(SpaceViews) -- A bankruptcy court on Monday gave the
Iridium satellite venture a week and a half to find a buyer for the company's assets or else face a plan to deorbit its $5 billion network of satellites in space.
The decision by the federal bankruptcy court in New York City came after merchant bank Castle Harlan backed out of plans Friday to buy the company's assets, including the more than 70 satellites currently in orbit, for $50 million.
More than 66 satellites like the one above may be removed from orbit in the next two years if no sale can be worked out.
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"Although Iridium provides a magnificent international point-to-point telephone service, our due diligence and marketing studies were unable to confirm that Iridium would generate even low levels of revenue with a high degree of certainty," Castle Harlan said in a statement.
In June the bankruptcy court granted Castle Harlan a 45-day "due diligence" period, during which time the bank investigated Iridium to determine if the company's assets would be worth the $50 million offer it made.
Iridium now has until August 9 to try and work out a new deal with Castle Harlan or another company, such as New York-based Venture Partners, which expressed interest in the company earlier this year. If no deal is made by then,
Motorola, which operates the satellites for Iridium, will have approval from the court to begin deorbiting Iridium's satellite constellation.
"We have a plan in place to decommission the constellation once the deorbiting plan is finalized," Motorola said in a statement on its website. "Details of that plan will be discussed once it is finalized."
Iridium
filed for bankruptcy protection in August 1999 after the company had difficulty attracting customers for its worldwide satellite phone service. After Teledesic cofounder Craig McCaw declined to bail out the company in March, the company ceased operation March 17. Since then Iridium has been looking for potential buyers of its assets while Motorola worked on a plan to deorbit the satellites.
Motorola said in March that it would take up to nine months to rewrite software and fire the thrusters for the initial orbit-lowering maneuver, and up to two years until all the satellites have been deorbited. The total cost of the deorbiting maneuver is expected to be between $30 and $50 million, and will likely be shouldered by Motorola.
The financial failure of Iridium has become a symbol of the collapse of the launch market for small, low Earth orbit satellites. This collapse has hurt the launch-vehicle industry; a number of companies had started to develop boosters -- including a new generation of reusable launchers that promised to reduce the cost of space access by an order of magnitude -- to serve this large market that never materialized.
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