Tuesday, September 4, 2007

Motorola Off the Hook for $3.7 Billion

The Elements of Satellite-Phone Failure
A bankruptcy court ruling Friday closed the books on the long-running legal battle between Iridium LLC and its creditors. The decision lets Motorola, the former parent of Iridium, off the hook for $3.7 billion it received to build the doomed telecom company's satellite network. Nine months after the satellite system was activated in November 1998, Iridium filed for bankruptcy protection. Investors turned out to be "terribly wrong" about Iridium's business plan, Bankruptcy Judge James M. Peck said. The venture called for consumers to purchase bulky $3,000 phones that only worked when in "line-of-sight" contact with a satellite.
A funny footnote of the Iridium meltdown was noticed by The Wall Street Journal Online in 1999: The company had planned to launch 77 satellites for its network, and thus borrow its name from iridium, the 77th element on the periodic table. But only 66 satellites ever made it into orbit -- which means that, more accurately, the company should have been named after dysprosium, the 66th element. Iridium comes from the Greek word meaning "rainbow;" dysprosium, on the other hand, means "hard to get at" in Greek.