Mobile & Satellite
Motorola and Iridium sued over loans
By Reuters staff
10 November 2001
Chase Manhattan Bank and 17 other lenders are suing Motorola, claiming Motorola and satellite-phone company Iridium LLC fraudulently induced them into loaning Iridium US$800 million, according to regulatory documents filed on Friday.
Iridium, which Motorola created and in which it held an 18 percent stake, received the loan in December 1998 and filed for bankruptcy court protection eight months later, according to the U.S. Securities and Exchange Commission filing.
Chase Manhattan, now part of J.P. Morgan Chase & Co., and the other plaintiffs are seeking recovery of a portion of the unpaid loans from Motorola, according to the SEC documents.
The complaint was filed last month in the Supreme Court of New York, according to the filing.
Iridium LLC's assets were purchased for $25 million in December 2000 by a group of investors who renamed the company Iridium Satellite Corp.
Motorola also faces another lawsuit in U.S. District Court in New York related to the loan, in which the Iridium lenders claim Motorola owes them $300 million under a loan guarantee agreement, as well as interest and legal fees, according to the filing. That case is scheduled to go to trial on Nov. 19.
Motorola officials said they do not agree with Chase's position. |
