Satellite operator Ligado Networks has sued its contract partner Inmarsat shortly after filing for Chapter 11 bankruptcy.

The company is seeking to recoup $1.7 billion in payments over a 2007 spectrum leasing agreement.

In its lawsuit, Ligado claims Inmarsat failed to make the required upgrades to its satellite network while still demanding payments from Ligado, at a time when Ligado has been in a dispute with the US government which had prevented it from monetizing the leased spectrum.

Ligado has accused the UK-based satellite company of violating the 2007 agreement, which meant the two companies would be able to use radio frequencies for mobile communications and other commercial uses.

The company filed for Chapter 11 bankruptcy on Sunday night as part of restructuring plans, noting that it will still continue to operate and provide mobile satellite services as normal.

Ligado said that the filing will enable it to reduce its debt from $8.6 billion to approximately $1.2 billion.

“Over a 17-year period, Ligado paid Inmarsat over $1.7 billion in fees, while Inmarsat willfully avoided performing its contractual duties to upgrade its own satellite terminals,” said Ligado CEO Doug Smith in a statement.

“In fact, due to its choice to delay upgrading its terminals, Inmarsat is likely still years away from completing the upgrades required under the agreement. After a prolonged effort to reach a path forward, Ligado is compelled to seek legal recourse to make Inmarsat perform its duties and pay damages for the harm it has caused.”

Inmarsat has responded to the lawsuit, stating Ligado's complaint carries no legal merit and was replete with "unfounded allegations."

Reuters reported that Inmarsat attorney Laura Davis Jones said in a court hearing yesterday (January 7) that Ligado was $500 million behind on its contractually required lease payments, with additional obligations accruing quarterly.

Ligado touched on its dispute with the US government earlier this week, blaming it for the company's large operational losses which resulted in the bankruptcy filing.

Ligado blames the US government for taking its licensed spectrum unlawfully without compensation after a year-long effort to secure a comprehensive resolution with satellite communications company Viasat to restructure Ligado’s significant payment obligations to Inmarsat. Viasat acquired Inmarsat in 2023.

According to Ligado, the Chapter 11 filing will enable it to pursue its lawsuit against the US government, which it filed in 2023 against the Department of Defense (DoD), the Department of Commerce (DOC), and the National Telecommunications and Information Administration (NTIA).