August 6, 2026 – Noteholders holding more than 69.6% of the outstanding principal amount of Hughes’s $750.0mn 5.25% Senior Secured Notes and more than 88.79% of the outstanding principal amount of Hughes’s $750.0mn 6.625% Senior Unsecured Notes filed a motion seeking the immediate appointment of an examiner to investigate alleged self-dealing transactions involving the Debtors, parent EchoStar Corporation and other insiders and affiliates [Docket No. 93].

The motion converts the allegations that Jones Day partner Bruce Bennett pressed throughout Hughes’s contested two-day first-day hearing into a formal demand that an independent fiduciary—not the Debtors’ recently appointed special committee—control the investigation of potential estate claims. The Noteholders contend that transactions involving an allegedly above-market satellite lease, $1.029bn of dividends, a $196.0mn tax-related payment and Hughes’s participation in EchoStar’s SpaceX transaction stripped more than $1.5bn from Hughes, excluding more than $200.0mn of asserted prejudgment interest, and left the Company unable to repay the Notes when they matured on August 1st.

The proposed examiner would investigate potential fraudulent-transfer, insider-preference, unlawful-dividend, fiduciary-duty and equitable-subordination claims involving EchoStar, EchoStar XXIV, Charles W. Ergen and Hughes’s current and former directors and officers. The Noteholders also ask the Court to prevent the special committee from continuing any overlapping investigation.

A hearing on the motion is scheduled for August 26th at 1:00 p.m. CT.

Jones Day, notwithstanding promises over the last two day that it would file a 2019 verified statement detailing composition of the "Noteholders" group, has yet to do so.

Examiner Motion Summary

The examiner motion advances a creditor challenge that began before the Petition date and dominated Hughes’s first-day proceedings (see our first day courtroom coverage here). Bennett has contested both the Debtors’ explanation for the bankruptcy and their proposed governance response to the EchoStar transactions. Hughes attributes its financial deterioration principally to a structural collapse in its legacy GEO consumer-broadband business as Starlink and other LEO providers took subscribers with faster, lower-latency service. The Noteholders acknowledge that decline but argue that it does not explain why Hughes reached the August maturity with $1.5bn of Notes outstanding and insufficient cash to repay them.

Their motion instead points to a series of transactions that allegedly transferred more than $1.5bn of value to EchoStar and its affiliates while Hughes’s subscriber base and earnings were already deteriorating. Those transactions include the Jupiter 3 lease, which carries approximately $191.0mn of annual rent; $529.0mn and $500.0mn dividends paid in February and March 2024; an approximately $196.0mn tax-related payment; $185.0mn of lease prepayments; and Hughes’s contribution of subscribers, satellite assets or regulatory authorizations to EchoStar’s SpaceX transaction. The Noteholders say Hughes’s cash, cash equivalents and marketable securities fell from approximately $1.694bn at December 31, 2023, to $260.0mn three months later, with no reduction in the $1.5bn Notes.

Bennett framed that chronology during the first-day hearing by telling Judge Alfredo R. Perez that, before the dividends, “there was enough cash on the balance sheet to pay those notes,” while afterward “there was not sufficient cash.” He also challenged the economics of the Jupiter 3 lease and argued that the 13.75% rate charged on EchoStar’s subsequent $50.0mn secured loan represented EchoStar’s own assessment of Hughes’s risk. “This isn’t an investment-grade rate,” Bennett said. “This is a huge sub-basement rate.” He called the insider loan “the most powerful evidence” of the risk embedded in Hughes’s finances.

The first-day hearing also featured sharp disagreement over whether Hughes’s four-week cash forecast demonstrated a stabilizing business or merely deferred the costs exposing the lenders’ collateral. Bennett argued that the projections omitted Jupiter 3 rent, professional fees and other expenses that would continue to accrue and confront the Company after the interim period. “We know that material expenses are not being paid and [are being] pushed into subsequent periods,” he said. “The deferrals leave a big mess.” Bennett also questioned why the adequate-protection package had not been separately approved by a Hughes business executive, board or special committee, arguing that “some lawyers decided to take an aggressive position” while the risk to secured creditors “just seemingly wasn’t discussed.”

The Debtors pushed back that Bennett was attempting to transform an interim cash-collateral hearing into a broader trial over Hughes’s restructuring risk. Their counsel argued that the relevant question was diminution during the four weeks preceding the final hearing, not the ultimate success of the restructuring, and relied on chief restructuring officer Robert Del Genio’s testimony that cash was projected to increase from approximately $60.4mn to $72.0mn. Counsel maintained that replacement liens, section 507(b) claims, the absence of any professional-fee escrow and the projected cash build provided adequate protection, emphasizing that the legal standard required “adequate protection, not guaranteed protection.” Bennett’s two-sentence response was that “a best guess is absolutely not an indubitable equivalent.”

Judge Perez ultimately authorized interim cash-collateral use but required Hughes to place one month of secured-note interest in a segregated account as a temporary cushion. The Court found Del Genio credible and accepted his forecast as the best available estimate, while leaving broader questions concerning diminution for the final hearing. Judge Perez declined to grant liens on avoidance actions before an official committee had been formed, observing that those claims may also implicate the interests of unsecured creditors.

That ruling preserved the issue now placed squarely before the Court: who should investigate and control the potential claims against EchoStar. Hughes says its special committee, composed of two independent directors appointed July 28th and represented by Kirkland & Ellis, is the appropriate estate fiduciary. Debtors’ counsel told the Court that the committee had met, taken the allegations seriously and delivered a comprehensive diligence request.

The Noteholders respond that the committee was created only five days before the bankruptcy, after they identified the potential claims, and through a process controlled by the same insiders who may become investigation targets. The motion calls the governance change an “eleventh-hour” measure that “does not cure the Debtors’ disabling conflicts; it repackages them.” It further argues that appointment of an examiner would displace little completed work because the special committee had either not begun or had barely begun its investigation.

The Noteholders also point to the proposed DISH Plan, which initially included Hughes as a “Releasing Party” and therefore could have released Hughes’s claims against EchoStar and its affiliates. According to the motion, Hughes and its counsel did not object; the Noteholders identified the provision and secured its removal. They describe Hughes as having been “completely asleep at the switch” while potential estate claims went uninvestigated and argue that allowing the special committee to proceed would require creditors to fund an inquiry controlled by appointees of the investigation’s prospective targets.

The Noteholders contend that examiner appointment is mandatory under section 1104(c)(2) because Hughes has $750.0mn of fixed, liquidated, non-insider unsecured Notes, far above the statute’s $5.0mn threshold. Their proposed order would require an independent examiner to submit a work plan, timetable and budget within 14 days; obtain access to documents, witnesses and privileged materials; investigate the identified transactions and any additional irregularities uncovered; and report before the Court considers any Plan, Disclosure Statement, settlement or release affecting those claims.

From the Filings

The examiner motion [Docket No. 93] provides: "The Noteholders are holders of more than 69.6% of the outstanding principal amount of Hughes’s $750 million 5.25% Senior Secured Notes (the ‘Secured Notes’) and more than 88.79% of the outstanding principal amount of Hughes’s $750 million 6.625% Senior Notes (the ‘Unsecured Notes’ and, together with the Secured Notes, the ‘Notes’). Many of the Noteholders individually rank among the largest creditors in these cases. In the aggregate, the Noteholders hold claims that are a multiple of the remaining claims. 

The Noteholders seek the appointment of an examiner at this crucial juncture of these cases to have a true independent individual, appointed by the Office of the United States Trustee of the Southern District of Texas (the ‘U.S. Trustee’) and approved by this Court, investigate claims arising from a series of self-dealing transactions between the Debtors and their controlling shareholder, EchoStar, that transferred assets for no or inadequate consideration and intended to benefit EchoStar at the expense of Hughes and its creditors. As discussed more fully below, these self-dealing transactions include, among others, (a) EchoStar forcing Hughes, beginning in December of 2023, to lease the Jupiter 3 Satellite from EchoStar’s subsidiary, EchoStar XXIV LLC, for a rental rate of approximately $191 million annually, which is grossly inflated and above market, (b) the EchoStar controlled board of Hughes authorizing the distribution of $1.029 billion in dividends to EchoStar in the first quarter of 2024, (c) EchoStar causing Hughes to make a $196 million cash payment to EchoStar in 2024 purportedly tied to income taxes, and (d) EchoStar entering into an agreement with Space Exploration Technologies Corp. (‘SpaceX’) to, among other things, (i) refer the Debtors’ subscribers to SpaceX for a referral fee that potentially may be retained by EchoStar (public disclosures are unclear as to which entity receives the referral fee) and (ii) acquire certain satellite assets and regulatory authorizations owned by the Debtors.

Together, the transactions stripped more than $1.5 billion in assets from Hughes (excluding more than $200 million of statutory interest on the distribution claims), which EchoStar and its affiliates used to their own benefit while leaving Hughes insolvent and, in particular, unable to pay its debts as they became due. Prejudgment interest on the claims adds more than $200 million to the estates’ claims, further underscoring the magnitude of the harm.

The Debtors, however, cannot be faithful stewards of these causes of action because their controlling shareholder and conflicted board of directors approved these transactions. The Debtors are controlled by EchoStar, which in turn is controlled by Charles W. Ergen, EchoStar’s controlling shareholder and the Chairman of both Hughes and EchoStar. When the relevant transfers occurred, two of the three members of Hughes’s board of directors—Mr. Ergen and Hamid Akhavan—simultaneously served on EchoStar’s board and the third, Mr. Paul Gaske, was the Debtors’ Chief Operating Officer. Mr. Akhavan has since resigned, and Mr. Gaske has since retired, leaving Mr. Ergen as Chairman and sole director of Hughes, prior to the recent appointment of directors self designated as ‘independent.’

Mr. Ergen maintains complete and unchecked control given his position as Chairman of both Hughes and EchoStar, his control of approximately 90.4% of EchoStar’s voting equities, and his ability to add or remove any Hughes directors at any time for any reason. Mr. Ergen likewise maintained, at all times during the periods in question, complete control of Hughes, a wholly-owned subsidiary of EchoStar with no independent directors. Neither he nor anyone whom he might appoint can be expected to authorize or credibly investigate litigation against himself, EchoStar, or any of EchoStar’s subsidiaries.

Prior to the petition date, the Debtors have done nothing to pursue these claims. To the contrary, they have been completely asleep at the switch as these transfers from Hughes to EchoStar served Mr. Ergen’s economic interests. In the recent DISH DBS Corporation and DISH Wireless LLC bankruptcy proceeding, the proposed plan of reorganization included Hughes as a ‘Releasing Party’—a provision that, if confirmed, would have released all of Hughes’s claims against EchoStar and its affiliates without any consent by or benefit to Hughes or its creditors.

Hughes took no action to protect itself—despite the fact that it is represented by the same law firm that is representing the DISH Debtors in their chapter 11 proceedings. Instead, it was the Noteholders who identified the issue, objected, and ensured that the provision was corrected to remove the Debtors as Releasing Parties under the DISH plan, thereby preserving claims well in excess of $1.5 billion for the estates at a time when Hughes’s own fiduciaries were not paying attention.

The Debtors attempt to get around this conflict by appointing two additional ‘independent’ directors on the eve of bankruptcy who have charged themselves with investigating and dealing with any estate claims arising from these transactions. This is not a substitute for a genuinely independent examiner for many reasons. First, the last of the transactions that require investigation occurred more than a year ago. If Hughes or anyone controlling it was genuinely interested in investigating any aspect of these transactions and asserting relevant claims, they have had ample opportunity to do so.

Even after admitting in publicly filed financial statements that Hughes could not pay its debts as they became due and that EchoStar could not be counted on to assist Hughes in paying its debts (likely filed long after these facts were understood), Hughes did nothing to investigate the causes of its predicament or address the conflicts infecting its board. That it seeks to use creditor resources, including scarce cash collateral, to conduct a late investigation only serves as evidence that Hughes’s sudden interest in an investigation now is motivated by something other than estate maximization.

In any event, there is no assurance whatsoever that the individuals appointed by Mr. Ergen for Hughes, whether or not facially independent, will act independently. Unfortunately, in many cases, directors appointed as ‘independent’ fail to act independently or competently. See, e.g., In re First Am. Health Care of Ga., 208 B.R. 992, 994–95 (Bankr. S.D. Ga. 1996) (sua sponte appointment of an examiner where prior management committed fraud and selected current management for the debtor that ‘creates a fog of uncertainty surrounding the issue of the independence of current management’); In re Wesco Aircraft Holdings, Inc., Adversary No. 23-3091 (MI), 2025 WL 354858, at *9, n.4 (Bankr. S.D. Tex. Jan. 15, 2025) (‘Although Mr. Bartels was appointed as an independent director, evidence admitted at trial suggests that he did not act independently’); In re Innkeepers USA Trust, 442 B.R. 227, 232–33 (Bankr. S.D.N.Y. 2010) (Court found professional chief restructuring officer not credible in providing testimony concerning a plan support agreement he negotiated on behalf of the debtors, finding that ‘[t]he testimony of Mr. Beilinson on these points reveals only that Lehman wielded great power in the negotiations and that Mr. Beilinson seems to have succumbed to virtually all of their demands’).

General Background

Petition Date Highlights

• The EchoStar-owned satellite communications business files with approximately $1.5bn of Senior Notes, $51.0mn of intercompany principal obligations and $61.2mn of cash; no RSA or immediate DIP financing is in place.
• LEO competitors have moved into Hughesnet’s rural markets with a product Hughes says exceeds GEO broadband on the metrics that matter most to consumers: speed and latency. Subscribers fell 21.7% in one year to approximately 641,000, and the Debtors state that they “do not expect this trend to reverse” because LEO competition is “structural, not cyclical.”
• Hughes is seeking to replace a consumer-dominated business model with an enterprise and government-led platform. The transition is supported by approximately $1.5bn of contracted enterprise backlog, while the declining consumer operation is expected to remain cash-generative and finance investment in the growth businesses.
• The Debtors could not make the August 3rd payment on $750.0mn of 5.250% Senior Secured Notes and $750.0mn of 6.625% Senior Unsecured Notes and did not reach a standstill, refinancing or restructuring agreement before filing.
• An ad hoc group represents that its members hold approximately 80% of the aggregate principal amount of the two Senior Notes tranches combined. The Declaration does not identify the beneficial holders or disclose how the group’s holdings are divided between the secured and unsecured notes.
• The ad hoc group has also alleged potential claims concerning the JUPITER 3 affiliate lease, $1.029bn of 2024 dividends to EchoStar, approximately $196.0mn of tax reimbursements and Hughes’ referral of subscribers to SpaceX. An independent special committee has been appointed to investigate.
• Hughes seeks immediate cash-collateral authority rather than DIP financing. The ad hoc group separately objected to an expedited hearing process, including expedited relief permitting use of cash collateral securing the Senior Secured Notes.

Filing Date Summary

Hughes filed Chapter 11 immediately before payment became due on approximately $1.5bn of Senior Notes that matured on August 1st. Because that date fell on a Saturday, the applicable indentures deferred payment until Monday, August 3rd. Hughes says it lacked the cash or committed financing required to repay the notes and had been unable to access the capital markets on acceptable refinancing terms. Prepetition negotiations with an ad hoc group representing approximately 80% of the notes failed to produce either a standstill or an agreed restructuring.

That is the immediate trigger. 

Hughes Satellite Systems entered Chapter 11 after the competitive premise supporting its legacy consumer business ceased to hold. The Company built Hughesnet around rural and underserved customers for whom satellite broadband was not necessarily the preferred service, but the only practical service available. Hughes’ GEO satellites could cover areas beyond cable, fiber and DSL networks, but delivered comparatively slow service because signals had to travel approximately 22,300 miles to orbit and back. The arrival and expansion of LEO constellations changed that market. SpaceX, Amazon Leo and other operators can offer lower latency and higher speeds from satellites operating much closer to Earth. The Debtors acknowledge that those competitors now offer a product that exceeds GEO broadband on the performance characteristics most important to consumers—speed and latency—and have moved directly into the North American and Latin American markets Hughes historically served.

The result is not presented as a temporary downturn. Hughes had approximately 641,000 broadband subscribers at filing, down 21.7% from approximately 819,000 as of June 30, 2025. The Del Genio Declaration states that the Company “does not expect this trend to reverse” and that LEO competition is “structural, not cyclical,” with competitors continuing to broaden coverage and reduce consumer costs. Subscriber losses have reduced revenue without producing corresponding reductions in satellite lease expense, ground infrastructure costs or network operating expenses. Hughes reported a 2025 net loss of approximately $1.274bn, driven largely by the deterioration of consumer broadband and a significant non-cash impairment charge. Between July 24th and July 28th, the Debtors notified approximately 400 employees that their positions would be terminated, with most departures expected in late September after a 60-day transition period.

Faced with the collapse of its existing business model, management is developing a multi-year business plan intended to shift the Company from a consumer-dominated satellite broadband provider into an enterprise and government-led connectivity platform. The growth businesses include managed enterprise networks, cybersecurity, private 5G, multi-orbit in-flight connectivity, defense and intelligence communications, satellite ground equipment and managed infrastructure for LEO operators. Hughes points to approximately $1.5bn of contracted enterprise backlog, recent airline and defense awards and its developing position as a ground-infrastructure and managed-services provider for LEO systems. The shrinking consumer business remains cash-generative, but its proposed role has changed: rather than serving as the Company’s strategic center, it is expected to fund investment in the enterprise and government operations that management expects eventually to become the predominant source of revenue.

That commercial reset collided with the maturity of Hughes’ entire public-debt capital structure. The Company had $750.0mn outstanding under its 5.250% Senior Secured Notes and another $750.0mn under its 6.625% Senior Unsecured Notes, with approximately $44.3mn of additional accrued and unpaid interest. Both series matured on August 1st, with payment becoming due Monday, August 3rd because the maturity date fell on a Saturday. Hughes lacked the approximately $1.5bn required to repay the notes, had no committed financing and could not access the capital markets on workable refinancing terms. The Debtors also had $51.0mn outstanding under secured and unsecured intercompany loans from EchoStar entered into in February to finance historical JUPITER 3 rent that Hughes had not timely paid.

The Debtors and an ad hoc group exchanged proposed terms for a standstill or forbearance that would have allowed negotiations to continue beyond the maturity. The group represents that its members hold approximately 80% of the aggregate principal amount of the Senior Notes. That percentage applies to the $1.5bn secured and unsecured notes collectively; the Declaration neither names the beneficial holders nor states how much of the $750.0mn secured tranche or $750.0mn unsecured tranche the group controls. The parties failed to agree on a standstill, refinancing or restructuring before the payment date. Hughes therefore filed without an RSA, Plan, agreed capital-structure transaction or immediate DIP facility.

The creditor dispute was already broader than the debt maturity. On July 21st, counsel to the same ad hoc group delivered a letter challenging transactions between Hughes, EchoStar and other non-Debtor affiliates. The group alleges that the JUPITER 3 lease requires above-market payments, that Hughes transferred approximately $1.029bn to EchoStar through dividends in February and March 2024, that it reimbursed EchoStar for approximately $196.0mn of income taxes during 2024 and that Hughes referred consumer subscribers to SpaceX in connection with EchoStar’s spectrum sale. The letter asserts potential fraudulent-transfer and fiduciary-duty claims against EchoStar, certain subsidiaries and former Hughes directors and officers, including Charles W Ergen. The Debtors dispute the allegations, but appointed two independent directors and established a special committee with exclusive authority to investigate, prosecute, settle or release potential affiliate claims. The group also advised the Court before filing that it opposed an expedited first-day process, including expedited authority to use collateral securing the Senior Secured Notes.

DIP Financing

The Debtors are not currently seeking DIP financing. As of the Petition date, Hughes held approximately $61.2mn of cash and cash equivalents on a bank basis and says its operations continue to generate cash through the JUPITER consumer broadband platform and growing enterprise and government revenue. The Debtors reserve the right to seek a DIP facility if available cash and cash collateral become insufficient to support operations and case administration.

Hughes instead seeks interim and final authority to use cash collateral in which holders of the Senior Secured Notes may assert an interest. Proposed uses include employee compensation and benefits, ground infrastructure and satellite lease expenses, critical vendor payments, network-maintenance capital expenditures and Chapter 11 administrative costs.

The Debtors propose to provide the secured noteholders with replacement liens, section 507(b) superpriority claims to the extent of any diminution in collateral value and budget and variance-testing protections. Hughes says the secured collateral may encompass substantially all real and personal property, receivables, equipment, inventory, intellectual property, orbital-slot licenses, regulatory authorizations, investment property and deposit accounts.

The Del Genio Declaration warns that denial of immediate cash-collateral access would leave the Debtors with “no alternative but an immediate liquidation,” interrupt satellite services and impair obligations to enterprise and government customers.

Events leading to the Chapter 11 Filings

In a declaration in support of first day filings (the “Del Genio Declaration”) [Docket No. 4], Robert Del Genio, the Debtors’ chief restructuring officer, describes a business forced into a fundamental commercial retreat before it could address a wall of maturing debt. Hughes’ consumer franchise was built in markets where rural customers accepted GEO satellite latency because they had no meaningful broadband alternative. LEO operators have now entered those markets with faster and lower-latency service, stripping Hughes of the competitive premise on which its consumer business was built. The subscriber decline has been rapid, while satellite, gateway and network costs remain largely fixed. Hughes does not forecast a consumer recovery; it is developing a new business model centered on enterprise, government, defense, aeronautical and satellite-technology operations, funded in part by cash harvested from the declining consumer platform. The transition remained incomplete when both $750.0mn Senior Notes tranches matured. Without the cash to pay, access to refinancing or an agreement with an ad hoc group holding approximately 80% of the notes, Hughes filed on the eve of the payment deadline.

Drilling down, Del Genio provides: “Historically, demand in the consumer satellite broadband market was driven by necessity, not preference. Rural households and remote businesses throughout the United States and Latin America—areas then beyond the practical reach of cable, fiber, or digital subscriber line infrastructure—depended on satellite broadband as their only practical connectivity option. The Company built its consumer business in these underserved markets....“That calculus has now changed as competitors that have successfully deployed LEO satellite constellations have established themselves in the market, including Space Exploration Technologies Corp., Amazon Leo, and other operators. LEO satellites, operating at altitudes between approximately 340 and 1,200 kilometers above the Earth—a fraction of GEO altitude—deliver much faster service with latency typically in the range of 20 to 40 milliseconds, approaching terrestrial broadband performance, and with data speeds competitive with those provided by cable and DSL.

As LEO constellations have expanded and reduced costs for consumers, the Company’s competitors have directly entered markets that it historically served—offering a product that exceeds GEO broadband on the performance metrics that matter most to consumers: speed and latency. Competitors have achieved significant scale and coverage across North America and Latin America, competing directly with the Company’s HughesNet service....“As of the Petition Date, the Company had approximately 641,000 broadband subscribers, a significant decline of approximately 21.7% from even one year ago (approximately 819,000 broadband subscribers as of June 30, 2025), reflecting the intensifying competitive dynamics described above. The Company does not expect this trend to reverse. LEO satellite competition is structural, not cyclical, and the Company’s competitors continue to expand coverage and reduce costs.

The decline in the Company’s consumer subscriber base has affected its financial results, reflecting the ongoing transition of the consumer broadband market and the Company’s fixed cost structure, which includes satellite lease obligations, ground infrastructure operating costs, and network operations expenses that do not decrease proportionately with declining consumer subscriber volumes. Ultimately, for the fiscal year ended December 31, 2025, the Company reported a net loss of approximately $1.274 billion, driven largely by revenue declines in its consumer broadband business and a significant non-cash impairment charge.”

Rather than projecting a recovery in consumer broadband, Del Genio describes a change in the Company’s center of gravity: "Looking forward, the Company’s management team and professionals are in the process of developing a multi-year business plan that is expected to shift the Company’s revenue mix from a consumer-dominated business to an enterprise and government-led platform, as those customers—which represented a growing share of 2025 revenue—are expected to become the predominant source of the Company’s consolidated revenue in the future....The viability of that strategic transition is supported by the Company’s approximately $1.5 billion contracted enterprise backlog, recent contract awards from commercial airlines and U.S. defense agencies, and the Company’s growing role as a multi-orbit ground infrastructure and managed services provider for LEO satellite operators. The Company’s consumer broadband business, while materially declining, remains cash-generative and is expected to fund the Company’s continued investment in these higher-growth enterprise and government opportunities during the pendency of these Chapter 11 Cases and beyond.”

Turning to the immediate filing trigger, the Declaration provides: “The Senior Notes were scheduled to mature on August 1, 2026. As of the Petition Date, the Debtors do not have the approximately $1.5 billion necessary to repay the Senior Notes at maturity. The Debtors do not have committed financing to fund these obligations and have been unable to access capital markets on terms that would allow them to refinance....In advance of the Petition Date, the Debtors and their advisors engaged in discussions with the Ad Hoc Group and its advisors regarding a potential restructuring of the Debtors’ funded indebtedness, including exchanging term sheets reflecting proposed terms for a forbearance agreement to allow those discussions to continue and potentially avoid the need to file these Chapter 11 Cases. Those discussions have not yet produced agreement on the terms of a consensual restructuring.”

The same creditor group also raised the affiliate-transaction dispute: “On July 21, 2026, the Debtors received a letter from counsel to the Ad Hoc Group...raising a number of allegations concerning certain prepetition transactions between the Debtors and EchoStar and its non-Debtor subsidiaries, including allegations relating to (a) the terms of the J3 Satellite Lease with EchoStar XXIV, which the Ad Hoc Group contends requires above-market payments by the Debtors; (b) cash dividends totaling approximately $1.029 billion paid by the Debtors to EchoStar in February and March 2024; (c) income tax reimbursements of approximately $196 million made by the Debtors to EchoStar in 2024; and (d) the referral of the Company’s consumer subscribers to SpaceX in connection with EchoStar’s sale of certain spectrum assets to SpaceX."

The Debtors do not concede those allegations. The Declaration states that the special committee will conduct a full investigation and that no first day relief is intended to prejudice potential claims.

EchoStar Affiliate Transactions and Special Committee

The filing also opens with a developed dispute between the Debtors and the ad hoc noteholder group over transactions involving EchoStar and its non-Debtor subsidiaries.

According to the Del Genio Declaration, counsel to the ad hoc group delivered a July 21st letter alleging potential claims arising from: (i) the JUPITER 3 satellite lease with EchoStar XXIV L.L.C., which the group contends requires above-market payments; (ii) approximately $1.029bn of cash dividends paid by Hughes to EchoStar in February and March 2024; (iii) approximately $196.0mn of income-tax reimbursements paid to EchoStar during 2024; and (iv) Hughes’ referral of consumer subscribers to SpaceX in connection with EchoStar’s sale of spectrum assets to SpaceX. The letter asserted potential fraudulent-transfer and fiduciary-duty claims against EchoStar, certain subsidiaries and former Hughes directors and officers, including Ergen.

The Debtors do not concede the allegations and reserve all rights. On July 28th, HSSC appointed Anthony Horton and Michael Buenzow as independent directors and formed a special committee consisting of those directors. Ergen remains the third member of the HSSC board but is not a member of the special committee.

The special committee has exclusive authority to investigate, prosecute, settle or release potential claims against EchoStar and its non-Debtor subsidiaries. It may also evaluate and approve restructuring, financing or sale transactions presenting an actual or potential conflict between Hughes and EchoStar. Kirkland & Ellis has been retained as its independent counsel.

The Debtors emphasize that the Hughes estates are separate from EchoStar and the DISH Debtors. Hughes-generated cash will be used for the Hughes estates and creditors and will not fund EchoStar, DISH or another non-Debtor affiliate absent further Court authority.

Prepetition Indebtedness

As of the Petition Date, the Debtors had approximately $1.5bn of funded debt under the Senior Notes, plus $51.0mn in principal obligations under two 2026 intercompany financing agreements. Accrued and unpaid interest on the two Senior Notes series totaled approximately $44.3mn.

• 5.250% Senior Secured Notes due August 1, 2026. HSSC issued $750.0mn of Senior Secured Notes pursuant to a July 27, 2016 indenture. Wilmington Savings Fund Society, FSB succeeded U.S. Bank Trust Company, National Association as indenture trustee and collateral agent on July 31st. The notes may be secured by substantially all assets of HSSC and the subsidiary guarantors and are jointly and severally guaranteed by those guarantors. As of the Petition Date, the full $750.0mn principal amount remained outstanding, together with approximately $19.6mn of accrued and unpaid interest. EchoStar purchased approximately $123.0mn of the Senior Secured Notes in open-market transactions during 2025.
• 6.625% Senior Unsecured Notes due August 1, 2026. HSSC issued $750.0mn of Senior Unsecured Notes pursuant to a July 27, 2016 indenture, with U.S. Bank Trust Company, National Association serving as trustee. The notes are jointly and severally guaranteed by the subsidiary guarantors. As of the Petition Date, the full $750.0mn principal amount remained outstanding, together with approximately $24.7mn of accrued and unpaid interest.
• 2026 Intercompany Loans. In February 2026, HSSC and EchoStar entered into two financing agreements to fund historical JUPITER 3 lease payments that Hughes owed but had not timely paid. The arrangements consist of a $50.0mn secured financing agreement and a second unsecured financing agreement with an initial principal amount of $1.0mn, plus certain accrued interest under the secured agreement. Both accrue interest at 13.75% per annum and mature upon the earlier of a demand for payment or August 1st. The full principal amount remained outstanding as of the Petition Date. The loans relate to Hughes’ lease of all capacity on the JUPITER 3 satellite from non-Debtor EchoStar XXIV. The initial seven-year operating lease requires monthly payments of approximately $15.9mn. Hughes also makes periodic payments of approximately $6.0mn per month to Debtor EchoStar Orbital L.L.C. for use of the JUPITER 2 satellite.
• Unsecured Debt. The Debtors’ top 30 unsecured creditor list includes claims totaling approximately $791.2mn. The total consists of the $774.7mn U.S. Bank claim and 29 trade claims aggregating approximately $16.5mn.

Key Prepetition Shareholders

EchoStar Corporation directly owns 100% of HSSC. HSSC directly or indirectly owns each of the other Debtors.

Charles Ergen is identified as HSSC’s principal executive officer and as EchoStar’s co-founder, chairman, president and chief executive officer.