PARIS — Sea Launch Chief Executive Kjell Karlsen said his launch services company resorted to a Chapter 11 bankruptcy filing only at the last minute, after concluding that it could not reach an agreement with a former customer, Hughes Communications, on a stretched-out payment of a $52.3 million arbitration award Hughes won against Sea Launch.

In a Jan. 23 interview, Karlsen said Sea Launch is investigating a sale-and-leaseback option for its Odyssey sea-based launch platform, a converted oil rig that Karlsen said was valued in 2007 at more than $125 million. Such a move could provide Sea Launch with cash to keep its operation going as its sorts out its longer-term debt. Karlsen said Odyssey, which can house 80-90 people, could be converted to other offshore business purposes and thus can be monetized to provide at least some operational leverage.

Long Beach, Calif.-based Sea Launch filed for Chapter 11 debt restructuring June 22 but had not committed itself to that course of action until the afternoon of that same day, Karlsen said. Until then, he said, other debt-restructuring possibilities were on the table.

While the company has struggled throughout its decade-long existence as an operational launch services provider, it has been particularly weakened since its January 2007 launch failure, which kept the operation grounded for a year.

At about the same time, Sea Launch’s Russian and Ukrainian hardware suppliers began having difficulty providing rocket hardware, in part because of a sudden spike in materials costs in Russia.

With little revenue coming in, Sea Launch was unable to speed delivery of hardware and in recent months has stopped paying its suppliers altogether. These suppliers are also Sea Launch’s shareholders and have agreed to payment cessation, according to Sea Launch documents filed June 22 with the U.S. Bankruptcy Court for the District of Delaware.

Karlsen said Sea Launch had secured, with backing from its 40 percent owner, Boeing Co., $245 million in financing for debt coming due the week of June 22. But neither Sea Launch nor its bankers could figure out a way to bundle Germantown, Md.-based Hughes’ payment into a single package including the bank debt.

“We had an understanding in principle on how we could satisfy the award,” Karlsen said of the payment due to Hughes. “The solution found was a repayment schedule, which had been approved by our board. But there was some final documentation we couldn’t get passed” by the owners of Hughes and Sea Launch. “We had to protect our assets, and [Chapter 11] was viewed as the best alternative. It was not only a Boeing decision, it was a decision by our entire board.”

Karlsen said the Hughes debt will now be placed onto the pile of outstanding obligations to unsecured Sea Launch creditors.

Hughes spokeswoman Judy D. Blake said June 24 the company would have no comment on how the Chapter 11 filing might affect the timing or likelihood of Hughes receiving full payment of the arbitration award. “It is Hughes’ policy not to comment on active legal proceedings,” Blake said in an e-mail.

Chicago-based Boeing said June 25 that it expects to take a pretax charge of $35 million to its second-quarter earnings as a result of Sea Launch’s Chapter 11 bankruptcy. Boeing said that, if Sea Launch’s other shareholders do not make good on their obligations, Boeing could face additional pretax charges of up to $478 million.

In a filing with the U.S. Securities and Exchange Commission, Boeing said it intends “to perform its obligations under its guarantees” to Sea Launch creditors. Sea Launch’s entrance into Chapter 11 proceedings constituted a default event under the terms of some $448 million in Sea Launch debt that had been backed by Boeing and by Aker Marine of Oslo, Norway, another Sea Launch shareholder.

Boeing said it will “pursue vigorously all its rights and remedies against Sea Launch and other Sea Launch partners” to assure that Boeing’s ultimate liability does not exceed its 40 percent equity share of the venture. That would mean attempting to receive substantial reimbursement from the Russian and Ukrainian rocket-hardware builders who are also Sea Launch shareholders, but have not guaranteed Sea Launch’s debt.

Sea Launch expects to continue operating its business in the coming months as the bankruptcy court reviews possible restructuring scenarios. “We hope to emerge a stronger company,” Karlsen said.

Sea Launch is scheduled to launch the W7 commercial telecommunications satellite for Paris-based Eutelsat this fall. Karlsen said the supply-chain issues that have bedeviled the company in recent months have not been resolved, and that “we’re not 100 percent there on all the hardware” needed for the Eutelsat launch.

“We’re continuing a dialogue with Eutelsat to find a solution. Thankfully, there are some guys out there that are looking out for the greater good of the industry,” Karlsen said, contrasting Eutelsat’s position with statements by some Sea Launch competitors that the company would be unable to conduct any more launches.

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