Global Crossing auction date pushed back again

The auction of Global Crossing Ltd. has been pushed back from today until Tuesday with a 10 p.m. EDT deadline so that those interested in acquiring the telecommunication company's assets can finalize bids and continue negotiations, according to a Global Crossing spokesman.

"The objective here clearly is to maximize the interests of all concerned parties as part of the Chapter 11 process," the spokesman said. Global Crossing filed for Chapter 11 bankruptcy protection in January.

The auction process involved "very active negotiating," said the spokesman, who asked his name not be used. "This is not an auction that is dead in the water," he said. Rather, those involved are trying to strike a "delicate balance to reach a consensus about what's best."

The auction has been postponed multiple times.

Although the company cannot say who is bidding on the assets, in recent days published reports based on unnamed sources have said that Hutchison Whampoa Ltd., a Hong Kong conglomerate, would be in on the bidding. Hutchison and Singapore Technologies Telemedia Pte. Ltd. (STT) had offered creditors US$750 million to buy a majority stake in the company. But the deal fell apart when creditors could not secure more than that for Global Crossing, which listed assets of $12 billion and liabilities of $22 billion in the bankruptcy filing with the U.S. District Court for the Southern District of New York.

Besides published reports about Hutchison, The Wall Street Journal this week reported that Global Crossing's former chief operating officer and sales director, David Walsh, plans to bid in the auction. He is chairman of Moneyline Telerate, which has backing from One Equity Partners, the private-equity branch of Bank One Corp., which recently bought the assets of Polaroid Corp. in an auction.

Global Crossing is one of numerous companies under U.S. federal investigation and has for months received frequent mention by lawmakers pushing for reform.

The company's accounting practices are under investigation by the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice. The U.S. House Committee on Energy and Commerce also is looking into the company's accounting practices and along with the House Subcommittee on Oversight and Investigations has demanded documents and access to employees in a probe aimed at determining whether documents were shredded.

Global Crossing has pledged full cooperation in the investigations and has said an internal review found the shredding allegations were unsubstantiated.

The Committee on Energy and Commerce also is examining how Global Crossing, based in Hamilton, Bermuda, with a U.S. base in New York, accounted for deals with other carriers to exchange fiber-optic capacity on each others' networks. Global Crossing has a vast undersea fiber-optic cable network. Under Generally Accepted Accounting Principles (GAAP), it is illegal for carriers to report sales associated with such deals as revenue and to report purchases as capital expenses and not operating costs.

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