- The Washington Times - Thursday, November 16, 2000

A federal bankruptcy court judge yesterday approved a bid from a group led by Daniel A. Colussy to buy Iridium LLC, the District of Columbia-based satellite telephone company that went bankrupt last year.

Mr. Colussy, a director of Baltimore energy company Constellation Energy Group, and a group of investors will pay $25 million for Iridium's assets and prevent what earlier this year appeared to be the certain destruction of 66 satellites and six backup units orbiting the Earth.

The transaction is expected to close by the end of the month when the new owner, Iridium Satellites LLC, will take over.

"These guys hung in there and got the deal done," Iridium attorney Tom Tuttle said of the Colussy-led group.

The investors will take over the constellation of satellites, worth an estimated $5 billion, and the operations center in Reston used to control them.

Investors of Iridium Satellites still have not talked publicly about how they plan to use the satellites to make money, and Mr. Colussy the chairman of the new company and the only investor in it to come forward was unavailable for comment yesterday.

But in a statement released last night by Iridium Satellites, the company said it plans to relaunch affordable satellite communications services to companies in industries that have a need for satellite communications heavy industry and maritime, aviation and adventure businesses within 60 days. The new company also plans to market commercial satellite communications to the U.S. government and to humanitarian groups.

Iridium went out of business last year when it couldn't muster enough subscribers for its satellite phone service. Iridium filed for Chapter 11 bankruptcy protection in August 1999 because it was unable to make payments on an estimated $4.4 billion in debt.

The satellites support both calling and paging services. Iridium had attracted just 55,000 customers since the service began in November 1998.

Mr. Colussy and Iridium Satellites essentially won support for the deal by persuading Motorola Corp., which owned 19 percent of Iridium and controlled the satellites, to endorse the deal.

Schaumburg, Ill.-based Motorola has had court approval since March to destroy the satellites, which continue to orbit the Earth. The company drafted a plan to take them out of orbit, and federal agencies completed their review of the document.

But last month Motorola said it backed Mr. Colussy's efforts to buy Iridium's assets.

"I won't say it's a mystery [why Motorola changed its mind about destroying the satellites], but there will probably be a lot of speculation as to why," Mr. Tuttle said.

The sale is not likely to help unsecured creditors recoup their $1.5 billion in losses.

Iridium Satellites will contract with Seattle-based Boeing Co. to operate the satellites.

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