TAMPA, Fla. — EchoStar subsidiaries tied to its satellite TV and abandoned 5G network businesses have filed for Chapter 11 bankruptcy protection, advancing a prepackaged restructuring plan to repay debt early after selling spectrum to SpaceX and AT&T.
DISH DBS said June 30 that it and certain subsidiaries, including DISH Wireless, had filed the cases in the U.S. Bankruptcy Court for the Southern District of Texas.
The reorganization plan leaves untouched a $2.4 billion escrow that EchoStar must set aside to cover disputes over its abandoned terrestrial wireless buildout, a condition the Federal Communications Commission attached to its approval of spectrum sales totaling more than $40 billion.
“EchoStar has been at the forefront of telecommunications for over 45 years, and these steps will position the business for an even stronger future,” EchoStar cofounder and chairman Charlie Ergen said in a statement.
“We are operating as usual throughout this process, delivering the same high-quality services that our customers expect.”
The company said the move does not affect DISH TV, Sling TV, or their active operations and employees. Satellite broadband provider Hughes Satellite Systems and entities that operate the Boost Mobile and Gen Mobile brands are not part of the bankruptcy process.
The bankruptcy filings follow delays closing the spectrum sale to AT&T, which DISH DBS said left it unable to cover $2 billion of debt payments due July 1.
The restructuring would enable DISH DBS to repay more debt early without penalty, while bringing in a court-supervised process for DISH Wireless to sell assets from the terrestrial network it had been building with the spectrum.
The move also allows the company to focus on ongoing operations, DISH DBS said, and provides more strategic flexibility for future initiatives it did not disclose.
According to EchoStar, creditors representing most DISH DBS notes and more than $8.8 billion of DISH Wireless debt have already agreed to support the plan, putting the subsidiaries on track to emerge from bankruptcy before the end of September.
