Loral insurers agree to pay $61 million for failed satellite, firm seeking $61 million more

By Ted A. Knutson

Washington, May 9 - Loral Space & Communications Ltd. said insurers have agreed to give the firm $61 million for the failure of its Telstar 14/Estrela do Sul-1 satellite to fully deploy in January 2004. The sums would amount to 82% of each settling insurer's portion.

Loral said it will seek approval of the insurance settlements May 10 in a hearing at the U.S. Bankruptcy Court for the Southern District of New York.

If the settlement is approved, $9.4 million would go to Intelsat as payment of the remaining portion of a $50 million advance.

Loral said it would need additional funds from other debtor subsidiaries or third parties to operate if the court does not approve the settlement or if the funds agreed to in the settlement are not paid in the second quarter.

The New York-based satellite company filed for bankruptcy on July 15, 2003. Its Chapter 11 case number is 03-41710.

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