EchoStar’s operational upheaval continued this week as its Hughes Satellite Systems subsidiary filed for Chapter 11 bankruptcy protection, a move that comes a month after its Dish subsidiary filed for similar bankruptcy protection.

EchoStar CEO Charlie Ergen noted during the company’s second-quarter earnings call that the Hughes filing was tied to $1.5 billion in upcoming bond payments.

“We had discussions with the bondholders but weren't able to come up with a workable solution, so we filed Chapter 11 bankruptcy this morning for Hughes,” Ergen said during the earnings call.

Ergen added that the filing is specific to Hughes, and “does not include EchoStar Corporation or other non-Hughes subsidiaries or even Hughes international entities,” and that the filing means “we're paying our employees, we're delivering for customers and channel partners as usual, and we expect to fulfill all ongoing forward commitments to our vendors.”

EchoStar’s Hughes operations have been financially and operationally challenged.

The company’s “broadband and satellite services” division reported a near 7% drop in revenues for the second quarter compared to the same period last year, though operating income did surge from a loss of $36.7 million last year to a gain of $50.5 million this year. EchoStar lost approximately 59,000 connections during the most recent quarter due to lower gross connection additions and “increased competition,” ending the second quarter with around 622,000 segment connections.

The Hughes bankruptcy filing follows EchoStar’s playbook for its Dish division. That subsidiary filed for bankruptcy protection at the end of June, a move that was caught between a pending debt payment and EchoStar waiting to close on a $23 billion spectrum sale to AT&T.

The spectrum sale closed last week, with EchoStar gaining access to just over $20 billion in cash. The company routed some of those proceeds to pay off the existing term loan debt and another $2.4 billion to fund payment of outstanding bills. EchoStar noted in its latest Securities and Exchange Commission (SEC) 10-Q filing that it expects Dish to emerge from bankruptcy protection “during the second half of 2026.”

Executive exodus continues

Outside of its financial hurdles, EchoStar also announced that COO Paul Gaske resigned from all official roles with the company but will remain a senior advisor during a transition period. Gaske took on the EchoStar COO role in early 2023, having previously spent nearly 46 years in various roles at Hughes.

EchoStar also appointed new executives to oversee the Hughes operations. Robert Del Genio will assume the chief restructuring officer title; Ramesh Ramaswamy is taking on the EVP and GM role at Hughes; and Michael Buenzow and Anthony Horton were appointed as independent directors of that division.

Those moves come less than a month after Hughes and EchoStar Capital CEO Hamid Akhavan also resigned from those positions.