Bankruptcy Court Dismisses IDT's Global Crossing Bid

by Glen Shapiro, LawAndTax-News.com, New York

03 March 2003

Long-distance telecommunications provider, IDT Corp has had its plans to bid for the assets of bankrupt Global Crossing scuppered, it emerged last week.

Earlier this the month, concerns over the possibility that the Committee on Foreign Investment (CFIUS) - a panel made up of top national security and economic US government officials - would derail the planned deal between Global Crossing and Hong Kong-based Hutchison Whampoa and Singapore Technology Telemedia over national security fears, led Global Crossing to hire a top legal team to persuade the agency to sign off on the deal.

The national security fears were sparked by the fact that Global Crossing operates an extensive fibre-optic network which carries data for the US Justice Department, the CIA, and the FBI, as well as many international businesses.

Speaking last week, IDT Chairman, Howard Jonas announced his company's intention to bid for a stake in the bankrupt telecoms company, arguing that:

'We think it is against the national interests of the United States to sell this company to a foreign entity, particularly a hostile foreign entity...We know we have obligations to our shareholders, but frankly, we think we have obligations to the country too.'

According to reports, Global Crossing CEO John Legere politely dismissed IDT's offer, stressing the company's intention to continue negotiations with Hutchison Whampoa and Singapore Technology Telemedia.

This refusal was hammered home on Wednesday, when Judge Robert Gerber denied IDT Chief Executive, Jim Courter the right to present his case with regard to the offer at the US bankruptcy court in Manhattan.

'I respectfully decline your request to be heard,' he announced, explaining that this was because Mr Courter had failed to give notice of his intention to appear in court.

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