Ad hoc groups of DISH Network crossholders and convertible noteholders have drafted an agreement to band together in potential negotiations with the company, according to 9fin sources.

The groups are exploring legal options, including default notices under certain issuances, after DISH shifted prized assets into a newly created unrestricted subsidiary and launched two coercive exchanges as part of the company’s merger with Echostar.

The asset move created optionality for DISH, which has high funding needs in its bid to transition from a satellite TV business into a wireless services company. But it also dampened recovery prospects for existing DISH secured and unsecured debtholders, according to S&P’s downgrade on 12 January.

Market participants were roiled by the aggressive debt maneuvers, setting the stage for a potential lengthy battle with billionaire Charlie Ergen’s business empire. DISH DBS's notes due 2026 are quoted at around 72 cents on the dollar, down from 79 cents on 15 January.

Lazard and Milbank are advising the crossholder group, which has close to $8.5bn of DBS debt, $3.1bn of DISH Network debt and majority of issuances other than the convertible notes, sources said. Meanwhile, Paul Weiss organized certain convertible holders, sources said.

Representatives at DISH, Lazard, and Milbank didn’t respond to requests for comment.