Motorola Settles Iridium Bankruptcy Cases
SCHAUMBURG, Ill. – May, 2008 – Motorola, Inc. (NYSE: MOT) today announced that on May 20, 2008, Judge James M. Peck approved a global settlement of disputes in the Iridium bankruptcy cases pending in the United States Bankruptcy Court for the Southern District of New York. Approval of this settlement resolves in Motorola’s favor, at no out of pocket cost to the Company, all pending claims against the Company arising out of Iridium’s bankruptcy proceedings.
“This is a favorable outcome for Motorola,” said Peter Lawson, executive vice president and chief counsel for Motorola. “We have always been confident in our litigation position, and this resolution – ending the entire case at no out of pocket cost to Motorola – confirms our confidence was well-founded. We are pleased to conclude this matter and resolve all of the Company’s exposure to claims in the Iridium bankruptcy court.”
Anne McClain Sidrys, a partner in Kirkland & Ellis, trial counsel for Motorola, commented, “This case has been hard fought throughout its long run, against skilled and committed opponents. It is gratifying to bring the matter to a close.”
Since 2001, the court-appointed statutory creditors’ committee has been actively pursuing claims against Motorola for voidable preference, fraudulent conveyance, breach of contract and breach of fiduciary duty, and sought more than $4 billion in total damages. With the global settlement announced today, Motorola will pay nothing.
This favorable resolution follows Motorola’s victory in a first phase trial conducted by Judge Peck from October 2006 to June 2007, which focused on certain essential elements – solvency and capital adequacy – of the committee’s $3 billion preference and fraudulent conveyance claims. Judge Peck ruled entirely in favor of Motorola in August 2007, and in September 2007 entered judgment for Motorola on those claims.
At the same time, Judge Peck also set the committee’s remaining claims for trial. Rather than proceed to an expensive and time-consuming further trial, the parties conducted comprehensive settlement discussions, including a mediation held in February 2008. The global settlement approved by Judge Peck and announced today was the result of those discussions.
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