Schaumburg (IL) – Motorola has closed one of its costliest adventures in the company’s history. The company was handed a global settlement of all pending Iridium bankruptcy cases, which resulted from a shutdown of the company’s satellite phone technology that was developed and deployed between 1987 and 1998.

According to Motorola, the settlement came out in Motorola’s favor, at no out of pocket cost to the company, which may be a surprise to some as the damages sought by the suitors exceeded $4 billion.  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.

The company previous settled other claims relating to Iridium and retired an $825 million Puttable Reset Securities PURSSM in February 2003 and settled an $800 million suit brought against the company by Chase Manhattan Bank for $383 million in the following month. Considering the fact that the Iridium network and its 66 satellites were estimated to have cost the company more than $5 billion, Motorola got away with a black eye.

Iridium’s satellite phone service was launched in November of 1998, but was never able to achieve much traction among users due, mainly due to a flawed market positioning and calling rates that were as high as $10 per minute. The company signed up just about 15,000 users to its network and defaulted on a $1.5 billion loan within less than a year after launch.

In what only can described as business brilliance, investor Dan Colussy purchased the bankrupt network for $25 million, or half a penny on the dollar, and repositioned the service thanks to a $252 million service contract with the U.S. military that covered more than 20,000 users from the start – more than what Motorola could attract within nine months of business operations.

Iridium recently reported $74.3 million in revenues for the first quarter of this year as well as more than 250,000 users globally.

Read details about the rise, fall and reconstruction of Iridium:
Iridium: It’s back, stronger and more convincing than ever