Iridium Expects Friendly End to Motorola Dispute

By Peter B. de Selding

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Iridium Chief Executive Officer Matt Desch. Credit: Photo Courtesy of Iridium Enlarge Image

WASHINGTON — The chief executive officer (CEO) of mobile satellite services provider Iridium Communications on March 17 said a legal dispute with its former sponsor, Motorola, is likely to be resolved amicably by the two parties and will not block progress on Iridium’s plan to select a builder this summer for its next-generation satellite constellation.

“There is a good feeling on both sides to resolve the issue,” said Iridium CEO Matt Desch. “A dialogue is open, and this is not going to slow down our business.”

Motorola is demanding $24.7 million in cash from Iridium, saying Iridium’s purchase last September by GHL Acquisition Corp., and the company’s subsequent stock market listing, constitute a change in control under the terms of a December 2000 loan Motorola made to Iridium. Motorola has filed suit in the U.S. Circuit Court of Cook County, Ill., demanding payment from Iridium.

Desch said Iridium has always maintained that the GHL purchase does not constitute a change in control of Iridium.

Bethesda, Md.-based Iridium had said in a Feb. 16 filing with the U.S. Securities and Exchange Commission that the dispute, if resolved in Motorola’s favor, would permit Motorola to “terminate certain intellectual property licenses ... [covering] substantially all the company’s system technology.”

It was not immediately clear how much ownership Motorola has retained of the intellectual property at the heart of Iridium’s current 66-satellite network. But any doubt about the technology’s owners could complicate Iridium’s plans to sign a contract this summer for its $2.7 billion Iridium Next second-generation constellation.

Desch said Iridium and Motorola remain on good terms and will come to a mutually satisfactory settlement that will not affect the schedule of Iridium Next.