Judge Refuses to Hear IDT's Global Crossing Bid

Reuters ^ | Feb 27, 2003 | By Siobhan Kennedy

[Pro-Bush]

Judge Refuses to Hear IDT's Global Crossing Bid 1 hour, 2 minutes ago

By Siobhan Kennedy

NEW YORK (Reuters) - A U.S. federal judge has dismissed attempts by telephone service provider IDT Corp. to scuttle the sale of bankrupt Global Crossing Ltd's assets to two Asian investors.

IDT, citing a threat to U.S national security, on Monday said it would mount a rival $255 million to acquire Global Crossing's high-speed network, seeking to edge out a rival bid by Hong Kong's Hutchison Whampoa Ltd and Singapore Technologies Telemedia Pte.

But in a court hearing Wednesday, Judge Robert Gerber, of the U.S. bankruptcy court in Manhattan, refused to allow IDT's Chief Executive Jim Courter to present his case, saying the CEO had not first given him notice of his intention to appear in court.

"I respectfully decline your request to be heard," said Gerber, who was hearing other small matters related to the closing of Global Crossing's bankruptcy case.

Although IDT had held a press conference the night before, the telecommunications company is not permitted to submit a formal bid until the sale to the Hutchison group is finalized or rejected -- and that could still be weeks or months away.

Global Crossing -- in a bid to survive one of the biggest bankruptcy proceedings ever last January -- struck a deal in August giving control of the once high-flying phone company to two Asian investors for just pennies on the dollar.

Under the deal, the two Asian companies would gain 61.5 percent control of Global Crossing -- whose estimated assets top $22 billion -- in return for an immediate $250 million cash infusion.

In addition, when the company completes the bankruptcy reorganization, the Hutchison group is to pay Global Crossing's creditors $300 million in cash and issue them $200 million in new debt.

REGULATORY HURDLES

IDT said it mounted its bid to buy Global Crossing because it heard the deal with the Hutchison group had hit a road block in the final stage of the regulatory approval process.

[Pro-Bush]

All I can say is that I am disappointed with this outcome. A glimmer of hope is that President Bush gets to make the final decision on whether this deal goes through, even if this gets apporved in the courts. I know he'll make the correct moral decision, by not approving the sale of Global Crossing to a China controlled firm.

[Dustbunny]

Selling Global Crossing to a foreign country is not a very intelligent move.

[Poohbah]

This is what happens when you try to do your legal work in the press instead of the courts.

[The Duke]

All I can say is that I am disappointed with this outcome. A glimmer of hope is that President Bush gets to make the final decision on whether this deal goes through, even if this gets apporved in the courts. I know he'll make the correct moral decision, by not approving the sale of Global Crossing to a China controlled firm.

You mean THIS President Bush?

[Jhoffa_]

I don't see how it could be considered a wise move to give China World Comm's infrastructure...

I thought they handled allot of FEDGOV's own traffic in fact.

Who want's China sifting through it?

[Poohbah]

They won't have the contract after the deal goes through--it's under the "Buy American" laws, and there's a surplus of US-owned bandwidth.

Like I said, IDT entered late, took it to the press instead of the court, and now they wonder why the judge told 'em to STFU.

I think I might be forgiven for wondering if these guys even have the financing lined up.

[Pro-Bush]

Funny picture, but places Bush out of context of his actual beliefs and convictions.

I agree, it does seem likely that this deal will go down... right now at least. I'll wait and let this play out in the courts, Fed gov, and the media before I comment further.

I hope IDT prevails.

[FreeSpeechZone]

China is buying America

[Pro-Bush]

Only if we keep buying their products....