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Less than two weeks after dismissing allegations of wrongdoing made by director James Dondero, Motient Corp. is accusing the board member of trying to drive down the value of the wireless communications company in order to take it over. Motient said Thursday it has filed two lawsuits against Dondero, president of Highland Capital Management, a Dallas investment firm that has three lawsuits pending against the company. A Highland spokesman said the company’s move came as no surprise, characterizing it as “a case of pointing the finger at the messenger” rather than addressing the substance of his complaints. “Dondero intends to vigorously defend himself against these meritless claims,” the spokesman said. In separate actions filed in state and federal courts in Dallas, Motient accused Dondero of leaking confidential information about the company in an effort to manipulate its stock price, waging what amounts to a proxy fight. Dondero, on Motient’s board of directors since July 2002, is spreading “false and misleading” information in a campaign to marshal shareholder opposition against other company directors, according to one of the suits. “We believe James Dondero leaked non-public information to Motient’s shareholders in an effort to drive down Motient’s stock price and, ultimately, attempt to wrest control of the company,” said Motient chief operating officer Christopher Downie by e-mail. On Oct. 7, Motient said it had concluded a 3 1/2 month probe of concerns aired by Dondero in June dealing with transactions Motient engaged in with outside financial advisers. Lincolnshire, Ill.-based Motient responded by forming a committee to explore the matter and hired Chicago law firm Barack Ferrazzano Kirschbaum Perlman & Nagelberg to oversee the probe. Two months into the process, Highland filed two suits, one seeking the return of $90 million the firm had invested in Motient, the other alleging a breach of fiduciary duty and “unjust enrichment” by five of the company’s seven board members and Downie. The spending suits also seek control of Motient on behalf of Highland, which has a 10 percent stake in the company and is its biggest shareholder, and of other investors. Motient plans to form a new board after it gets shareholder approval for a reorganization announced in September. Under the proposal, which Dondero and Highland oppose, Motient would issue nearly $1.9 billion in shares to become sole owner of TerreStar Networks Inc., a McLean, Va., satellite company, and of Mobile Satellite Ventures of Reston, Va. Copyright �2005 TDD, LLC. All rights reserved.

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