Judge refuses to hear IDT's Global Crossing bid (refuses to allow US company to outbid PRC company)

NEW YORK, Feb 27 (Reuters) - A U.S. federal judge has dismissed attempts by telephone service provider IDT Corp. (nyse: IDTc - news - people) 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 <0013.HK> 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.

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. "We have reason to believe that is in jeopardy," a spokesman for IDT told Reuters on Thursday. He added that the purpose of appearing in court was not to "upset the bankruptcy process," but to express "our national security concerns."

The spokesman said IDT had learned that Global Crossing had been forced to withdraw its application from the Committee on Foreign Investment in the United States, a panel made up of top national security and economic officials in the U.S. government.

The committee, he said, had raised national security concerns over approving the sale to Hutchison Whampoa, which is controlled by Chinese billionaire Li Ka-shing.

Global Crossing said it would not comment on the regulatory process, other than to say it has already received a green light from Judge Gerber and all 25 U.S. states where it is required. It has also won antitrust clearances in the United States, Canada, Mexico and the European Union. Experts, however, have said it is not uncommon for CFIUS to send back an application and ask the applicant to make adjustments and resubmit it. Once the form is resubmitted, the committee has another 30 days to evaluate the deal. If no decision is reached, then a 45-day investigation ensues. At the end of that, if there is still no consensus, the application is sent to the White House for review and final consideration by the president.

I looked for a biography of Judge Gerber, who blew off the IDT offer (IDT is a US company, based in New Jersey). Couldn't find one.

How does one get to be a bankruptcy judge? As a Federal judge, wouldn't one have to be nominated by a President and confirmed by the Senate? There's got to be a party affiliation here somewhere.

And it's a very strategic position sitting on lots of money and assets, with the power to direct big $$$ assets to certain people. Not accusing the Judge, but it seems like a position where there could be a lot of pressure to corrupt.

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Why didn't IDT present a bid when GC was soliciting for one?

And, technically, they can't present a bid during this 'investigation'. It would create a wrongful perception.

If they accepted a bid while Hutchinson's was being examined, then Hutchinson's was dismiss on account of security concerns, Hutchinson's would have a rebuttal opportunity to say, you turned me down for them.

This is not proper legal speak. I understand the concept; but I can't reiterate it correctly.

NOTICE OF VACANCY
UNITED STATES BANKRUPTCY JUDGE
PLANO, TEXAS

The U.S. Court of Appeals for the Fifth Circuit seeks applications from all highly qualified candidates for a 14-year appointment as a United States Bankruptcy Judge for the Eastern District of Texas at Plano. The position may require regular overnight travel to other divisions within the district.

The selection process will be confidential and competitive. The annual salary is $138,000. Only those persons with a law degree whose character, experience, ability, and impartiality qualify them to serve in the Judicial Branch should apply. Persons shall be considered without regard to race, color, sex, religion, disability, or national origin.

Those interested in applying should write to Gregory A. Nussel, Circuit Executive, U.S. Court of Appeals, Fifth Circuit, 600 Camp Street, Room 300, New Orleans, Louisiana 70130, for the qualification standards and an application form. Alternatively, these materials are available at www.ca5.uscourts.gov. THE DEADLINE FOR FILING COMPLETED APPLICATIONS IS JANUARY 24, 2003.

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