By Joseph Checkler Of DOW JONES DAILY BANKRUPTCY REVIEW NEW YORK -(Dow Jones)- A judge on Thursday said TerreStar Networks Inc. can sell itself to Charles Ergen's Dish Network Corp. (DISH) for $1.375 billion, Ergen's latest big-ticket purchase in a personal shopping spree through the New York bankruptcy court. Judge Sean H. Lane of U.S. Bankruptcy Court in Manhattan approved the sale to Dish, which was named the high bidder for TerreStar late last month when no competing bidders emerged. "It sounds like a good result for the case," Lane said. The deal is subject to regulatory approval. Akin Gump Strauss Hauer & Feld LLP's Arik Preis, a lawyer for TerreStar, told Lane of some minor tweaks it made to satisfy small objections, including one from Space Systems/Loral Inc. No parties objected to the sale at the hearing. If an auction had taken place, Dish--the "stalking-horse" bidder--would have been entitled to a breakup fee of $27.5 million plus $3 million in reimbursements. The minimum increase for competing offers was $25 million, meaning that any qualified bidder would have had to pay $55.5 million more for TerreStar than Dish would have. Dish, controlled by satellite mogul Ergen, is also close to buying another satellite company currently in bankruptcy in New York, DBSD Corp. Earlier this year, Dish bought the assets of video-rental giant Blockbuster Inc. (BLOAQ) in a bankruptcy-court auction. The TerreStar purchase fetches about $150 million more cash for the company than a prior plan. A Dish spokesman declined to comment. TerreStar Networks, which is trying to build the first satellite smartphone, filed for Chapter 11 protection in Manhattan last October with a plan calling for secured noteholders, including Ergen-owned EchoStar Corp. (SATS), to swap more than $850 million in debt for nearly all the equity in a reorganized TerreStar. More junior creditors, however, would have gotten just pennies on the dollar and existing equity holders would have received nothing. The Reston, Va., company scrapped that plan earlier this year in favor of the auction, approved by Lane in May even though the company still didn't have an opening bid at that point. TerreStar Networks is the main operating subsidiary of publicly traded TerreStar Corp. (TSTRQ), which itself filed for Chapter 11 protection earlier this year. Still unresolved is Sprint Nextel Corp.'s (S) contention that TerreStar owes it $104 million for band-clearing fees, which the two sides will continue arguing about in court. (Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.) -By Joseph Checkler; Dow Jones Newswires; 212-416-2152; joseph.checkler@dowjones.com
