- Dish DBS exited Chapter 11 with about $4.35 billion less debt, sending EchoStar shares higher
- Dish Wireless remains in bankruptcy as its more complicated restructuring continues separately
- Tower companies are pursuing billions in claims while Dish equipment remains on their sites
EchoStar’s shares were up more than 6% today after the company announced that its Dish DBS subsidiary emerged from Chapter 11 bankruptcy – with outstanding debt reduced by about $4.35 billion.
Dish DBS operates the Dish TV and Sling TV pay-TV services. The Dish Wireless subsidiary, however, remains in Chapter 11 bankruptcy proceedings, and that’s not expected to get settled anytime soon.
EchoStar's subsidiaries initially filed for bankruptcy in June, and EchoStar wanted the Dish DBS and Dish Wireless cases to be considered as one package, but Dish Wireless tower creditors successfully argued that they should be treated as separate proceedings. That’s at least in part because the wireless business is so much more complicated.
Dish Wireless and ‘force majeure’
Dish’s wireless legal troubles really started in earnest last year after Federal Communications Commission (FCC) Chairman Brendan Carr launched an investigation into Dish’s 5G buildout requirements and spectrum usage.
That, according to EchoStar Chairman Charlie Ergen, triggered a “dark cloud” over the company and basically sent it into a tailspin because it created so much uncertainty.
The predicament forced EchoStar into $40 billion+ spectrum sales to SpaceX and AT&T, which according to Dish then made it impossible for it to continue operating a wireless network. The whole thing was blamed on a government-triggered “force majeure” event, rendering Dish unable to pay its bills and ultimately falling into bankruptcy.
Crown Castle filed suit last year and argues that Dish Wireless owes it more than $3.5 billion for services rendered as part of the 5G network build. Other tower companies and cell site structure landlords are in a bind as well, as they’ve got Dish equipment still on their structures but aren’t receiving any income for hosting it there.
Technically, it’s our understanding that the wireless equipment – radios, antennas and associated gear – cannot be removed while the case is in bankruptcy court.
Throughout it all, EchoStar had held that the company’s Boost Mobile and Gen Mobile brands are not affected by the bankruptcy proceedings and that it’s “business as usual” for those entities.
Read more stories about Dish’s wireless troubles on Fierce Network:
Dish’s bankruptcy exposes the messy aftermath of its 5G gamble
Dish Wireless bankruptcy fight gets messier
EchoStar cites ‘force majeure’ as Dish 5G contractors cry foul