Global Crossing to Take $8 Billion Write-Down
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Struggling voice and data carrier Global Crossing Ltd. said in a court filing Tuesday that it will take an $8 billion goodwill write-down in the fourth quarter to reflect the drop of the value of intangible assets like reputation. The bankrupt telecom also warned that it will take a future multi-billion dollar write-off of tangible assets, like its underutilized network, but did not say when.
The company also sought the bankruptcy court's approval of a new employment agreement for Chief Executive Officer John J. Legere. The agreement would cut Legere's salary to $770,000 (a 30 percent drop) during the restructuring. However, the agreement also stipulates an annual bonus equal to 125 percent of his base salary if he meets certain performance goals.
Additionally, Global Crossing said it is covering $8.8 million in taxes for Legere. The $8.8 million is in connection with the forgiveness of a $10 million loan to Legere from Asia Global Crossing.
In related news, The New York Times Wednesday reported that the identities of more than 50 companies that had expressed confidential interest in acquiring Global Crossing were revealed in an e-mail message from the telecom's attorneys.
Among the recipients were international telecoms like Verizon Communications, the BT Group, Deutsche Telekom, Telefónica of Spain and Teléfonos de Mexico. Other recipients included Credit Suisse First Boston, Bank One, the Canadian Imperial Bank of Commerce, the Quadrangle Group of New York, the Carlyle Group of Washington, Bertelsmann and the British utility Scottish and Southern Energy.
Hong Kong's Hutchison Whampoa and Singapore Technologies Telemedia have already signed letters of intent to bid for the company.