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EchoStar bondholders engaged Akin Gump Strauss Hauer & Feld in preparation for a possible bankruptcy filing. This move comes amid threats from federal regulators to revoke the company’s wireless spectrum licenses, as reported by the Wall Street Journal.
EchoStar, based in Englewood, Colorado, owns Dish TV and Boost Mobile. In recent weeks, the company chose to forgo approximately $500 million in interest payments on several bonds, initiating 30-day grace periods. Akin Gump is providing legal advice to EchoStar bondholders during this period of financial uncertainty.
The company decided not to make a $326 million interest payment on EchoStar bonds related to its spectrum business on May 30. Additionally, it skipped a $183 million payment on Dish DBS bonds on June 2. These decisions were made in response to the Federal Communications Commission’s recent decision to review EchoStar’s compliance with the requirement to build a nationwide 5G network.
Analysts suggest that a bankruptcy filing could help EchoStar delay any potential action by the FCC (BME:FCC) to revoke its satellite spectrum licenses. The company’s regulatory filings indicate that these skipped bond interest payments are a response to the uncertainty surrounding the FCC’s compliance review.
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