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May 23, 2008

Yesterday, Motorola announced that it won approval of a settlement plan with Iridium, ending a nine-year bankruptcy lawsuit for the handset maker and satellite phone provider.

The settlement, approved by U.S. Bankruptcy Judge James Peck, requires no out-of-pocket money from Motorola.

Instead, it calls for Iridium to distribute a 1 percent recovery rate to unsecured creditors on claims up to $1.6 billion.

Founded in 1992, Iridium began launching communications satellites for its mobile phone service in 1997.

The next year, Motorola backed the satellite phone system, but then in 1999 Iridium filed for bankruptcy, failing to attract customers willing to pay up to $10 a minute for satellite phone service.

In other news, on May 8th, Carl Icanh increased his stake in Motorola. According to a filing with the U.S. Securities and Exchange Commission, Icahn and affiliates purchased a total of 172.2 million of Motorola shares for a cost of $2.36 billion.

In light of Icahn's many controversial moves towards Motorola in the past two years, it will be interesting to see how all of this turns out for the balance of the year, and the outcome it could potentially have in the wireless industry.

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Source: Motorola.