DISH DBS today (1 July) failed to get conditional disclosure statement approval at its first day hearing, facing stiff opposition from certain unsecured creditors arguing the cases should be bifurcated.

DISH entered Chapter 11 yesterday (30 June) armed with what it called a prepackaged plan covering “DISH DBS” debtors as well as “DISH Wireless” entities. The company sought conditional approval of its disclosure statement, signoff for solicitation procedures, and the setting of a confirmation schedule today.

However, multiple wireless infrastructure providers with sizable, asserted claims against DISH Wireless argued today that they represent a significant dissenting class, that the cases are not a true prepack, and that the debtors engineered a consensus via an insider claim with an intercompany loan. Brian Hermann of Paul Weiss, for infrastructure company Crown Castle, said his client holds a USD 3.5 billion damages claim against DISH Wireless, making it a substantial creditor.

He argued that DISH DBS and DISH Wireless are actually two separate restructurings, and that the case “bears no resemblance” to a prepack because on the Wireless side, significant creditor discord still exists among other issues. He also argued that the disclosure statement lacks sufficient information, and that conditional approval should be denied on those grounds. He said he would have “no idea” what his client is voting on if the documents went out in their current form. He further argued that the disputes between his client and the Wireless debtors are complex and require more time to resolve than the truncated claims reconciliation process plotted out by the debtors.

The company pushed back, arguing that the infrastructure provider claims are disputed and that they were solicited for votes prepetition.

“Just because Mr. Hermann says a thousand times ‘it’s not a prepack,’ doesn’t make it so,” said Charles Koster of White & Case, representing the debtors.

Dan Forman of Ropes & Gray, representing infrastructure counterparty American Tower, said his client is owed over USD 2bn. Along with echoing Hermann’s overall arguments, Forman accused the debtors of roping in Wireless and that seeking a sale of its assets to an insider, EchoStar, is a “catch and kill” plan meant to erase potential claims against the parent.

“I don’t have a better way to describe this,” Hermann argued, “this is crazy.”

Both Hermann and Forman also pushed back on the debtors’ request that the case skip over the appointment of an unsecured creditors committee. Hermann said his client would seek a spot on the group, if appointed.

Ultimately, Judge Christopher Lopez of the US Bankruptcy Court for the Southern District of Texas said he could not comfortably approve solicitation today, indicating that he was convinced the Wireless debtors’ creditors at least needed more time to process the plan, disclosure statement, and proposed sale. He granted several forms of more traditional operational relief, however, including permission to continue under shared services agreements and to pay critical vendors.

While DISH sought DIP financing, it has enough money on hand to finance its operations through the initial stages of bankruptcy and did not seek approval of the postpetition facility today. Instead, it will seek final approval at the second-day hearing on 23 July. EchoStar has agreed to provide the USD 85m facility.

DISH asserted that its restructuring support agreement (RSA), backed by approximately 88% of noteholders, would resolve about USD 9.75bn of funded debt. The debtors began soliciting votes before filing on 29 June, with a 7 August voting deadline and tabulation scheduled for 13 August.

The prepackaged plan is designed to implement the March RSA by deleveraging the balance sheet, reducing funded debt, and amending note terms while leaving general unsecured and intercompany claims unimpaired. Impaired classes consist primarily of secured and unsecured notes due between 2026 and 2029, which are entitled to vote, while other stakeholders are deemed to accept. The plan is structured to achieve confirmation on an expedited timeline and avoid a prolonged in-court restructuring.

DISH DBS, which filed for Chapter 11 protection on Tuesday (30 June), has described a deterioration tied to the collapse of its standalone 5G strategy, after regulatory pressure forced the sale of key spectrum assets and rendered its nationwide network inoperable. The company has begun decommissioning more than 24,000 tower sites and faces billions of dollars in disputed claims from infrastructure counterparties. Those pressures come alongside longer-term challenges in the pay-TV business and prior creditor disputes tied to restructuring transactions at the parent level.