One week after filing a lawsuit against one of its major investors, EchoStar
Communications Corp., satellite broadband provider StarBand Communications Inc. has
filed for bankruptcy protection in a federal court.
StarBand, partially owned by Israeli company Gilat Satellite Networks Ltd., blamed
EchoStar for not turning over more than $2 million in fees that StarBand said
EchoStar collected as its representative.
EchoStar had invested $100 million in the company, for a 32 percent stake.
EchoStar wrote the investment off its taxes this year as a bad
investment.
EchoStar cut off its marketing relationship with StarBand in February and
ceased turning over subscriber fees for 31,000 of StarBand's total of 41,000
subscribers.
To keep the company from going under, parent company Gilat is loaning it $2.8
million, which the U.S. Bankruptcy Court in Delaware approved Monday.
StarBand is combining its two lawsuits against EchoStar at the Delaware
court, a spokeswoman said.
