satellite services operator ICO, unable to pay $750 million in debt coming due in August, has filed for protection under Chapter 11 of the U.S. Bankruptcy Code but expects to continue its business during a court-ordered reorganization.

Industry officials said ICO may be only the first of several mobile satellite operators to seek a court-protected reorganization of debt in the coming months as the economic crisis exacerbates already fragile business plans.

Chapter 11 of U.S. bankruptcy law permits a company to continue operations; most companies that begin the process survive it – albeit with new owners and with their stockholders often wiped out in the process – without having to liquidate their assets and close their doors.

ICO, in a previous incarnation as a company seeking to launch a constellation of satellites for global mobile-broadband services, filed for Chapter 11 protection in 1999 and was subsequently purchased by its current owners, led by cellular pioneer Craig O. McCaw.

Reston, Va.-based ICO North America is filing for bankruptcy protection under the name DBSD North America Inc. An initial hearing in the U.S. Bankruptcy Court for the Southern District of New York was held May 21.

ICO Global, which recently won a $631 million award against its former satellite contractor, Boeing, is under a separate legal roof and is not affected by the bankruptcy filing.

ICO said it has reached agreement with 57 percent of its bondholders on a restructuring that would result in the bondholders owning 95 percent of ICO’s equity. The remaining creditors did not agree to the scheme, which led ICO to file a voluntary petition for Chapter 11 protection, ICO said in a May 15 statement.

ICO launched its ICO-G1 mobile communications satellite in April 2008, and the satellite entered service in January. Since then ICO, like several other struggling mobile satellite services companies in the United States, has been trying to persuade prospective strategic partners to invest in the project.

But despite attempts to portray the company’s business as containing U.S.-licensed radio spectrum of immense value, ICO has not been able to lure telecommunications operators, Internet service providers or direct-broadcast television operators to join the project – nor have the other mobile satellite operators.

In addition to its bondholders, ICO has substantial debts to its hardware suppliers. According to filings ICO made since May 15 with the bankruptcy court, the company owes $5.2 million to ICO-G1 prime contractor Space Systems/Loral of ; $1.85 million to Hughes Network Systems of Germantown, Md., a provider of ICO’s ground- based beam-forming technology; and $1.5 million to Alcatel- Lucent, a provider of ICO ground gear.

Michael Corkery, acting chief executive of ICO Global and DBSD, said the Chapter 11 filing “is the best way to implement the restructuring of the notes. DBSD and its subsidiaries have made tremendous progress in the past year to lay the foundation for delivering innovative mobile satellite services. This restructuring will allow us to significantly improve the financial position for DBSD and its subsidiaries, and will also allow DBSD to focus on maximizing the value of its capabilities and assets.”

Some industry officials have long argued that ICO, whose ICO-G1 satellite operates in S- band, should join forces with TerreStar Networks of Reston, Va., which is scheduled to launch its large TerreStar-1 S- band mobile communications satellite in June.