The Second Circuit Court of Appeals upheld a decision, reached by a Manhattan federal judge last year, that allows Motorola to collect $1 billion in punitive damages from the former owners of Turkish wireless carrier Telsim, who were alleged to have defrauded Motorola out of $1.5 billion in infrastructure loans that were not repaid. The case stems from a series of contracts signed in 2000 by Motorola, Nokia of Finland, and members of the Uzan family, who took out vendor financing loans in the total amount of $2.7 billion from both companies for the purpose of upgrading the Telsim network and doubling its capacity. Fifteen months later, Motorola and Nokia filed suit after Telsim defaulted on a $728 million payment. According to court documents, the Uzan family siphoned off the funds for their personal use and diluted the value of Telsim shares held as collateral against the loans. Finding that the Uzans had acted in bad faith, Federal District Court Judge Jed Rakoff ruled in favor of Motorola and Nokia and ordered the Uzans to pay compensatory damages of $2.1 billion and punitive damages of $2.1 billion. (Sources indicate that Nokia has since settled its claims against the Uzan family.) Although the Second Circuit upheld the compensatory damage award, Rakoff later reduced the damage award to $1 billion at the request of the appeals court, which affirmed the reduced award last week. In its ruling, the appeals court rejected arguments by the Uzans that the damage award exceeded their assets, which the lower court decreed to be in excess of $5 billion. Applauding the decision, a Motorola spokeswoman said, “we . . . remain committed to pursuing our now fully affirmed judgments.”