Dish DBS is preparing to file for Chapter 11 bankruptcy to restructure $25 billion in debt, according to WSJ sources. The satellite TV unit of EchoStar has backing from major bondholders for a plan that includes selling spectrum licenses to AT&T and SpaceX.

The filing comes after EchoStar's failed merger attempt with DirecTV, which would have formed the world's largest pay-TV distributor. Dish DBS has been bleeding subscribers and facing creditor litigation.

The bankruptcy is designed to resolve legal disputes while offloading valuable spectrum assets to telecom and satellite players.