Satellite mogul Charlie Ergen admitted on Monday that he likes to "play in the mud" — but that there was nothing dirty about his purchase of LightSquared debt.
Ergen, going toe-to-toe with bitter rival Phil Falcone's bankrupt wireless start-up, said he bought the $850 million in debt for himself — not for his Dish Network.
It was a "great investment," he said.
Falcone, fighting fiercely to retain control of his high-speed telecom company, has accused Ergen of secretly moving to acquire the debt in a bid to wrestle LightSquared from his grip.
The debt barred rivals from owning it.
Ergen claims he broke no rules — but cloaked his purchases in secrecy for more than a year, not even telling his wife, because he's a private person.
"I just don't really like people knowing my personal investments," Ergen said.
Plus, if word leaked that he was buying the debt, the price was sure to rise, Ergen told Judge Shelley Chapman while testifying at a trial in Manhattan Bankruptcy Court.
After the debt purchases, Ergen-controlled Dish made a $2.2 billion offer for LightSquared's spectrum. It withdrew the offer last week.
Lawyers for LightSquared, controlled by Falcone's Harbinger Capital, said Ergen kept mum about the discount purchases of debt, which cost him a cool $700 million, because he knew he was violating a covenant forbidding strategic buyers from owning the debt.
Ergen on Monday admitted that Dish has been acquiring spectrum wherever it can in recent years amid concerns of a "spectrum shortage." He also testified that he initially considered LightSquared as an acquisition target for Dish, but he tossed the idea after learning that Dish was forbidden from buying the debt.
In spending $700 million for the personal purchase, Ergen testified, he nearly drained a family trust where his wife is a co-trustee.
If Ergen is found to have bought the debt in violation of the rules, he could find himself being pushed to the back of the line when it comes to recoveries.
Also, Dish could be barred from reviving a bid for LightSquared.
In one interesting give-and-take between Ergen and Harbinger lawyers, the pay-TV mogul was asked why Dish Treasurer Jason Kiser was advising him on the debt purchase if, in fact, it was a personal investment.
"He likes being in the action," Ergen said. He referred to the younger executive, someone he has known for 27 years, as a "mentee."
"When he's doing stuff for me personally, he gets to spend time with me and I think he likes that."
Harbinger lawyer David Friedman also asked Ergen about statements he made at the University of Colorado that Dish likes to "play in the mud."
"If people play in the mud, we're not opposed to getting in the mud with them," Ergen mumbled in his Tennessee drawl.
Friedman asked Ergen whether Dish will simply revive its bid once the trial is over.
"There's no way I can do that unilaterally," said Ergen, who controls close to 90 percent of Dish's voting power.
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