ENN Twitter
Motorola settles Iridium bankruptcy cases
NEW YORK (Reuters) - Motorola Inc <MOT.N> said on Tuesday that a U.S. judge had approved a settlement, at no cost to the cell phone maker, related to disputes stemming from the 1999 bankruptcy of satellite service Iridium.
Since 2001, a creditors' committee has been seeking more than $4 billion in damages against Motorola, accusing it of breaches of contract and fiduciary duty related to Iridium's bankruptcy.
In August last year Motorola won a first phase trial, which focused on part of the creditors' claims. The settlement announced Tuesday and approved by Judge James Peck was for remaining cases in the United States Bankruptcy Court for the Southern District of New York.
Motorola, which has been struggling with losses in its cell phone business, said that rather than proceed with an expensive and time-consuming trial, the parties held settlement discussions, including a mediation held in February 2008.
ADVERTISEMENT
Iridium was the pioneer of satellite-based mobile phone services, which allowed users to communicate anywhere in the world via a satellite connection. The company was formed in 1992 and began launching satellites for its service in 1997.
But the company was forced to file for bankruptcy protection in 1999 after it failed to attract customers willing to pay as much as $7 a minute to make phone calls with bulky Iridium phones.
Motorola shares closed down 3.7 percent at $9.82 on the New York Stock Exchange.
(Reporting by Sinead Carew, editing by Richard Chang)