- The Washington Times - Wednesday, May 31, 2000

Bankrupt satellite-phone operator Iridium LLC is expected to support the sale of its satellite network this week.

The District of Columbia-based company had stopped accepting bids in March when it couldn't find a buyer for the constellation of 66 active satellites and the ground stations used to operate the system.

But talks over the sale of the assets have been renewed recently, and an attorney for one bidder said yesterday his client has doubled the amount he will pay for the failed company's assets to $50 million.

"We viewed that [decision to double the bid] as what we thought it would take to get this done," said Neil Forrest, the attorney for Gene Curcio, who has started Los Angeles-based investment company Venture Partners Inc. to take over Iridium. Mr. Curcio owns California telecommunications company Crescent Communications Inc.

Iridium attorney Eric Markus declined comment. But the company will file a brief with the bankruptcy court overseeing its dissolution.

A judge with the U.S. Bankruptcy Court in Manhattan must approve terms of any sale.

The $50 million generated from a sale to Mr. Curcio would cover just a fraction of the money Iridium owes creditors. The company filed for Chapter 11 bankruptcy protection in August because it was unable to make payments on debts totaling about $4.4 billion.

Cellular-telephone pioneer Craig McCaw's investment group, Eagle River Investments LLC, offered $600 million for Iridium in February before deciding to revoke the offer a month later.

Mr. Curcio offered $25 million for Iridium in March, but that offer and others were not enough to pay for Iridium's assets, the judge said.

General Dynamics Corp., based in Falls Church, Va., has tentatively agreed to help operate Iridium's satellites and ground stations if the court accepts Mr. Curcio's bid, company spokesman Norine Lyons said.

Iridium is due in court for another hearing June 7, when it is scheduled to provide Judge Cornelius Blackshear an update on its asset sale.

Mr. Curcio made his new, $50 million bid late last week.

An unnamed second group also has renewed interest in buying the satellites and has submitted a bid.

Iridium attorney William Perlstein said in March when the company abandoned efforts to find a buyer that more than 80 persons and companies had been contacted about taking over the satellites.

When it appeared the search for a buyer had failed, Iridium and Motorola Corp. said they were beginning efforts to write a decommissioning plan to systematically destroy the satellites by programming them to plunge toward Earth and burn up upon entering the Earth's atmosphere. Motorola owned 18 percent of Iridium.

But an Iridium official said last week the de-orbiting plan was on hold because the company was reviewing new bids.

Iridium began offering global satellite-telephone service in 1998 the first company to do so but was criticized for its bulky phones and high prices up to $7 per minute.

Its phones cost as much as $3,000 each. Iridium could muster only about 55,000 customers.

The constellation of 66 active satellites and six backup units is worth an estimated $5 billion.

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