Motorola 2005 Annual Report Download - page 36

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Department. Plaintiffs seek compensatory and punitive damages against Motorola in excess of $5 billion. On
March 10, 2004, the court, to which all September 11 litigation has been assigned, granted Motorola's and the
other defendant's motion to dismiss the complaint on the grounds that all of the Virgilio plaintiffs had filed claims
with the September 11th Victims' Compensation Fund (the ""Fund''), that the statutory scheme clearly required
injured parties to elect between the remedy provided by this Fund and the remedy of traditional litigation and that
plaintiffs, by pursuing the Fund, had chosen not to pursue litigation. Subsequent appeals of the issue and petitions
to the United States Court of Appeals for the Second Circuit have been denied and the decision of the lower court
dismissing the case was affirmed. On October 13, 2005, plaintiffs filed a petition for writ of certiorari with the
United States Supreme Court. The Supreme Court denied the petition on January 17, 2006, terminating all avenues
of appeal.
Iridium-Related Cases
Class Action Securities Lawsuits
Motorola has been named as one of several defendants in putative class action securities lawsuits arising out of
alleged misrepresentations or omissions regarding the Iridium satellite communications business, which on
March 15, 2001, were consolidated in the District of Columbia under Freeland v. Iridium World Communications,
Inc., et al., originally filed on April 22, 1999.
Bankruptcy Court Lawsuit
Motorola was sued by the Official Committee of the Unsecured Creditors of Iridium in the Bankruptcy Court
for the Southern District of New York on July 19, 2001. In re Iridium Operating LLC, et al. v. Motorola asserts
claims for breach of contract, warranty, fiduciary duty, and fraudulent transfer and preferences, and seeks in excess
of $4 billion in damages. Trial has been scheduled for August 7, 2006.
On March 30, 2001, the United States Bankruptcy Court for the Southern District of New York presiding over
the Iridium bankruptcy proceeding approved a settlement between the unsecured creditors of the Iridium Debtors
and the Iridium Debtors' pre-petition secured lenders. The settlement agreement creates and provides for the
funding of a litigation vehicle for the purpose of pursuing litigation against Motorola. Motorola appealed the
approval of the settlement to the United States District Court for the Southern District of New York. On April 7,
2005, the District Court entered an order denying Motorola's appeal and affirming the settlement. On May 4, 2005,
Motorola filed a notice of appeal to the United States Court of Appeals for the Second Circuit. The appeal is
pending.
Iridium India Lawsuits
Motorola and certain of its current and former officers and directors were named as defendants in a private
criminal complaint filed by Iridium India Telecom Ltd. (""Iridium India'') in October 2001 in the Court of the
Extra Judicial Magistrate, First Class, Khadki, Pune, India. The Iridium India Telecom Ltd. v. Motorola, Inc. et al.
complaint alleges that the defendants conspired to, and did, commit the criminal offense of ""cheating'' by
fraudulently inducing Iridium India to purchase gateway equipment from Motorola, to acquire Iridium stock, and to
invest in developing a market for Iridium services in India. Under the Indian penal code, ""cheating'' is punishable by
imprisonment for up to 7 years and a fine of any amount. The court may also require defendants to compensate
the victim for its losses, which the complaint estimates at about $100 million. In August 2003, the Bombay High
Court granted Motorola's petition to dismiss the criminal action against Motorola and the individual defendants.
Iridium India has petitioned the Indian Supreme Court to exercise its discretion to review that dismissal, and that
petition is pending.
In September 2002, Iridium India also filed a civil suit in the Bombay High Court against Motorola and
Iridium. The suit alleges fraud, intentional misrepresentation and negligent misrepresentation by Motorola and
Iridium in inducing Iridium India to purchase gateway equipment from Motorola, to acquire Iridium stock, and to
invest in developing a market for Iridium services in India. Iridium India claims in excess of $200 million in
damages and interest. Following extensive proceedings in the trial court and on appeal related to Iridium India's
motion for interim relief, Motorola has deposited approximately $44 million in a specially designated account in
India, and the Indian Supreme Court has accepted for a full hearing at a later date Motorola's appeal regarding
interim relief.