Iridium is still haunting Motorola. After the crash and burn (no pun intended) of the mobile satellite company in 1999 and subsequent bankruptcy, Iridium's creditors are now seeking a return of some $3.7 billion plus interest that Motorola got from them for building the satellite network. A federal bankruptcy court will begin a trial on Oct. 23 in Manhattan to determine how much Motorola is to blame for Iridium's downfall. What the creditors are asserting sounds pretty outlandish: That Motorola "devised and orchestrated" a "multi-million dollar scheme" to fund the development of satellite technology that Motorola would control and could sell to other players--raking in billions in contracts to build and run the network while passing the risk that the business would fail onto outside investors. They claim Motorola controlled most aspects of Iridium's business, including securities filings and press releases. Um, excuse me. I remember when a number of some pretty smart analysts thought that satellites were going to replace every cellular system in the world. Satellite companies, not just Iridium, were the hottest companies around. Hence, not just Iridium fell into bankruptcy.
To read more about Iridium creditors seeking money from Motorola:
- take a look at this report from The Wall Street Journal (sub. req.)