"We are holding negotiating sessions every day," Michelle Lyle, Iridium spokesperson, told space.com from the company’s Washington, DC headquarters. "We have made some progress," she added.

Chase Manhattan claims the firm has defaulted on an $800 million corporate loan, a claim Iridium denies. Both Iridium and main investor Motorola were in continued discussions with Chase and other creditors for debt restructuring. The default allegations are contained in a filing made Tuesday with the Securities and Exchange Commission in Washington.

Lyle told space.com a 30-day grace period suspending payment of $90 million in interest on $1.45 billion in outstanding notes expires August 15th. "We will know what the next step will be" next week, she said. She added that Iridium did not believe the allegations would effect their ongoing debt discussions.

"The grace period allowed under the terms of the senior notes, along with the extension on our bank facility, gives us time to concentrate on reaching a suitable arrangement for the ongoing commercial operation of this company," Iridium CEO John Richardson said last month when the 30-day extension was announced.

Iridium began operations of its global wireless satellite phone service November 1, 1998. Since then, problems with mobile phone sales, coverage issues, and debt repayment have battered the company, whose publicly traded stock hovered around $7 per share Tuesday.