EchoStar Bondholders Huddle With Law Firm Akin Gump as Default Looms
(Bloomberg) -- Bondholders to EchoStar Corp. are working with law firm Akin Gump Strauss Hauer & Feld and investment bank Centerview Partners LLC as the telecommunications company mulls a potential bankruptcy filing amid a Federal Communications Commission probe, according to people familiar with the matter.
The moves come as the company controlled by billionaire Charlie Ergen announced at the end of May it was skipping bond coupon payments, said the people, who asked not to be named because they can't speak publicly. That set the clock ticking for a default unless the company pays up before the end of a 30-day grace period.
A spokesperson for EchoStar and a representative for Akin Gump didn't respond to requests for comment. A representative for Centerview declined to comment. The Wall Street Journal reported Akin Gump is advising the bondholder group earlier on Tuesday.
The company has about $5 billion of cash on its balance sheet but decided not to pay bond interest, including those of its Dish DBS unit that came due on June 2, as the FCC review of spectrum rights has 'frozen' its ability to make decisions regarding the company's 5G network buildout.
EchoStar's statement on May 30 suggested a Chapter 11 bankruptcy filing was possible. The company declined to comment on 'rumors and speculation' regarding a possible Chapter 11 filing responding to questions from Bloomberg News last week.
Ergen had repeatedly sought to meet with FCC's Chairman Brendan Carr in the months leading up to the agency's probe into the company's wireless spectrum holdings, but was never able to secure a sit-down, according to emails made public by EchoStar on Monday.
(Updates to add Centerview Partners as the bank the group is consulting.)
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