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Compliance July 26, 2006
Global Crossing Settlement Treasury Grows by $99M
July 26, 2006 (PLANSPONSOR.com) - A new set of
defendants in ongoing securities litigation against Global
Crossing have agreed to add $99 million into a settlement pot
that already totals $345 million.
Reported by Fred Schneyer
A news release from plaintiff law firm Grant & Eisenhofer said the latest block of defendants to settle include the investment banks that were named because of allegations stemming from their role as underwriters of Global Crossing securities.
In an agreement initially approved by US District Judge Gerard Lynch of the US District Court for the Southern District of New York, the banks agreed to participate in a settlement that has previously netted $245 million from officers and directors of Global Crossing (including $30 million from the company’s co-founder and former chairman Gary Winnick). Citigroup and Salomon Smith Barney each paid $75 million, accounting firm Arthur Andersen settled with $25 million and law firm Simpson Thacher & Bartlett paid $19.5 million, according to the news release.
Plaintiffs accused telecommunications network provider Global Crossing, its former officers and directors and advisors of falsifying financial filings to hide losses, Reuters reported. The lead plaintiffs, the Public Employees Retirement System of Ohio and the State Teachers Retirement System of Ohio, claimed they lost more than $110 million.
Global Crossing turned to a US Bankruptcy Court for protection from its creditors in January 2002 after struggling with too much debt and undersea fiber-optic cable capacity, the result of doubts raised about its accounting practices. The company emerged from Bankruptcy Court in December 2003.
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