Received settlement for Iridium Securities Litigation settlement. IRA tax implications?

Posted by RFI-EMI-GUY on November 15, 2009, 1:08 pm

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I just received a check from class action litigation against Motorola,
pertaining to Iridium stock (which I still hold) which became worthless.

It appears the majority of the settlement is from Motorola and a
fraction from others. I doubt any from Iridium estate as it was settled
long ago.

If I cash this check am I subject to a distribution penalty from my IRA?
(I am 55 yo). If not is this taxable?

--
Joe Leikhim K4SAT
"The RFI-EMI-GUY"©

"Use only Genuine Interocitor Parts" Tom Servo  ;-P

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Posted by Arthur Kamlet on November 15, 2009, 1:28 pm

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Apparently the Iridium  was in your IRA?

And the claim form should have named te IRA and the check made
payable to your IRA?

If so, deliver this check to your IRA custodian and tell them it is
a settlement for stock in your IRA and to deposit the check in your
IRA coded as a dividend, a settlement or a rollover, according to
their policy, so it will not seem to be a contribution.

And yes, cashing the check is a taxable event, most likely
an IRA distribution with no known early distribution exception.
--

ArtKamlet  at  a o l dot c o m  Columbus OH  K2PZH

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Posted by Chip on November 16, 2009, 4:00 pm

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RFI-EMI-GUY wrote:

I am not familiar with the lawsuit, but what were the grounds?  I worked
for Motorola on Iridium during it's entire aborted life.  We shot for
the moon and came up short when the tech (mostly) worked but the public
marketplace refused to buy.  What did Moto do that was illegal?  You
invested in a risky high flying stock with chances of enormous rewards.
  It didn't work out.  Everything was laid out in the prospectus.

Why should Moto have to pay for simply a failed business venture?  This
is the new face of capitalism, invest w/o risk?  Just sue the bastards
if it goes bad.

BTW, Moto took it in the shorts (~$5B) more than anybody.

Iridium is still doing business with the Gov and large Corps just down
the street from me.

Chip 1

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used,   >>
<< nor can it used, for the purpose of avoiding penalties  >>
<< that may be imposed upon the taxpayer.                  >>
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<<   The Charter and the Guidelines for submitting posts   >>
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Posted by RFI-EMI-GUY on November 16, 2009, 11:12 pm

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Chip wrote:

Since it is a class action, I am sure the Lawyers found plenty wrong to
line their pockets and reward me with a tiny check ;'}.

Disclaimer: I am collecting a small pension from Moto, so have no
interest in their demise.

That being said, I once did a back of the napkin calculation, dividing
the entire Iridium indebtedness by the total number of available
transponder circuits of the 77 satellite constellation. The bottom line
is that Iridium could never have made a profit within the lifespan of
the constellation!

Furthermore, I was told by someone in the know at Iridium, that they
didn't actively market to maritime due to wanting to avoid conflict with
COMSAT signatories, so the potential call volume was further reduced to
satellites over land masses.

Wish I had done all this figuring before investing!

To keep investors at bay, Iridium marketeers did make silly and
technically flawed pronouncements such as "Engineers are working to
improve in-building coverage". I am sure you are aware the technology
could not, was not, designed for in building use.

--
Joe Leikhim K4SAT
"The RFI-EMI-GUY"©

"Use only Genuine Interocitor Parts" Tom Servo  ;-P

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used,   >>
<< nor can it used, for the purpose of avoiding penalties  >>
<< that may be imposed upon the taxpayer.                  >>
<<                                                         >>
<<   The Charter and the Guidelines for submitting posts   >>
<<  to this newsgroup as well as our anti-spamming policy  >>
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Posted by Chip on November 17, 2009, 11:08 am

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RFI-EMI-GUY wrote:

That is a redundant statement.  I believe there is a class in every
marketeer's career that teaches that technique.

Iridium was intended for "Coverage Everywhere, Anytime" including inside
buildings.  One of the little glitches they were working on for Ver. 2.

Chip

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used,   >>
<< nor can it used, for the purpose of avoiding penalties  >>
<< that may be imposed upon the taxpayer.                  >>
<<                                                         >>
<<   The Charter and the Guidelines for submitting posts   >>
<<  to this newsgroup as well as our anti-spamming policy  >>
<<                  are at www.asktax.org.                 >>
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