A second global satellite communications venture came crashing to earth late last week as ICO Global Communications filed for bankruptcy protection in the US Bankruptcy Court for the District of Delaware and sought to appoint a provisional liquidator for its Bermuda and Cayman Islands operations.

Chapter 11 petitions also were filed in US Bankruptcy Court by three of ICO's direct or indirect wholly-owned subsidiaries: ICO Global Communications (Operations) Ltd., ICO Global Communications Holdings B.V., and ICO Global Communications Services Inc.

The ICO holding company is incorporated in Bermuda and one of its subsidiaries is based in the Cayman Islands. Neither jurisdiction has a legal equivalent to Chapter 11 in the US To facilitate a successful reorganisation and protect its assets, ICO voluntarily presented petitions in both jurisdictions.

The collapse of ICO, a $3 billion venture, came just two weeks after Iridium, a $5 billion, Bermuda-based satellite telephone company, succumbed to financial pressures of its own. Both ICO and Iridium have sought protection under Chapter 11 of the US bankruptcy code, which is designed to give companies a breathing space to make arrangements with their creditors in order to keep their businesses alive.

Like Iridium, ICO was set up to create a web of satellites capable of carrying mobile telephone calls to and from anywhere in the world. The company had planned to launch its satellites this summer, with service beginning by the end of next year.

Commenting on the filing, ICO's chief executive officer, Richard Greco, said: "ICO was created to develop and operate a convenient, high-performance, and cost-effective global mobile telecommunications business, and we have made substantial investments to build that business.

"Additional financial resources will be required to complete our system and begin commercial operations, and we have made considerable progress toward accomplishing these goals. A number of our strategic investors have confirmed their continuing interest in providing the company with financial support. Our Chapter 11 filing should provide ICO with the extra time needed to reorganise, recapitalise, and complete our financing. We believe that our actions will be successful, and that ICO will emerge as a very effective competitor in providing global mobile satellite telephone services.'' News of the collapse of ICO came one day before a shareholders' meeting was set to seek support for a $1.4 billion financial restructuring. It was not immediately clear why the company's plans failed, although some reports blamed a dispute among the company's bondholders.

Mr. Greco claimed that a number of ICO's investors were still interested in supporting the company financially. He said that the Chapter 11 filing should give ICO time to restructure its financing.

The company's troubles began two months ago, after it failed to raise $500 million from shareholders to fund its continued development. The company blamed the failure at the time on the troubles that surrounded Iridium, which had attracted few subscribers. Iridium's problems infused an air of doubt into the whole notion of satellite communications, a company spokesman said at the time.

ICO's latest round of difficulties is believed to have been exacerbated by a further collapse in its share price since Iridium's failure, making it difficult for the company to agree terms on which it should raise new equity finance. ICO shares, which hit a high of $16 5 in February, fell to $3 5 last week, before trading was halted.

ICO has also suffered technical problems, just as Iridium did. Rocket failures forced ICO to suspend plans to launch its first satellites in July.