The founder and chairman of bankrupt telecommunication carrier Global Crossing Holdings Ltd. has resigned from the company.
In a letter sent to the company's board and released to the media, Gary Winnick said he had decided to step-down after completing the last of a series of tasks he had set for himself: establishing a US$25 million escrow account to benefit employees who lost money after investing their 401(k) plan in company stock.
"Having accomplished these goals, I have decided to step down from the Board of Directors effective December 31, 2002," he wrote in the letter.
Global Crossing employees who had invested in the company suffered a double blow when the carrier filed for bankruptcy early in 2002. Not only did many end up losing their jobs, but the value of the stock they held was reduced to virtually zero.
"We shared a vision of revolutionizing global telecommunications," wrote Winnick in the letter. "The collapse of the telecommunications industry, however, has taken a terrible toll on employees and investors alike, with an unprecedented loss of billions in investments and tens of thousands of jobs. I deeply regret that so many good people involved with Global Crossing also suffered significant financial loss."
Winnick himself did not do too badly out of the collapse. He sold about 10 million shares for roughly $124 million in May 2001, for which he is under investigation, and netted around $734 million through the sale of company stock since Global Crossing went public in 1998, according to a report in Tuesday's Wall Street Journal.
Global Crossing declared bankruptcy in January 2002 to become the latest in a line of once high-flying telecommunication companies that had boomed during the Internet bubble only to bust when the economy, and particularly the IT sector, hit the rocks.
At the time, the company had reached a provisional deal to be acquired by two of Asia's largest IT companies, Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte. Ltd. The deal broke down in May when creditors could not reach a definitive agreement. It was resurrected, however, and in August the companies agreed to a US$750 million sale which is awaiting regulatory approval.