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Iridium granted exclusivity extension; mediation with Motorola to start in early February
By Reshmi Basu
New York, Dec. 18 - Iridium LLC obtained court approval Tuesday for an extension to its exclusive periods to file a plan of reorganization.
The exclusive plan-filing period was extended to March 14 from Dec. 21.
In other news, lawyers for Iridium unsecured creditors and Motorola Inc. have agreed to enter into mediation in hopes of reaching a consensual agreement over allegations that Motorola breached its contract of fiduciary duty.
James J. White, a professor of law at the University of Michigan, has been selected as the mediator.
The mediation will start in early February.
If a resolution is not reached, phase 2 of the trial is expected to begin. However, a new date has not been set.
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. 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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