Global Crossing investors sue over rescue plan
Ailing telecoms firm Global Crossing, which filed for Chapter 11 bankruptcy protection last week, is facing a lawsuit that could derail its rescue.
Investors in the firm issued a class-action lawsuit against Global Crossing last week, complaining that the company’s initial agreements with Hutchison and Singapore Technologies Telemedia would transfer billions of dollars of shares at ‘bargain-basement prices’.
Last week, Global Crossing announced the deal with Hutchison and STT, which is a $750m cash offer in exchange for 60% of the carrier, at the same time it filed for Chapter 11 bankruptcy protection.
The lawsuit alleged Global Crossing’s executives’ action ‘deprived shareholders if the equity in the company’.
Global Crossing has the world’s largest submarine cable network with total assets of more than £15.8bn ($22.4bn). It also has debts totalling £8.8bn ($12.4bn).
The company is audited by Andersen.