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Chase Manhattan Bank has sued 17 financial backers of Iridium LLC, the bankrupt satellite telecommunications venture, for $242.7 million, accusing them of reneging on an agreement to pump more money into the company last year. Neither this latest suit, nor an earlier, related suit by Chase against Motorola Inc. for $300 million, should have any effect on rival bids, from the New York private equity firm Castle Harlan and a Los Angeles investment firm, Venture Partners Inc., to buy Iridium’s assets for about $50 million. The new suit, filed in Federal District Court in Delaware last Friday, claims the 17 defendants, who also include Motorola, failed to meet an obligatory capital call triggered when Iridium, which is located in Washington, D.C., defaulted on its bank loans last August. Chase had led Iridium’s bank creditor group. The earlier suit, lodged against Motorola, charges that the Shaumburg, Ill., electronics giant, which was Iridium’s largest backer, failed to live up to a separate agreement to guarantee $300 million of Iridium’s $800 million credit line. Lawyers for Iridium and executives at Chase and Motorola didn’t return calls for comment. But analysts said both lawsuits have an identical goal, to put the squeeze chiefly on Motorola. “Nearly all the other 16 defendants [in the latest suit] are bankrupt,” observed Mark Kaufman, an analyst at Amroc Investments, a distressed-investment adviser. Except for Motorola, the defendants include operators of so-called gateways, or land-based stations in various parts of the world that routed telephone calls from Iridium’s satellites. Because the investors had formed a consortium, Chase couldn’t sue them separately, Kaufman said. The suit’s targets include operators of gateways in Africa, Canada, Hong Kong, India, the Middle East and South Africa. Motorola’s piece of the $242.7 million Chase is seeking from the 17 defendants amounts to $44 million. Last week, too, Judge Cornelius Blackshear of the U.S. Bankruptcy Court for the Southern District of New York approved an Iridium-backed plan giving Castle Harlan 45 days to decide whether to make binding the firm’s tentative $50 million offer for Iridium’s assets. These include 66 satellites and a satellite guidance center in Washington, D.C. The judge also left the door open to Venture Partners, a competing bidder that, as of last week’s hearing, had not lined up all the financing for its $50 million bid. The next hearing on the bidding process is scheduled for July 31. Copyright �2000 TDD, LLC. All rights reserved.

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