Judge clears way for Motorola lawsuits

(Telephony) A U.S. Bankruptcy Court yesterday cleared a path for creditors of Iridium to sue Motorola, the primary backer of the failed satellite communications provider.

The potential suit had been delayed because of a dispute between Iridium’s bank creditors and its other creditors. Bankruptcy court judge Cornelius Blackshear, however, approved a settlement to the dispute. The settlement allows the creditors to establish a company to manage the litigation against Motorola.

The creditors claim that contracts between the two companies were intentionally structured to excessively compensate Motorola for services it to provided Iridium.

Currently, no suit has been filed, said a Motorola spokesman.

“Motorola denies the allegations being made by the creditors and further denies that Motorola has any liability to the creditors of Iridium L.L.C.,” he said.

In addition to denying liability, the spokesman noted that Motorola also is a creditor in the bankruptcy proceedings and that the company operated Iridium’s satellites for months without receiving payments to enable its sale in the bankruptcy process.