- The Washington Times - Tuesday, August 1, 2000

Motorola Corp. won court approval yesterday to destroy District of Columbia-based Iridium LLC's satellites orbiting Earth when the bankrupt company withdrew a motion to stop the move.

But Motorola, the satellite-phone company's main investor, agreed during a hearing at the U.S. Bankruptcy Court in Manhattan to give Iridium until the end of the day tomorrow to find a buyer.

Motorola's plan to send the satellites plunging toward Earth's atmosphere could be in place by then.

The satellites will come down "as soon as possible," said Scott Wyman, spokesman of Illinois-based Motorola.

The company's plan to take the satellites out of orbit was complete, he said, but declined to talk about it because Motorola hadn't finished the schedule.

Motorola also must get government approval for its plan.

Iridium officials said they still could pull out a last-minute deal to sell the satellites and the company's other assets, despite the limited time Motorola gave them.

"Until the satellites hit the atmosphere, there's always a chance for a deal. It seems very, very unlikely, but it's still possible," Iridium attorney Bob Beury said.

Investment banking firm Castle Harlan Inc. said Friday it was abandoning a plan to buy the satellites and other assets owned by Iridium because it decided the satellite-telephone company isn't capable of making money.

But a team of people who worked with the firm is looking for funding. That group includes former Iridium Chief Executive Edward Staiano, Iridium attorney William Perlstein said.

Motorola has operated the 66 primary satellites and six backup units since March without being repaid, and it has cost the company $10.1 million a month to keep them in operation, the company said in a motion filed Friday.

Motorola owned 19 percent of Iridium, which filed for Chapter 11 bankruptcy protection last August because it was unable to make payments on an estimated $4.4 billion in debts. Motorola was behind the $7 billion project to start the satellite-telephone project in 1990.

Motorola sought approval from the bankruptcy court to destroy the satellites because a deal between Iridium and Castle Harlan wasn't coming together.

In its court filing last week, Motorola said it considered cellular-telephone pioneer Craig McCaw as the "only credible alternative" to take over Iridium.

"It is obvious that the Iridium system is beyond saving as a business venture," Motorola wrote in its motion.

Mr. McCaw's Eagle River Investments LLC offered $600 million for Iridium in February before revoking the offer a month later. New York-based Castle Harlan announced June 1 its tentative decision to pay $50 million for Iridium's assets.

In the meantime, Motorola tried to shift operations from Motorola to Boeing Co., which Castle Harlan planned to have maintain the satellites, according to the Motorola court filing.

Motorola and Castle Harlan also failed to agree on the sale of thousands of handsets and other equipment to Castle Harlan.

Castle Harlan had until July 21 to finalize an agreement to take over Iridium.

Despite the investment bank's decision not to pursue Iridium, "there are some people out there who are serious," Mr. Beury said. "As soon as Castle Harlan said no, we started getting calls."

Motorola has said it will cost $37 million to destroy the satellites.

Iridium's system supported both calling and paging services. Iridium mustered just 55,000 customers since the service started in November 1998.

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