PARIS — Commercial launch services provider Sea Launch Co. LLC filed for Chapter 11 bankruptcy protection June 22, revealing in the process that its creditors are claiming more than $2 billion in unpaid debt. Nearly half of it – $977.5 million – is claimed by Sea Launch’s general contractor, Boeing.

Long Beach, Calif.-based Sea Launch said its January 2007 on-pad launch failure, which grounded the service for a year and caused several customers to cancel their contracts, has combined with the current financial crisis to push the company to the edge of insolvency.

Among other consequences, the January 2007 failure caused Sea Launch customer Hughes Communications of Germantown, Md., to cancel a launch contract and demand a full refund for advance launch deposits. Sea Launch refused to pay, but an international arbitration panel ruled in Hughes’ favor. Sea Launch now owes Hughes $52.3 million, making Hughes the largest Sea Launch creditor outside of Sea Launch’s shareholders, who are also the company’s main hardware suppliers.

In documents filed June 22 with the U.S. Bankruptcy Court for the District of Delaware, Sea Launch says it intends to continue operations while the court oversees a reorganization of its debt.

In addition to the $977.5 million claimed by Boeing Commercial Space Co., Sea Launch’s launch platform and command ship provider, Aker Marine of Oslo, Norway, is claiming Sea Launch owes it $312.7 million.

PO Yuzhnoye of Ukraine, a principal builder of the Zenit 3SL rocket that Sea Launch uses to orbit satellites from the Aker floating platform in the Pacific Ocean, alleges that Sea Launch owes $140.7 million. S.P. Korolev Rocket and Space Corp. Energia of Russia, which builds the Zenit 3SL upper stage, says it is owed $74.1 million, according to the bankruptcy court filing.

After the Hughes debt, which Sea Launch lists as still “disputed,” Sea Launch’s bankers are next in line in terms of amounts owed.

ING Bank, BayerischeLandesbank, Calyon, Sumitomo Mitsui, Citicorp, Sanpaolo IMI, PNS Bank, Wachovia, SocieteGenerale, Aegon USA Investment Management and JP Morgan Chase are part of banking consortia to which Sea Launch owes $251 million in 2009, $100 million in 2010 and $100 million starting in 2014, according to Sea Launch’s court filing.

Sea Launch’s most immediate financial problem had been $245 million in bank debt that was due June 22. The company had also asked Hughes to hold off on its demand for the $52.3 million arbitration award until June 22.

Sea Launch President KjellKarlsen had said repeatedly that the company would have little trouble raising the necessary funds, either through a private placement or through a fresh Boeing-backed bank loan.

Instead, Sea Launch said it elected to file for Chapter 11 protection to give it time to seek other alternatives. The company told the bankruptcy court that it is considering “the potential sale of one or more of [its] divisions, owned technology, or other business units.”

As its cash flow has worsened in recent months, Sea Launch was forced to plea with one of its principal customers, satellite fleet operator Intelsat of Washington and Bermuda, to pay several million dollars beyond what was due under several launch contracts. Sea Launch insisted that, without the cash injection to its Russian and Ukrainian partners, the launches might not proceed.

In recent months, Sea Launch has been forced to suspend payments to its suppliers to conserve cash.

A precipitous rise in raw materials costs in Russia in 2007 and 2008 caught Sea Launch by surprise. The company’s suppliers subsequently reported difficulties in producing rocket parts because their Sea Launch-derived revenue was no longer sufficient to cover component costs. The recent decline in the value of the Russian ruble does not appear to have materially eased the situation.

Sensing the company’s weakness, Sea Launch’s competitors in recent months have attacked Sea Launch’s remaining customer base, inviting satellite owners to consider that Sea Launch was on its last legs.

Since returning to service in January 2008 after the January 2007 failure, Sea Launch has conducted six sea-based launches and two missions from its new Land Launch operation, which uses the same rocket to launch lighter satellites from Russia’s BaikonurCosmodrome in Kazakhstan.

Sea Launch has scheduled the launch of the Eutelsat W7 commercial telecommunications satellite from the ocean-based launch platform this fall. Officials from Paris-based Eutelsat said they remain confident Sea Launch has enough rocket hardware available to it to proceed with the launch.

Sea Launch said its debts to Boeing and Aker date from 1996. The company was founded in 1995 and performed its first launch in 1999. Boeing and Aker loaned Sea Launch $276 million in 1996 at an annual interest rate of 12 percent that in 2002 was reduced to 6 percent. Sea Launch said outstanding loans from its investors totaled $760.8 million as of Dec. 31.

In addition to loans from its investors, Sea Launch’s debt includes $119 million in cost overruns incurred during the system’s development. The company’s shareholders, who performed most of the development work, agreed to defer payment, without interest, for an indefinite period.

Sea Launch’s challenge from the beginning has been to secure a sustainable revenue base without access to the U.S. government market. Built largely with Russian and Ukrainian hardware, launched on a Norwegian platform and operated in international waters, Sea Launch is barred by U.S. policy from launching U.S. government payloads.

No other space-launch system has been able to maintain activity for long without substantial government support in the design and maintenance of the rocket and launch-pad hardware and a guarantee of regular government satellite business, which is generally more profitable than commercial satellite launches.

Peter B. de Selding was the Paris bureau chief for SpaceNews.