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Iridium, Motorola in talks to reach settlement; status hearing set for Dec. 18
By Reshmi Basu
New York, Oct. 24 - Lawyers for Iridium LLC's unsecured creditors and Motorola Inc. told a federal judge Wednesday that they were in discussions toward reaching a consensual agreement, that if reached, would eliminate the need for phase 2 of a trial between the parties.
The lawyers asked that Wednesday's status hearing be adjourned until Dec. 18.
The trial has been divided into two stages. The first phase dealt with the solvency of the company while the second half will deal with allegations that Motorola breached its contract of fiduciary duty.
In the event that a resolution is not reached, phase 2 will take place on Feb. 12.
In August, judge James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York dismissed four of the eight claims brought by Iridium's statutory committee of unsecured creditors against Motorola, saying that the creditors had failed to prove that Iridium was insolvent leading up to its failed satellite phone system in 1998.
Creditors have sought to recover at least $3.45 billion from Motorola, arguing that the company was liable for Iridium's meltdown because it unloaded a poor business plan and enormous debt upon the start-up and that the creditors were therefore entitled to billions of dollars in recouped losses.
Iridium owned and operated a global telecommunications system. The company filed for bankruptcy on Aug. 13, 1999 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 99-45005.
The adversary case is Statutory Committee of Unsecured Creditors vs. Motorola Inc., 01-02952, which is also being heard in New York.
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