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Los Angeles Investor to Make Bid for Failed Global Crossing
- By Elizabeth Douglass
- Mar. 05 2002 00:00
LOS ANGELES -- A Los Angeles investment company that specializes in buying distressed technology companies is making a bid to land the biggest bust of them all: Global Crossing Ltd.
The investment company, Gores Technology Group, will make a bid for Global Crossing in federal bankruptcy court in New York as early as this week.
The offer represents the third bid for Global Crossing, which lost more than $5 billion building an unrivaled fiber-optic network that covers much of the globe. While its network was envied, the telecommunications company was ultimately brought down by its crushing debt and slowing demand for space on its network.
Unable to stave off anxious bankers, the Bermuda-based company filed for bankruptcy protection last month, listing $22.4 billion in assets and $12.3 billion in debt. The company has become the nation's fourth-largest bankruptcy, and the largest yet in the crumbling telecommunications industry.
Financial terms of the Gores Technology bid haven't been disclosed, but the company will offer "substantially more value" for Global Crossing's creditors than a much-criticized $750 million bid made by two Asian companies, a source familiar with the offer said Saturday.
A Gores Technology spokesman would neither confirm nor deny the pending offer, saying the company does not comment on speculation.
Gores Technology is run by Israeli immigrant Alec Gores, who has gained a national reputation as a top-flight turnaround artist. His company has acquired more than 35 mostly small technology companies over the past 12 years.
If Gores' past actions are a guide, his moves at Global Crossing would include bringing in a team of managers to rein in costs and losses, giving managers and employees a stake in the company, then turning the operations back over to company executives. In most cases, Gores has not replaced existing managers.
The investment company, Gores Technology Group, will make a bid for Global Crossing in federal bankruptcy court in New York as early as this week.
The offer represents the third bid for Global Crossing, which lost more than $5 billion building an unrivaled fiber-optic network that covers much of the globe. While its network was envied, the telecommunications company was ultimately brought down by its crushing debt and slowing demand for space on its network.
Unable to stave off anxious bankers, the Bermuda-based company filed for bankruptcy protection last month, listing $22.4 billion in assets and $12.3 billion in debt. The company has become the nation's fourth-largest bankruptcy, and the largest yet in the crumbling telecommunications industry.
Financial terms of the Gores Technology bid haven't been disclosed, but the company will offer "substantially more value" for Global Crossing's creditors than a much-criticized $750 million bid made by two Asian companies, a source familiar with the offer said Saturday.
A Gores Technology spokesman would neither confirm nor deny the pending offer, saying the company does not comment on speculation.
Gores Technology is run by Israeli immigrant Alec Gores, who has gained a national reputation as a top-flight turnaround artist. His company has acquired more than 35 mostly small technology companies over the past 12 years.
If Gores' past actions are a guide, his moves at Global Crossing would include bringing in a team of managers to rein in costs and losses, giving managers and employees a stake in the company, then turning the operations back over to company executives. In most cases, Gores has not replaced existing managers.
