TerreStar Networks, a satellite communications company that is in the midst of its chapter 11 bankruptcy proceedings, has moved ahead with the release of a new satellite phone.

The company is billing the handset, called the TerreStar GENUS, as the first combined cellular-satellite smartphone, according to a company press release.

The phone runs on Windows mobile 6.5, and runs on the local cellular network when it is available. When it is out of range the phone connects to the satellite for both voice and data. It connects with the AT&T mobile network.

An AT&T voice and smartphone data rate plan is required, and the monthly satellite service is billed separately as a per-minute, per-message or per-megabyte roaming charge. The phone sells for $1,150.

TerreStar had planned a combined satellite-terrestrial cellular phone network, but filed for chapter 11 bankruptcy after taking on more than $1 billion in debt. The company got $75 million in temporary financing from EchoStar, over the objections of some of its other creditors.

It is not clear that the restructuring plan, in which TerreStar's debt would be converted to equity with the senior noteholders getting 97% of it, will be approved as several creditors could still try to block it, or an offer to buy the company could materialize.

A TerreStar spokesperson did not return calls for comment.