only to Mr. Kiser. (PX0393.)
121. Mr. Cullen acknowledged that, as an executive, he owed fiduciary obligations to DISH. Nevertheless, he testified that when he learned that Mr. Ergen was buying the LP Debt: (i) he did not ask Mr. Ergen why DISH was not buying the debt, (ii) he did not ask in-house counsel whether there was an issue with Mr. Ergen making a personal investment in the debt, and (iii) he did not take any steps to determine whether Mr. Ergen’s purchases were a corporate opportunity. (Jan. 17 Tr. (Cullen) 143:1-20.)
122. Further, when Mr. Cullen learned through news reports in May 2013 that Mr. Ergen’s entity, LBAC, made a bid for LightSquared’s spectrum assets (see ¶¶ 13 6-3 8, infra) he did not ask Mr. Ergen if he was usurping a corporate opportunity. (Jan. 17 Tr. (Cullen) 143:25-145:16.) Indeed, Mr. Cullen, who typically is involved in DISH’s acquisition process, stated that he did not know for over two months that LBAC’s bid had been presented to DISH on May 2, 2013 as an opportunity. (Jan. 17 Tr. (Cullen) 144:3-146:19; PX0890.)
D. Mr. Ergen Controls the Boards of DISH and EchoStar
123. Mr. Ergen, as the holder of a majority share of voting rights (approximately 88 percent and 79.4 percent of the total voting power in DISH and EchoStar, respectively), has the ability to elect a majority of the directors for the companies and control all other matters requiring the approval of their stockholders.
*286 124. When asked if “[i]t was [his] view that nobody else could act in an independent way of Charlie,” DISH’s independent director, Mr. Goodbarn, responded, “[t]hat is correct.” (PX0767 (Goodbarn Nevada Dep.) at 233:25-234:3.)
125. DISH and EchoStar, in public filings, state that their “future success will depend to a significant extent upon the performance of Charles W. Ergen,” the loss of whom “could have a material adverse effect [on the companies’] business, financial condition and results of operation,” and “place substantial weight on Mr. Ergen’s recommendations in light of his role as Chairman and as co-founder and controlling shareholder of DISH Network.” (PX0349 at 32; PX0350 at 27; PX0372 at 24; PX0371 at 21.)
E. Soon After Acquiring a Blocking Position, Mr. Ergen Makes a Presentation to the DISH Board that Contemplates a DISH Bid
126. As noted, by March 28, 2013, Mr. Ergen achieved a blocking position, having contracted to purchase $168 million in LP Debt on that date. 17 (Jan. 13 Tr. (Ergen) 174:20-178:3; PX0379; PX0859.)
127. Mr. Ergen testified that, in April 2013, he began to contemplate making a “personal” acquisition of LightSquared because of changes in the wireless industry and at the FCC. (Jan. 13 Tr. (Ergen) 65:4-9; Jan. 10 Tr. (Kiser) 65:12-16.) At that time, the wireless industry was going through a “seismic shift,” including the consolidation of several companies and an increasing transmission of data. (Jan. 13 Tr. (Ergen) 65:10-19.) As Mr. Kiser explained,
[T]here were a lot of pieces in the wireless industry that were moving around; a lot of the industry was consolidating at a pace that’s probably unlike any other. So, you know, the company had been in discussions, and we’re still in discussions with other wireless companies, companies that had spectrum and were complimentary to the portfolio assets that DISH had. And as the pieces on the chessboard were starting to move and avenues were — people were getting lined up, companies like MetroPCS had been acquired, you know, Sprint and ClearWire were on the block, and, you know, DISH was making attempts to purchase them, I think as Charlie saw those pieces start to move, it started to look more interesting to potentially own the asset.
(Jan. 10 Tr. (Kiser) 65:17-66:8.)
128.Mr. Ergen also testified that he believed in April 2013 that if he wanted to make a bid for LightSquared, he would have to do so by July 15, 2013 — the date on which the Debtors’ exclusive periods would terminate pursuant to the Exclusivity Stipulation. 18 (Jan. 13 Tr. (Ergen) *287 66:9-15.) Given the risk that a consensual plan of reorganization might be negotiated before exclusivity expired, Mr. Ergen understood that he had to act quickly if he wanted to try to acquire LightSquared’s assets and provide “the opportunity for DISH and EchoStar to participate if they chose to do so.” (Jan. 13 Tr. (Ergen) 66:9-15; 67:5-11; 77:8-20.)
129. Once he became interested in LightSquared as an acquisition target, Mr. Ergen asked Mr. Kiser to retain bankruptcy counsel. (Jan. 13 Tr. (Ergen) 67:1-11; Jan. 10 Tr. (Kiser) 66:9-19.) In April 2013, Mr. Ergen hired Willkie Farr & Gallagher LLP (“Willkie Farr”), who had represented DISH in the TerreStar bankruptcy, to serve as his bankruptcy counsel. (Jan. 13 Tr. (Ergen) 180:23-181:10.)
130. By early May 2013, Mr. Ergen had concluded that he was interested in a potential acquisition of LightSquared. (Jan. 13 Tr. (Ergen) 77:3-78:2.) At that time, DISH was consumed with a potential acquisition of Sprint, and if DISH acquired Sprint, DISH would not have enough capital to acquire LightSquared also. (Jan. 13 Tr. (Ergen) 67:21-68:2; PX0767 (Goodbarn Nevada Dep.) 32:11-23.) DISH also was considering a potential acquisition of Cle-arwire at that time. (PX0767 (Goodbarn Nevada Dep.) 30:15-25; Jan. 13 Tr. (Er-gen) 20:17-21.)
131. On May 1 and 2, 2013 — -just over a month after obtaining a blocking position — Mr. Ergen made presentations to the Boards of EchoStar and DISH, respectively, informing them about his acquisition of LightSquared debt and his proposal for DISH and/or EchoStar to acquire LightSquared’s assets for $2 to $2.1 billion (the “Ergen Presentation”). (PX0867; PX0767 (Goodbarn Nevada Dep.) at 21:1-18; Howard Dep. 55:3-15, 56:24-57:13, 87:11-88:3, 141:13-20; Jan. 13 Tr. (Ergen) 77:3-7, 77:21-78:2, 78:17-79:9, 80:11-13; PX0480; PX0492.)
132. The Ergen Presentation informed the Boards that Mr. Ergen’s blocking position in the LP Debt could help facilitate any bid for LightSquared’s assets:
[Ergen’s] substantial interests in L2 debt and preferred stock compliment [sic] any acquisition strategy and could have significant influence in L2’s chapter 11 cases.
(PX0867; Jan. 13 Tr. (Ergen) 182:11— 183:11.)
133. The Ergen Presentation proposed a course of action, stating: “[s]ubmit offer now, subject to minimal conditions, and require prompt acceptance (e.g., by May 15) before marketing process gets underway.” (PX0867 at SPSO-OOOH828.) If, however, LightSquared did not accept the proposal, the presentation continued: “NewCo will have the ability to see results of marketing process and, if process is unsuccessful, revert with different bid later.” The Ergen Presentation also described the chapter 11 timing considerations: “L2 has the exclusive right to file a chapter 11 plan until July 15. L2 likely to begin exploring strategic alternatives in early June if no restructuring or sale strategy emerges.” (PX0867 at SPSO-00011828.) The presentation contained an “Illustrative Transaction Timeline” that outlined a schedule of events related to a potential transaction, including the execu *288 tion of a purchase agreement by May 31, 2013. (PX867.)
134. At the time of the Ergen Presentation, Mr. Ergen understood that the DISH Board 19 had not performed any analysis of LightSquared. (Jan. 13 Tr. (Ergen) 207:15-17.) 20 Mr. Ergen understood that the DISH Board had not authorized a DISH bid in May 2013, and it had not passed a resolution authorizing him to make a bid personally. (Jan. 13 Tr. (Ergen) 208:4-13.)
VI. DISH Contemplates and Makes a Bid for LightSquared at Mr. Er-gen’s Behest
A. DISH Forms a Special Committee to Evaluate a DISH Bid and the Propriety of Mr. Ergen’s LP Debt Purchases
135. Shortly after Mr. Ergen made his May 2, 2013 presentation to the DISH Board regarding a potential acquisition of LightSquared’s assets, on May 8, 2013, the Board formed a special committee consisting of directors independent of Mr. Er-gen — Messrs. Goodbarn and Howard — to examine the propriety of Mr. Ergen’s purchases of the LP Debt and the prospect of a DISH bid for LightSquared’s assets. Pursuant to resolutions recorded in the May 8, 2013 minutes of the DISH Board, the Special Committee was vested with the power and authority to: (i) review and evaluate a potential bid (including any potential conflicts of interest) and engage in discussions and/or negotiations; (ii) negotiate definitive agreements with the parties concerning the terms and conditions of the potential bid; and (iii) determine whether such terms and conditions are fair to DISH. (PX0768 (Howard Nevada Affidavit) ¶¶ 8-10; PX0491 at DISH-NY000000002-4.) The Board formally resolved that the Special Committee’s authority would expire only upon the Special Committee’s “determination, in its sole and absolute discretion, as set forth in its written notice to the Chairman of the Board of Directors” as long as a bid for LightSquared remained viable. (PX0491 at DISH_NY0000000005.)
B. Mr. Ergen Makes a “Personal” Bid That Sets the Floor and Ensures He Will Be Repaid in Full
136.Without consulting the newly-formed Special Committee, on May 15, 2013, Mr. Ergen submitted an unsolicited bid for LightSquared LP’s spectrum assets for $2 billion (the “LBAC Bid”). (PX0768 (Howard Nevada Affidavit) ¶ 14; PX0504; PX0513; Jan. 13 Tr. (Ergen) 80:11-19.) LBAC did not exist at the time the offer was made and was not formed until two weeks later, on May 28, 2013. (PX0837-838; Jan. 13 Tr. (Ergen) 191:8-192:25.) 21
*289 137. The LBAC Bid expressly stated the buyer of the LightSquared assets would be “owned by one or more of Charles Ergen, affiliated companies and/or other third parties.” (PX0504 at GH_L2_00450.) As detailed in the Ergen Presentation, Mr. Ergen priced the bid at $2 billion, approximately the total amount of the outstanding LP Debt, in what he characterized as an effort to induce serious consideration by LightSquared’s LP Debt creditors. (PX0504; PX0867.)
138. A key feature of the LBAC Bid, which was non-binding and expired on May 31, 2013, was LBAC’s apparent “willingness to fund the Purchase Prices, on a non-refundable basis,” prior to receipt of FCC and Industry Canada approvals and authorizations. (Jan. 13 Tr. (Ergen) 80:20-81:7; PX0504.) The $2 billion bid would have enabled Mr. Ergen to be paid in full on his LP Debt investment and receive $140 million in profit as well as “significant” interest. (Jan. 13 Tr. (Ergen) 132:20-133:6,134:6-15, 233:20-234:7.)
139. When asked what would have happened if the DISH Board had wished to offer a lower price than Mr. Ergen’s, Mr. Ergen stated that “[a]ll they needed to say was, Charlie, don’t do it.” (Jan. 13 Tr. (Ergen) 207:18-20.)
140. Mr. Ergen’s testimony that he was prepared to proceed with the LBAC Bid as a “personal investment” was not credible. (Jan. 13 Tr. (Ergen) 245:17-247:9.) At the time of the LBAC Bid, Mr. Ergen did not have any financing agreements lined up with investors and had not even received a term sheet related to a possible financing of the “acquisition.” He did not receive as much as a draft term sheet until July 18, 2013 — two months after his bid would have expired. (Jan. 13 Tr. (Ergen) 185:20-186:7, 193:15-25, 195:23-196:13; DX285.) Even then, under the term sheet, Mr. Ergen would have had to provide over a billion dollars in cash. (Jan. 13 Tr. (Ergen) 87:3-88:20.) To obtain that amount of cash, Mr. Ergen testified that he would have used $300-$500 million of his personal liquid cash and borrowed the rest against his EchoStar stock. (Jan. 13 Tr. (Ergen) 88:21-89:1.)
C. The DISH Special Committee
141.On or about May 17, 2013, the Special Committee set out to engage independent counsel and independent financial advisors, as authorized by the resolutions of the DISH Board. (PX0910; PX0534; PX0491 at DISHJSÍY000000004; PX0768 (Howard Nevada Affidavit) ¶ 11.) When Mr. Ergen learned that the Special Committee wished to engage counsel, he was opposed to the idea, emailing “[w]hy would we have special committee counsel. You are way ahead of your skis here.” (DX188.) As a result, the Special Committee, following Mr. Ergen’s direction, delayed the engagement of independent advisors. (PX0768 (Howard Nevada Affidavit) ¶¶22, 25, 26.) At a May 31, 2013 meeting, Mr. Ergen suggested that the Special Committee should delay engaging its financial advisor, as, in Mr. Ergen’s view, there would “be little activity, if any, in the coming weeks” regarding a LightSquared transaction. (PX0768 (Howard Nevada Affidavit) ¶ 25.) Perella Weinberg (“PWP”), the financial advisor to the Special Committee, was ultimately retained on June 28, 2013, after the Sprint and Clearwire deals had failed to proceed. {See DX0224 (email from Gary Howard to DISH Board); PX0768 (Howard Nevada Affidavit) ¶ 33.) 22
*290 142. After delaying the retention of its professionals and keeping the committee in what Mr. Howard later described as a “holding pattern,” Mr. Ergen suddenly reversed course in early July, urging the Special Committee to complete its evaluation quickly and make a recommendation to the DISH Board. (PX0768 at ¶ 34.)
143. According to its members, the Special Committee did not have documents detailing Mr. Ergen’s ownership of LightSquared debt and preferred stock other than what Mr. Ergen presented to the Board in May. (Howard Dep. 76:8-15.) Following that meeting, the Special Committee requested that Mr. Ergen provide the Committee with information regarding SPSO’s trades. (PX0767 (Goodbarn Nevada Dep.) 92:23-93:1; Jan. 13 Tr. (Ergen) 82.T8-83.T3.) The Special Committee made repeated requests for such information from Mr. Ergen.
144. On June 2, 2013, the Special Committee again requested information regarding further details of the bank debt and preferred stock purchases Mr. Ergen made through SPSO. (DX213; Howard Dep. 143:15-144:24.) As of June 5, 2013, the Committee still had not received the schedule of Mr. Ergen’s trades. (DX219; PX0767 (Goodbarn Nevada Dep.) 128:25-129:12.)
145. The June 17, 2013 meeting minutes make it clear that the Special Committee was still looking for information relating to Mr. Ergen’s trades: “The Committee discussed the need for additional information from Mr. Ergen regarding his acquisition of LightSquared debt and/or preferred stock, as well as regarding the rationale and business case for an acquisition by the Corporation of LightSquared’s L-Band Mobile Satellite Service Spectrum.” (DX238.)
146. Following the June 17 meeting, the Special Committee sent Mr. Ergen a letter requesting information regarding his trades in LightSquared debt. (DX244; DX238; Jan. 13 Tr. (Ergen) 83:14-85:8.) The letter stated that “[w]e would also appreciate further detail regarding your relationship with Sound Point Capital Management and its affiliate SP Special Opportunities, LLC ... as it relates to the LightSquared opportunity and your acquisition, whether directly or indirectly, of any interests in any claims, loan obligations or preferred equity securities of LightSquared.” (DX244 at GH_L2_000111.)
147. On July 6, 2013, Mr. Howard informed the DISH Board that the Special Committee had “no further insight into the bond purchases made by Charlie’s entity.” (DX224; Goodbarn Nevada Dep. 165:3-10, 165:16-21.) As of July 21, 2013, the Special Committee still had not received the information it requested regarding Mr. Ergen’s trades in LightSquared debt. (PX0767 (Goodbarn Nevada Dep.) 208:5-12.)
148. Mr. Howard testified that the Special Committee was interested in determining whether there was a way that DISH could have bought LP Debt notwithstanding the transfer restrictions. (Howard Dep. 204:14-205:15.) Mr. Ergen never provided the Special Committee with the requested information on his trades. (PX0767 (Goodbarn Nevada Dep.) at 92:10-93:15, 128:16-129:12, 129:21-130:5; PX0768 (Howard Nevada Affidavit) ¶¶27, 28, 30; PX0605; PX0663; DX224; PX0654.) Mr. Goodbarn testified that Mr. Ergen did not share information regarding his trades with the Special Committee as a ploy to insulate himself from this adver *291 sary proceeding. (PX0767 (Goodbarn Nevada Dep.) at 104:23-105:6.)
149. Upon learning of the LBAC Bid from news alerts on May 20 and 21, 2013, 23 Mr. Howard stated that he was surprised, as it “was [his] expectation that Mr. Ergen would not make any LightSquared bid without first discussing it with the DISH Board and the Special Committee in order to get their approval, since any such bid could impact DISH’s own strategy vis-a-vis LightSquared.” 24
150. When asked whether the Special Committee considered proposing that DISH make a bid for LightSquared’s spectrum in an amount below that of the LBAC Bid, Mr. Goodbarn stated that the LBAC Bid “made it difficult socially to do that ... [b]ecause [Ergen’s] put a line in the sand on a bid and we’re part of a, you know, a DISH board and he owns a majority of the company.” (PX0767 (Goodbarn Nevada Dep.) at 100:7-21.) Pressed further on why it would be difficult for DISH to make a bid lower than Mr. Ergen’s bid, Mr. Goodbarn explained that if Mr. Ergen had committed to a $2 billion bid with no other bidder present, and the Special Committee then bid $1.5 billion, Mr. Ergen may take “a big loss” on his debt investment and “that does not make a very happy chairman.” (PX0767 (Goodbarn Nevada Dep.) at 100:22-101:5.)
151. On July 3, 2013, Mr. Ergen sent to Messrs. Goodbarn, Howard, and David Moskowitz, an in-house attorney and a Senior Vice President for DISH and Ech-oStar, via email (the “Ergen Transmittal Email”), a presentation for the Special Committee and the DISH Board. (PX0927.)
152. In the Ergen Transmittal Email, Mr. Ergen states, “This is just a high level view of lightsquared and its potential relation to dish. Please feel free to share with the board or advisors. Also, not on here would be the possibility of freeing up at least two of the existing dbsd/terrestar satellites that could possibly be monetized.” (Id. at DISHJPLAN000003150.)
153. The six-page presentation, attached to the Ergen Transmittal Email, was dated July 8, 2013 and was entitled “Strategic Investment Opportunity — L-Band Acquisition, LLC” (the “Ergen July 8 Presentation”). (PX0928.) The Ergen July 8 Presentation was delivered to the Special Committee and PWP, among other recipients, at a special meeting of the DISH Board on July 8, 2013.
154. The Ergen July 8 Presentation provided, for discussion purposes in the context of considering whether DISH would participate in the LBAC Bid, certain valuation information relating to LightSq-uared’s spectrum as of that date.
155. Under a line item entitled “Implied Net Primary Asset Value,” the Er-gen July 8 Presentation lists a range of values of between $3.341 billion and $5.213 billion, with a midpoint of $4.277 billion, referring to Mr. Ergen’s estimate of the value of 20 MHz of LightSquared’s spec- *292 tram assets and its satellites, excluding its 10MHz of lower downlink spectrum.
156. Under the heading “Implied Supplemental Asset Value,” the Ergen July 8 Presentation lists a range of values of between $1,838 billion and $3,783 billion, with a midpoint of $2,308 billion, for what it identifies as the total of (i) 5.0 MHz of “Reclaimed Unuseable [sic] AWS^i,” (ii) 5.0 MHz of “Reclaimed Impaired AWS-4,” and (iii) “L-Band Downlink Spectrum.” Id. at 5 (DISH_PLAN000003114). The Implied Supplemental Asset Value was Mr. Ergen’s estimate of (a) the increase in value of DISH’s existing spectrum that would flow from DISH’s acquisition of LightSquared’s spectrum, which would permit unusable and impaired uplink AWS-4 spectrum to be converted to down-link and (b) his range of values for 20 MHz of LightSquared’s downlink spectrum. In other words, the supplemental value of LightSquared’s assets to DISH was estimated by Mr. Ergen to be between $1,833 billion and $3,783 billion.
157. Combined with the Implied Net Primary Asset Value of $3,341 billion to $5,213 billion, the total value of LightSq-uared’s assets in DISH’s hands (the “Combined Implied Net Primary and Supplemental Asset Value”) was estimated by Mr. Ergen to be between $5,174 billion and $8,996 billion, with a midpoint of $7,085 billion.
158. On or about July 21, 2013, PWP provided two reports to the DISH Board— a nine-page presentation entitled “Project Discus Summary Conclusions,” dated July 21, 2013 and a 69-page PWP document, dated July 2013, entitled “Project Discus Discussion Materials” (the “PWP Report”). (PX0929; PX0930.) In a section captioned “Illustrative Value of DISH’s Use Cases Related to LightSquared,” the PWP Report concludes, “The cumulative value of the illustrative use cases that leverage the LightSquared LP acquisition is estimated to be $4.4-$13.3bn.” (Id. at 39 (DISH_PLAN135).) The PWP Report also recites that “In June 2013, [SPSO] joined the Ad Hoc Secured Group to prevent termination of LightSquared LP’s obligations of the Exclusivity stipulation.” (PX930 at 66 (DISHSCJPLAN00000162).)
159. On July 21, 2013, the Special Committee presented its conclusions to the DISH Board, recommending that DISH pursue the LBAC Bid for $2.2 billion, subject to five express conditions, four of which implicated further review and decision making by the Special Committee:
(i) that any material changes to the terms of the bid and/or APA would be subject to the review and approval of the Committee;
(ii) that DISH would acquire one hundred percent of LBAC, to the exclusion of EchoStar;
(iii) that the Committee and its legal and financial advisors would remain involved in all negotiations regarding the proposed transaction going forward;
(iv) that the Committee would review and approve the terms of the acquisition by DISH of Mr. Ergen’s interest in LBAC; and
(v) that the Committee expressly reserved the right to obtain all of the requested information regarding Mr. Ergen’s acquisition of debt and/or other securities issued by LightSquared as well as the right to evaluate potential corporate opportunity issues.
(PX0716 at GH_L2_000973-74; PX0768 at ¶ 47.)
160. Immediately after the Special Committee delivered its conditional approval of the LBAC Bid, the DISH Board disbanded the Special Committee without *293 giving any advance notice to the Special Committee. Other than Messrs. Howard and Goodbarn, who abstained, the Board’s vote was unanimous (PX0768 (Howard Nevada Affidavit) ¶¶ 49-52; DX400), notwithstanding that (i) the conditions set forth in the Special Committee’s conditional approval had not been satisfied (PX0736) and (ii) the resolutions creating the Special Committee allowed disbandment only upon the Special Committee’s decision, with the bid remaining viable. (PX0491 at DISH_NY0000000005.)
161. After the Special Committee was disbanded, on July 22, 2013, DISH agreed to buy LBAC from Mr. Ergen for a dollar, without the Special Committee reviewing the terms of the acquisition agreement. (Howard Dep. 315:10-316:3; Jan. 13 Tr. (Ergen) 195:6-8.)
162. On July 23, 2013, DISH announced its intention to bid through LBAC for LightSquared’s spectrum for $2.2 billion (the “DISH/LBAC Bid”). Mr. Howard learned of the bid through the “wires” and did not even know whether the bid was submitted by DISH or by Mr. Ergen. (PX0725.) On July 24, 2013, the Special Committee wrote a letter to the DISH Board expressing its surprise at its disbandment and noting that the five conditions remained unsatisfied. (PX0736.) On July 25, 2013, Mr. Howard resigned from the DISH Board, an action taken so suddenly that DISH risked delisting from the NASDAQ. (PX0746; see also PX0741; DX313.)
163. On July 23, 2013, DISH announced that it had executed a Plan Support Agreement (the “PSA”), pursuant to which LBAC would act as the stalking horse bidder for the Ad Hoc Secured Group’s plan of reorganization (the “Ad Hoc Secured Group Plan”). (Jan. 13 Tr. (Ergen) 195:6-12; PX0730.) There was no document submitted into evidence reflecting the involvement of the Special Committee in (i) the negotiation and documentation of DISH’s purchase of LBAC from Mr. Ergen or (ii) the negotiation of documents that were critical to the LightSq-uared acquisition — the PSA and the Asset Purchase Agreement (the “APA”). Mr. Howard stated that neither the Special Committee nor its advisors were ever asked to participate in negotiations with the Ad Hoc Secured Group, and neither the Special Committee nor its counsel had been involved in negotiating the APA. (PX0768 (Howard Nevada Affidavit) at ¶¶ 42, 46.)
164. The APA, incorporated by reference into the PSA, contained a broad release for all claims against Mr. Ergen, DISH, EchoStar, and SPSO (an entity which purportedly has no ties or relationship with DISH). (PX0823 § 7.6; PX0841 at 11, n.9, 70, 88; 17 C.F.R. § 240 .12b-2.)
VII. LightSquared as a Strategic Investment for DISH
A. DISH and EchoStar’s Prior Acquisitions of Spectrum Assets
165. DISH’s strategic goals include participation in the wireless space and contemplate the need for a great deal of spectrum. (Jan. 13 Tr. (Ergen) 26:18-20, 96:18-98:22, 100:25-101:4.) Mr. Ergen testified that spectrum is a limited resource that currently suffers from a shortage, with the amount of data flowing over available spectrum doubling every year. (Jan. 13 Tr. (Ergen) 47:3-48:10, 96:5-14; PX0747 at SPSO-00012492.) Mr. Falcone concurred with Mr. Ergen’s view of spectrum, referring to wireless spectrum as “beachfront property.” (Jan. 16 Tr. (Fal-cone) 15:17-16:1).
166. DISH and EchoStar have for years been attempting to acquire, or merge with, numerous spectrum-owning *294 companies, including actual and potential transactions involving DBSD, TerreStar Networks (“TerreStar”), Sirius XM Holdings, Inc., Clearwire Corp., Sprint Corp., and Inmarsat pic. (Jan. 13 Tr. (Ergen) 95:6-96:4,101:5-103:5,105:11-108:10.)
167. DISH and EchoStar have a history of purchasing distressed or discounted debt of their targets as a step toward an eventual acquisition, including acquiring a blocking position in distressed satellite companies in bankruptcy, such as DBSD and TerreStar, enabling them to acquire the companies’ spectrum assets at a discount. (Jan. 13 Tr. (Ergen) 100:25-103:9; Jan. 10 Tr. (Kiser) 108:21-109:6, 106:24-107:3; Howard Dep. 285:15-24.)
168. In DISH’s acquisition of TerreS-tar through bankruptcy, Mr. Ergen and DISH employed a three-step strategy. First, EchoStar became the largest secured creditor of TerreStar and the second-biggest shareholder in the parent, TerreStar Corp. (PX0012 (EchoStar 10-Q Jun. 30, 2011 at 14).) Second, DISH became the ultimate purchaser of TerreStar as a stalking horse bidder, repaying Ech-oStar in full. (DX008 (DISH 8-K Jun. 16, 2011 at 2).) Third, DISH entered into a purchase agreement with TerreStar whereby both the debt-buyer (EchoStar) and the acquirer (DISH) obtained broad releases that ensured EchoStar’s claims would be paid in full. (Jan. 13 Tr. (Ergen) 105:14-17; PX0011 at 1, 5, 9 n.4, 61.)
169. DISH’s acquisition of DBSD through the bankruptcy process, in which Mr. Ergen was also intimately involved, employed a similar strategy. (Jan. 13 Tr. (Ergen) 106:7-10.) DISH acquired a blocking position in DBSD’s first lien debt and attempted to acquire a blocking position in DBSD’s second lien debt to facilitate its acquisition. (Jan. 13 Tr. (Ergen) 104:4-10, 105:11-13,106:2-10; PX0831) (In re DBSD North America, Inc., 634 F.3d 79, 104 (2d Cir.2011) (“DISH purchased the claims as votes it could use as levers to bend the bankruptcy process toward its own strategic objective of acquiring DBSD’s spectrum rights, not protecting its claim”)); PX0864 (In re DBSD North America, Inc., 421 B.R. 133, 136 (Bankr.S.D.N.Y.2009) (quoting DISH document stating that DISH “believe[d] there is a strategic opportunity to obtain a blocking position in the 2nd Priority Convertible Notes and control the bankruptcy process for this potentially strategic asset.”).) Despite the bankruptcy court’s designating DISH’s votes, DISH ultimately acquired DBSD’s spectrum assets and was repaid in full on its debt holdings. (PX0864, 421 B.R. at 143 (designating DISH’s votes).)
170. In March 2012, DISH gained control of DBSD and TerreStar’s spectrum, now known as AWS-4 spectrum, which, as of at least January 17, 2014, DISH had still not deployed. (Jan. 13 Tr. (Ergen) 101:5-14, 147:22-25; Jan. 17 Tr. (Cullen) 111:21-24; DX024; Jan. 10 Tr. (Kiser) 109:7-9; Jan. 17 Tr. (Cullen) 139:2-9.)
B. Mr. Ergen’s Consideration of LightSquared’s Spectrum Assets
171. Mr. Ergen testified that in 2011, he considered, for at least a second time, a DISH investment in LightSquared. 25 (Jan. 13 Tr. (Ergen) 109:3-9.) Mr. Ergen believed that LightSquared was “very similar” to DBSD and TerreStar — companies DISH had recently acquired — and that its spectrum “could fit with the existing spectrum [that DISH owns] in the long- *295 term.” 26 (Jan. 13 Tr. (Ergen) 109:10-16, 111:5-16; PX747.)
172. In order for DISH to operate a terrestrial wireless network, it needs uplink spectrum to pair with its downlink spectrum; because LightSquared has clean uplink spectrum, 27 this creates a natural synergy. (Jan. 9 Tr. (Smith) 125:4-21.) LightSquared’s L-Band spectrum is a “natural pairing” for DISH, given that LightSquared’s uplink spectrum is “safe to use as uplink spectrum.” (Jan. 9 Tr. (Smith) 114:22-126:2.) LightSquared’s spectrum could be repurposed as uplink-only spectrum and paired with the spectrum DISH acquired with TerreStar and DBSD, which can be converted to down-link 28 — thereby avoiding known interference problems with the uplink portion of that spectrum. (PX0154; PX0195; Jan. 13 Tr. (Ergen) 151:18-25.)
173. LightSquared has significant blocks of usable uplink spectrum. Indeed, LightSquared is presently, and has been for some time, the only significant source of available uplink spectrum to acquire. (See PX0195 (“one potentially logical technical solution that could combine LightSq-uared’s spectrum (as uplinks) with the TerreStar and DBSD spectrum (if that was all converted to downlinks)”).)
174. Mr. Ergen testified that had he acquired LightSquared, his plan would entail “two or three years to clean up LightSquared[’s spectrum],” ie., obtain the necessary FCC approvals, and that he believed “at the end of the process, there would be ... twenty megahertz of uplink spectrum.” (Jan. 13 Tr. (Ergen) 245:17-246:21.)
175. The DISH Special Committee concluded in June 2013 that the purchase of LightSquared’s spectrum assets “would be an attractive opportunity for the Corporation’s shareholders, given that such an acquisition could enhance the value of the spectrum already owned by the Corporation.” (PX0716 at GH_L2_000972.) DISH and Mr. Ergen were aware of the inherent value in LightSquared’s spectrum *296 and its actual and potential synergies with DISH’s spectrum.
176. As set forth in paragraphs 153-57 supra, the Ergen July 8 Presentation was delivered to the DISH Special Committee and PWP, financial advisor to the DISH Special Committee, among other recipients, at a special meeting of the DISH Board on July 8, 2013. The Combined Implied Net Primary and Supplemental Asset Value listed in the presentation— i.e., the estimated total value of LightSq-uared’s assets in DISH’s hands — was estimated by Mr. Ergen to be between $5,174 billion and $8,996 billion, with a midpoint of $7,085 billion.
177. Mr. Ergen acknowledged during a DISH earnings call on August 6, 2013 that LightSquared’s spectrum would be beneficial to DISH: LightSquared is “interesting to [DISH]” because the spectrum “potentially could fit with the existing spectrum that [DISH has] in long term.... So putting all that spectrum together at the same time maintaining the ability to use the satellite for voice and data ... makes a lot of sense.” (PX0747 at SPSO-00012486.)
C. DISH’S Pursuit of Sprint and Cle-arwire
178. At the same time that DISH was ostensibly pursuing the Sprint and Clear-wire transactions, 29 Mr. Ergen was simultaneously pursuing LightSquared’s assets to preserve optionality for DISH in case DISH’s bids for Sprint and Clearwire fell through. Mr. Ergen has stated publicly that: “I like, strategically, to have a lot of optionality and it’s easier to make good choices when you have options.” (PX0839 at 7.) Thus, he pursued LightSquared as an alternative for DISH if the Sprint and Clearwire acquisitions fell through-as they ultimately did. (PX0832 (Ergen Nevada Dep.) at 135:23-136:3 (a DISH bid for LightSquared could be a “Plan B” if potential deal with Sprint did not work out), 140:22-141:23 (Mr. Ergen made the bid for LightSquared’s spectrum to preserve DISH and EchoStar’s “optionality” to participate); Jan. 13 Tr. (Ergen) 186:25-187:20 (the bid “opened up the optionality for DISH to the extent they lost Sprint”); PX0908 at 10 (“we realize [SoftBank is] a formidable competitor and we have to be prepared to win and we have to be prepared to lose”).)
VIII. Mr. Ergen’s Assertion That He Was Making a Personal Investment Is Belied by the Evidence
179. Mr. Ergen’s substantial purchases of LP Debt are not consistent with his historical personal investments. Mr. Er-gen has a history of investing in low-risk, diversified, liquid assets- — not investing substantially all of his liquid assets in the distressed debt of a single company. Moreover, while Mr. Ergen’s willingness to pay near par for the distressed LP Debt is consistent with a plan to obtain a blocking position — and indeed, a majority position — in order to acquire the underlying company, such purchases are somewhat inconsistent with a personal investment by a typical creditor seeking to make a profit on distressed debt by buying low and selling high.
A. SPSO’s Purchases of LP Debt Were Inconsiste

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8497140. Public record. Not legal advice.