Loral gets court approval to launch satellite without insurance

By Jeff Pines

Washington, Nov. 18 - Loral Space & Communications Ltd. can launch a satellite without launch insurance, the U.S. Bankruptcy Court for the Southern District of New York ruled. The court order was filed Thursday.

Back in 2001, Loral formed XTAR LLC with a consortium of Spanish companies to build a satellite to orbit the earth to provide services to Spain, the United States and NATO countries and other countries.

In the course of building the satellite there were a number of financial setbacks.

Launch insurance provides coverage from initial ignition of the launch rocket to the satellite separating away, about two hours in length. Loral estimates the launch insurance would cost it about $14.1 million.

The Spanish consortium plans to buy launch insurance to protect its investment in the satellite.

The court also approved Loral's request to either buy in-orbit insurance or to make a capital contribution to XTAR of up to $635,000 to fund a portion of the insurance and an additional capital contribution of up to $570,000.

Loral filed for bankruptcy on July 15, 2003. Its Chapter 11 case number is 03-41710.

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