NEW YORK (Bloomberg) — Bermuda-based ProtoStar Ltd., the operator of two satellites providing digital television and broadband Internet to Asia, filed for bankruptcy protection in the US, citing a dispute over a contract cancelled by Moscow-based Intersputnik.

ProtoStar and five subsidiaries claimed between $100 million and $500 million in both assets and debt in Chapter 11 petitions filed on Wednesday in US Bankruptcy Court in Wilmington, Delaware.

ProtoStar Ltd. and three of the subsidiaries are filing a related bankruptcy petition in Bermuda, ProtoStar said.

Formed in 2005, ProtoStar is owned by MHR Fund Management LLC, New Enterprise Associates and Vantage Point Venture Partners.

The company operates two satellites, ProtoStar I, which was launched in July 2008 and ProtoStar II, launched in May. At the end of 2008, ProtoStar had assets of $528 million and $463 million in liabilities, according to today's filing. The company said it plans to sell one or both satellites in bankruptcy.

ProtoStar said it was forced to shut down operations of ProtoStar I after it received a termination notice in April from the Intersputnik International Organisation of Space Communications, which has the rights to ProtoStar I's orbital slot. As a result of the termination, ProtoStar I is currently unable to generate any revenue for the company, ProtoStar said.

According to a declaration filed with the court by ProtoStar Vice President Cynthia Pelini, Intersputnik claimed ProtoStar I was interfering with a nearby satellite.

"ProtoStar disputes the validity of the Intersputnik termination notice," Pelini said in the declaration. The true cause of the termination may have been a dispute between Intersputnik and Belarus, one of Intersputnik's sponsoring governments, she said.

An e-mail sent to Intersputnik seeking comment after business hours in Moscow wasn't immediately answered.

ProtoStar had $3.1 million in revenues last year, it said. The company said it has secured $16 million in debtor-in-possession financing for ProtoStar I and $2 million for ProtoStar II.

ProtoStar said in its filing it expects there will be funds to pay unsecured creditors. Philippine Long Distance Telephone Co. is listed as ProtoStar's largest unsecured creditor with a $27.5 million claim.