EchoStar, StarBand settle out of court
EchoStar Communications Corp. and StarBand Communications Inc. have settled
their differences over a billing dispute that StarBand claimed forced it toward
bankruptcy and cost it about $3 million.
EchoStar's dealers had been reselling StarBand's broadband-satellite
offering, but in February, EchoStar pulled the plug on its relationship and its $100
million investment in the company, which is headquartered in McLean, Va., and is
the subsidiary of Gilat Satellite Networks Ltd., an Israel-based company.
In a lawsuit filed in U.S. District Court in Virginia, StarBand alleged that
even though EchoStar had severed the relationship, it still was collecting
nearly $400,000 per week in revenue from StarBand customers that EchoStar was not
turning over to StarBand. That was costing StarBand enough that it was forced to
file for Chapter 11 last month. StarBand had intended to include its suit
against EchoStar into its bankruptcy proceedings, but the settlement eliminates
In an agreement delivered to U.S. Bankruptcy Court in Delaware, EchoStar
agreed to pay StarBand $710,000 and to turn back over to StarBand the records of
16,000 retail customers. EchoStar will also pay StarBand $35 per month for each
of the 15,000 customers to whom EchoStar sells wholesale service.
A bankruptcy judge must approve the agreement within 30 days.
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Contributing editor Paige Albiniak has been covering the business of television for nearly 25 years. She is a longtime contributor to Next TV, Broadcasting + Cable and Multichannel News. She concurrently serves as editorial director for entertainment marketing association Promax. She has written for such publications as TVNewsCheck, The New York Post, Variety, CBS Watch and more. Albiniak was B+C’s Los Angeles bureau chief from September 2002 to 2004, and an associate editor covering Congress and lobbying for the magazine in Washington, D.C., from January 1997-September 2002.