In a victory for Motorola, the 2nd U.S. Circuit Court of Appeals has granted the company’s request to vacate a $135 million settlement between unsecured creditors and lenders of a bankrupt satellite telephone company that Motorola helped create.

2nd Circuit Judges Sonia Sotomayor, Richard C. Wesley and Peter W. Hall remanded the case to Southern District of New York Bankruptcy Court, instructing that court to provide “clarification” as to why the settlement — which would bankroll suits against Motorola for billions of dollars — deviated from established federal bankruptcy settlement approval standards.

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