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Technology Stocks : Loral Space & Communications

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From: fairgame	5/17/2005 10:13:01 AM
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Loral insurance settlement OK'd Daily Deal/The Deal May 16, 2005 Loral insurance settlement OK'd The agreement with 14 insurers enables the company to recover $93 million for a botched satellite launch. A judge has approved Loral Space & Communications Ltd.'s settlement with 14 insurers that allows the company to recover $93.3 million for a botched launch of a satellite. The bankrupt satellite communications company would receive 82% of a $113.6 million claim filed with the insurers. The settlement only covers a fraction of the liability. Loral bought insurance from a syndicate of more than 20 insurers for $250 million. If Loral reaches a similar agreement with the remaining insurers, it would recover $205 million under the policy. Loral said it is continuing to negotiate with the other insurers Sea Launch Co. LLC of Long Beach, Calif., launched Loral's Telstar 14/Estrela do Sul 1 satellite on Jan. 10, 2004, to provide coverage in Brazil and the rest of Latin America. But its North Polar array only partially deployed, severely limiting power. As a result, only 15 of the bird's 41 transponders are available for service and the satellite's life expectancy has fallen from 15 years to about seven. When Loral filed a claim for full payment, the insurers said the satellite was only a partial loss and they are liable only for a percentage of the insured amount. Judge Robert D. Drain in the U.S. Bankruptcy Court for the Southern District of New York in Manhattan signed the order May 10. Loral has also asked Drain to extend its exclusivity for another two months, from May 31 to Aug. 1. A hearing on the extension and Loral's disclosure statement is set for June 1. In March, Loral Space filed its third amended reorganization plan and disclosure statement that would give creditors ownership of the company. Loral sold its North American satellite fleet in March 2004 to Intelsat Ltd. Loral filed for Chapter 11 protection July 15, 2003 in the New York court.

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