Dish Creditors Send Letter to Company Alleging Debt Swap Fraud

A group of Dish Network Corp. creditors sent a letter to the company’s board alleging that the satellite television provider’s restructuring plan is illegal, and threatening legal action if the deal isn’t reversed, according to people with knowledge of the situation.

The creditor group, working with law firm Milbank, argued in the letter sent Friday that the company’s plan to swap nearly $10 billion of debt for new secured notes violates debtholder agreements, said the people, who asked not to be identified because the communications are private. The letter also alleges that Dish’s move to transfer prized collateral away from existing creditors could be considered fraudulent, and an illegal dividend.