|Fate||Acquired by Level 3 Communications|
|Defunct||October 3, 2011|
|John Legere, CEO|
|Revenue||US$2.536 billion (2009)|
|-US$141 million (2009)|
Number of employees
Footnotes / references|
Global Crossing was a telecommunications company that provided computer networking services and operated a tier 1 carrier. It maintained a large backbone network and offered peering, virtual private networks, leased lines, audio and video conferencing, long distance telephone, managed services, dialup, colocation centres and VoIP. Its customer base ranged from individuals to large enterprises and other carriers, with emphasis on higher-margin layered services such as managed services and VoIP with leased lines. Its core network delivered services to more than 700 cities in more than 70 countries.
In 2002, the company filed for one of the largest bankruptcies in history and its executive were accused of covering up an accounting scandal.
Founding and early growth
In March 1997, Global Crossing was founded by Gary Winnick, the former manager of the bond desk of Drexel Burnham Lambert, and his Drexel colleagues who moved on to work at Canadian Imperial Bank of Commerce (CIBC): Abbott L. Brown, David L. Lee, and Barry Porter. In 1997, the company raised $35 million, including investments by Winnick and the CIBC Argosy Merchant Funds (later Trimaran Capital Partners).
CIBC later realized an estimated gain of $2 billion from its relatively small equity investment in the company, making it one of the most profitable investments by a financial institution in the 1990s. Winnick salvaged $735 million from his $20 million investment, although his interest was worth $6 billion on paper at its peak.
Winnick was chairman of the company from 1997 until 2002. In 1998, he hired Lodwrick Cook, former CEO of Atlantic Richfield Company, as co-chairman. John Scanlon became the first CEO of the company in the same year, but was replaced in March 1999 by Robert Annunziata, who had resigned as president of AT&T Corporation's Business Services group to "build a company from start to finish".
The company also acquired 49% of SB Submarine Systems.
In September 1999, the company formed Asia Global Crossing, a $1.3 billion joint venture with Softbank and Microsoft to build a fiber-optic network in Asia linking Japan, China, Singapore, Hong Kong, Taiwan, South Korea, Malaysia and the Philippines.
In March 2000, Annunziata resigned, receiving $160 million during his 13 month tenure. Leo Hindery, who had joined the company a few months earlier as head of its web hosting division, GlobalCenter, then became CEO.
In September 2000, the company announced a deal to sell GlobalCenter to Exodus Communications for $6.5 billion in stock. By the time the deal closed in January 2001, the stock was only worth $1.95 billion. Hindery then resigned as CEO and was replaced with Thomas Casey, a lawyer who came to Global Crossing from Merrill Lynch, where he was co-head of the global telecom investment banking group.
For the year 2000, the company lost $1.4 billion.
In the summer of 2001, the company began discussing a transaction with Enron in which the company would pay Enron $650 million for its fiber-optic network in exchange for Enron paying the company $650 million to use the network, a move that would boost both companies' revenues without costing them anything. The transaction did not materialize.
In the fourth quarter of 2001, the company lost $3.4 billion on revenue of $793 million. In January 2002, the company filed bankruptcy. It listed total assets of $22.4 billion and debts of $12.4 billion and was paying annual interest of $600 million. As part of the bankruptcy, Hutchison Whampoa and ST Telemedia agreed to invest $750 million in the company. Hutchinson Whampoa later pulled out of the deal due to regulatory resistance.
In April 2002, Hutchinson Whampoa bought the company's 50% interest in the Hong Kong joint venture for $120 million.
Between 1998 and 2001, Winnick sold approximately $420 million in company stock and other executives sold an additional $900 million in company stock.
In March 2004, Gary Winnick and other ex-executives settled lawsuits filed by investors and former employees accusing the executives of committing securities fraud by using improper accounting to inflate the company's revenue.
In May 2007, the company acquired Impsat, a leading Argentine telecommunications company. Global Crossing and Impsat have had a commercial relationship since 2000, when Global Crossing selected Impsat as one of its providers of Point of Presence (PoP) facilities for Global Crossing's Latin American network, known as South American Crossing. Impsat has also been a customer of Global Crossing in Latin America since 2000.
In October 2011, Level 3 Communications acquired the company for $3 billion, including the assumption of $1.1 billion in debt.
The company contributed $250,000 to each of the 2000 Republican National Convention and the 2000 Democratic National Convention and made major contributions to politicians of both parties. The company also courted politicians to invest in the company. The company hired lobbyist and former United States Assistant Attorney General Anne Bingaman, married to Democratic New Mexico Senator Jeff Bingaman, paying her $2.5 million between January and June 1999 to try to block licensing of an AT&T, MCI, and Sprint consortium to lay cable from the U.S. to Japan.
Despite the massive layoffs, unpaid employees, and cancelled pensions as a result of the bankruptcy, executives received huge bonuses and loan relief.
- "Global Crossing Limited Offer To Exchange Up To $750,000,000 12% Senior Secured Notes due 2015 which have been registered under the Securities Act of 1933 for any and all outstanding 12% Senior Secured Notes due 2015". U.S. Securities and Exchange Commission.
- "Level 3 to Acquire Global Crossing" (Press release). Business Wire. April 11, 2011.
- "Global Crossing Completes Acquisition of Impsat" (Press release). Thomas Register. May 22, 2007.
- O'BRIEN, TIMOTHY L. (August 15, 2004). "A New Legal Chapter for a 90's Flameout". The New York Times.(subscription required)
- Stern, Christopher (January 29, 2002). "Global Crossing Files for Bankruptcy". The Washington Post.
- "Level 3 Completes Acquisition of Global Crossing" (Press release). PR Newswire. October 4, 2011.
- FABRIKANT, GERALDINE; ROMERO, SIMON (February 11, 2002). "How Executives Prospered as Global Crossing Collapsed". The New York Times.(subscription required)
- "The Drexel Connection at Global Crossing". Bloomberg L.P. March 11, 2002.(subscription required)
- "The Rise And Fall Of Global Dreams". The New York Times. March 3, 2002.(subscription required)
- HOLSON, LAURA M. (October 12, 2000). "Fast Times at Global Crossing; Enjoying the Spotlight While Building An Upstart in Telecommunications". The New York Times.(subscription required)
- Bulkley, Kate (November 17, 1999). "Corporate profile: Global Crossing - His company is two years old. But it's already worth pounds 20bn". The Independent.
- "US West, Global Crossing tie". CNNMoney. May 17, 1999.
- Blumenstein, Rebecca (July 19, 1999). "Qwest Wins U S West for $35 Billion, Ending Duel With Global Crossing". The Wall Street Journal.(subscription required)
- "Global Crossing Sponsors NASCAR Race In New York" (Press release). Business Wire. August 11, 2000.
- "Global Crossing completes merger with Frontier". Marketwatch. September 28, 1999.
- SCHIESEL, SETH (September 8, 1999). "Microsoft to Join Fiber Optic Venture in Asia". The New York Times.(subscription required)
- "Global Crossing Completes Acquisition of Racal Telecom" (Press release). Business Wire. November 24, 1999.
- "Hutchison Whampoa and Global Crossing Complete Telecom Joint Venture in Hong Kong" (Press release). Hutchinson Whampoa. January 10, 2000.
- DOUGLASS, ELIZABETH (March 18, 2000). "Global Crossing's Annunziata Gets $160 Million for 13 Months on Job". Los Angeles Times.
- DOUGLASS, ELIZABETH (August 19, 2000). "Rescue Mission Steers Craft Operator Into Uncharted Waters". Los Angeles Times.
- DOUGLASS, ELIZABETH (October 14, 2001). "Global's Lost Connection". Los Angeles Times.
- "Global Crossing CEO out". CNNMoney. October 11, 2000.
- Bartash, Jeffry (July 12, 2000). "Global Crossing sells local business". Marketwatch.
- Bartash, Jeffry (January 29, 2002). "Anatomy of Global Crossing's failure". Marketwatch.
- "Global files for bankruptcy". CNNMoney. January 28, 2002.
- KOLESNIKOV, SONIA (April 30, 2003). "ST Telemedia to buy Global Crossing stake". United Press International.
- "Hutchison acquires Asia Global Crossing's interest in Hong Kong joint ventures for US$120 Million" (Press release). Hutchinson Whampoa. April 29, 2002.
- Granelli, James S.; DOUGLASS, ELIZABETH (November 18, 2002). "Asia Global Crossing Files for Bankruptcy". Los Angeles Times.
- Hopkins, Jim; Krantz, Matt (February 26, 2002). "Global's warning signs there, Wall St. was unaware". USA Today.
- "Global Crossing Stock to Begin Trading on NASDAQ National Market Today" (Press release). ST Telemedia. April 1, 2004.
- Pham, Alex; Colker, David (March 20, 2004). "Global Crossing Ex-Execs to Pay $324 Million". Los Angeles Times.
- Lomas, Natasha (October 11, 2006). "Global Crossing snaps up Fibernet". ZDNet.
- Ackman, Dan (March 13, 2002). "House Committees To Investigate Global Crossing". Forbes.
- Hamburger, Tom; Harwood, John (March 4, 2002). "Global Crossing Got Little in Return For Its Big Political Contributions". The Wall Street Journal.(subscription required)
- Blumenstein, Rebecca; Solomon, Deborah; Chen, Kathy (February 21, 2002). "Global Crossing Cosseted Executives As Pink Slips Loomed, Stock Fell". The Wall Street Journal.(subscription required)