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Boeing Company

ICO Global Telecommunications v. Boeing (Breach of Contract)

Date: 10/21/2008 (Date of Verdict Announcement)

Misconduct Type: Non-governmental Contract Fraud

Enforcement Agency: Non-Governmental

Contracting Party: Non-Governmental

Court Type: Civil

Amount: $10,000,000

Disposition: Settlement

Synopsis: ICO Global Telecommunications sued Boeing Company and Boeing Satellite Systems International (BSSI) alleging breach of contract and fraud involving a failed plan to launch a network of satellites that would transmit mobile services. ICO contracted with Hughes Electronics Corp. (acquired by Boeing in 2000) to build and launch the satellite system. Only two of the satellites were ever finished. One was destroyed during launch, and the other, which made it into orbit, is of little use without the 10 others which remain unfinished. ICO contended Boeing made matters worse after it bought Hughes by demanding an additional $400 million to finish the job and getting into the satellite based communications business itself, thus becoming a direct competitor of ICO. Boeing originally sued ICO in 2004 after ICO terminated the contract. In October 2008, the jury found BSSI and Boeing liable for breach of contract, fraud and tortious interference with a contract. The court awarded $603 million in damages to ICO, which was overturned on appeal. In June 2012, Boeing and ICO (which changed its name to Pendrell Corporation in 2010) settled the lawsuit with Boeing agreeing to pay $10 million.