A federal judge has ordered Motorola Inc to pay a $300m guaranty that was collateral for an $800m loan granted to Iridium LLC, according to reports.
US District Judge Alvin H. Hellerstein in Manhattan ordered Motorola to pay the guaranty on the loan, which was issued in 1998 by Chase Manhattan (now JP Morgan Chase & Co) and a consortium of lenders.
"There is an obligation on the part of Motorola to deliver that guarantee obligation in response to the demand that Chase made," the judge ruled late Monday after a two-week bench trial.
Iridium filed for Chapter 11 bankruptcy protection in Aug 1999. The satellite-telephone company, backed by Motorola, slid into debt after failing to find a market for its one-pound mobile-phone handsets.
Chase and other creditors of Iridium claimed that Motorola kept control of the company even after it went public in 1997, contributing to problems that drove Iridium into bankruptcy.