Link to original from Reuters:  http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSN3136820920081031

NEW YORK, Oct 31 (Reuters) – Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) and its satellite manufacturing unit have been ordered to pay $236.86 million in punitive damages to ICO Global Communications (Holdings) Ltd (ICOG.O: Quote, Profile, Research, Stock Buzz) as a result of a long-running legal dispute, the company said on Friday.

The award comes on top of the $370.6 million in damages Boeing was ordered to pay ICO in the same case 10 days ago by a California state court jury in Los Angeles.

Boeing said it would seek an appeal that could take several years to run its course. The company said it believed it did not break the law or breach any contract.

The dispute dates back to a $2 billion contract initially awarded in 1995 by ICO to Hughes Electronics, which was acquired by Boeing in 2000.

ICO’s plan was to build and launch a dozen satellites that would form the basis of new global communications network, but according to arguments presented in the case, only one satellite was ever launched into space, another exploded on launch, and 10 more are incomplete and in storage.

ICO, a satellite communications company based in Reston, Virginia, was taken over by wireless pioneer Craig McCaw in 2000.

Chicago-based Boeing initially sued ICO in 2004 after ICO terminated its contract for the satellites. ICO countersued, accusing Boeing of breach of contract and fraud, and sought $2 billion in damages.

Boeing has denied any wrongdoing and said ICO’s problems stemmed from a bad business decision betting on the future of satellite phones. (Reporting by Bill Rigby, editing by Leslie Gevirtz)

 

 

 

 

 

Link to the original at The Washington Post:  http://www.washingtonpost.com/wp-dyn/content/article/2008/10/26/AR2008102601842_pf.html

 

 

Years Later, ICO Wins Ruling Against Boeing in Satellite Contract Lawsuit

Monday, October 27, 2008; D02

ICO Global Communications has been waiting four years for victory. Last week, the Reston-based satellite company got it.

A California jury decided Boeing must pay at least $370 million for breaching a contract to build and launch satellites for ICO. After a four-week trial, Los Angeles jurors sided with ICO’s argument that Boeing unfairly demanded additional money to complete and launch the satellites, which ICO ordered to supply Internet connections to cellphones and other mobile devices.

The award does not include punitive damages, a subject the jury is set to take up this week.

Boeing said it would appeal the decision. J. Michael Luttig, a Boeing senior vice president, told the Associated Press that there were “fundamental errors in the conduct of the trial,” including jury instructions and the judge’s interaction with the jury during deliberations.

The decision is the latest development in a saga that dates to the mid-1990s. Back then, ICO had hired Hughes Electronics to build and launch a dozen satellites. Boeing acquired Hughes in 2000 and inherited the contract. But only a few of the satellites had been finished, and Boeing’s launch plan was unsuccessful, ICO said.

Also in 2000, ICO was brought out of bankruptcy protection by cellphone industry pioneer Craig McCaw. In 2004, ICO sued Boeing, seeking $1.5 billion in damages, plus interest and punitive damages.

The disputes “had a dramatic impact on our ability to launch a more robust international service,” said ICO chief executive Tim Bryan. “It was very harmful to ICO that those satellites were not launched.”

In April, ICO launched its own satellite designed to beam about a dozen TV channels for mobile devices and TV screens in cars. Trials will begin in Las Vegas and Raleigh-Durham, N.C., by the end of the year.

Kim Hart

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