LOS ANGELES - An investment firm that specializes in buying failed technology companies is seeking to take over Global Crossing Ltd., one of the largest companies to ever file for Chapter 11 bankruptcy protection, according to a published report. <br>
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Los Angeles-based Gores Technology Group will make a competing offer for Global Crossing in U.S. Bankruptcy Court in the Southern District of New York as early as this week, the Los Angeles Times reported Sunday. <br>
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Although it's not known how much Gores plans to offer, the company would have to beat a $750 million reorganization offer submitted by Hutchison Whampoa of Hong Kong and Singapore Technologies Telemedia. <br>
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The minimum Gores could offer would be $800 million, including a $40 million penalty fee for the two Asian companies, according to the terms of Global Crossing's bankruptcy rescue proposal. <br>
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A Gores Technology spokesman declined to comment, the newspaper said. <br>
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Momentum has been building against the deal between Global Crossing and the two companies. On Friday, one of the telecom company's major creditors, Fleet National Bank, filed a motion in federal bankruptcy court trying to stop the deal, alleging the offer is too low and the proposed deal ``may be tainted by collusion and self-dealing.'' <br>
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In addition, The New York Times recently reported that two Global Crossing directors, including chairman and founder Gary Winnick, secretly invested $25 million in a firm effectively controlled by Singapore Technologies. <br>
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The only competing bid has come from a group of shareholders who proposed raising $5.5 billion over the next three years to pay creditors, although independent financial experts doubt they would be able to do that given the public's lack of faith in Global Crossing. <br>
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It's not known what Gores plans to do with the company. It's likely Gores, which has acquired more than 35 technology companies over the past 12 years, including MicronPC, Verifone and Learning Co., will try to salvage the company's $12 billion worldwide fiber optic network. <br>
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When Bermuda-based Global Crossing, which has its executive offices in Beverly Hills, filed for bankruptcy protection on Jan. 28, it was the nation's fourth-largest publicly traded company to do so and the largest in the failing telecommunications industry. It listed $22.4 billion in assets and $12.3 billion in debt.
