DISH DBS and its wireless subsidiaries filed for Chapter 11 bankruptcy recently (June 30) under a pre-packaged restructuring plan already backed by most creditors and parent company EchoStar.
The wireless entities involved include DISH Wireless L.L.C., the main unit, along with DISH Wireless Leasing L.L.C., DISH Wireless Retail Holding L.L.C., DISH Wireless Retail Operating L.L.C., DISH Infinite Corporation, and Neyland Networks LLC. Together with DISH DBS and several other related subsidiaries, they form the 18 debtors in the jointly administered Chapter 11 cases.
The $2 billion catalyst
The move was triggered by a $2 billion batch of senior secured notes that came due July 1, which the company lacked the cash to repay.
The funds in question were supposed to come from EchoStar’s ongoing $23 billion spectrum sale to AT&T, but delays in finalizing the transaction threw off the schedule.
Around 88% of creditors are backing the restructuring, including holders of more than $8.8 billion in Dish Wireless debt. EchoStar aims to emerge from the bankruptcy by the end of Q3.
CEO and co-founder Charlie Ergen framed the filing as a step forward for the company: “EchoStar has been at the forefront of telecommunications for over 45 years, and these steps will position the business for an even stronger future,” he said in a statement. “We are operating as usual throughout this process, delivering the same high-quality services that our customers expect,” he added.
Dish Wireless’s 5G network is being wound down as part of the planned transition following the spectrum sales. This side of the business has been operating on the assumption that proceeds from the AT&T deal would come through on time.
Customers will not see any changes to their service in the meantime as the AT&T spectrum sale continues to work its way toward closing.
Sources: EchoStar, Epiq, Broadband TV News