In December, the Deal Professor, Steven Davidoff, wrote a great piece about the grey areas triggered by DISH Network Chairman Charles Ergen’s debt purchase from LightSquared (a failing satellite-based broadband comany).  This case has several twists and turns, and I plan to write a few posts on some of these areas.  Today, we’ll start with debt purchase. 

As Davidoff explains, Lightsquared’s debt could not (per the debt documents) be purchased by “direct competitor” (e.g., Dish Network), so Ergen used a personal investment vehicle to buy the debt.  This, the Deal Professor notes, appears acceptable under the debt documents (even if it’s not what was intended):

In a court filing, LightSquared contends that Mr. Ergen breached the debt agreement because the documents define a “direct competitor” to also be a subsidiary of a direct competitor. LightSquared is arguing that because Mr. Ergen controls both Dish and the hedge fund that bought the debt, the fund is a subsidiary of Dish.

Yet that argument stretches the plain meaning of a “subsidiary” — a company owned or controlled by a holding company — language that is not in the document. So LightSquared’s claims against Mr. Ergen are tenuous at best.

The acquisition itself seemed…