Motorola Settles Iridium Suits for $12M
Posted on: Thursday, 6 March 2003, 06:00 CST
Motorola Settles Iridium Suits for $12M
source: Associated Press Tech News
SCHAUMBURG, Ill. - Motorola Inc. said Thursday it will pay $12 million to settle the five remaining lawsuits by Chase Manhattan Bank concerning its ill-fated involvement with satellite phone company Iridium LLC.
A lawsuit by unsecured Iridium creditors who seek more than $4 billion from Motorola is still pending.
Motorola created the Iridium system and was a major shareholder in Iridium LLC, but the 66-satellite network ended up in bankruptcy in 1999 less than a year after launching service, laden with debt and deemed obsolete.
The agreement includes settlement of a lawsuit claiming that Motorola and Iridium "fraudulently induced" Chase and 17 other lenders of Iridium LLC to enter into a credit agreement. The lawsuit had sought the entire unpaid balance of the $800 million loan plus interest and expenses.
The other claims and counterclaims resolved had involved smaller amounts.
Under the terms of the agreement, Motorola is to pay the additional $12 million to Iridium and its secured lenders.
Iridium's assets were purchased in bankruptcy in December 2000, and the company relaunched operations in 2001 as Iridium Satellite LLC. Iridium remains in operation, helped largely by a big Pentagon contract.
Motorola shares fell 21 cents to close Thursday at $8.05 on the New York Stock Exchange.
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