WASHINGTON-Law firm Cohen, Milstein, Hausfeld & Toll P.L.L.C. filed a lawsuit against Globalstar Telecommunications Ltd. and Loral Space & Communications Ltd. in the U.S. District Court for the Southern District of New York on behalf of purchasers of securities of Globalstar during the period of Dec. 6, 1999, through Oct. 27, 2000.
The complaint alleges Loral issued false and misleading statements concerning Globalstar’s prospects and financial status, as well as the sale of its satellite telephones. It alleges Loral and Globalstar failed to disclose that they were significantly behind on the company’s internal business plans for the sale of satellite phones, and that the business plan was failing further because European regulators had not yet approved Globalstar’s phones for sale.
Moreover, the lawsuit claims Globalstar’s phones were unable to provide roaming services, rendering them noncompetitive in developed nations where the bulk of the phones the company expected to sell were to be sold.
Finally, the complaint claims that Loral and Globalstar issued several false statements indicating that the company’s business model was not suffering from the same marketing problems experienced by Iridium L.L.C., Globalstar’s primary competitor before it went bankrupt more than a year ago.
Purchasers of Globalstar securities that meet certain legal requirements have until April 30 to move to serve as lead plaintiff for the case, the law firm said.
