Ullman and Lambert named co-chairmen at Global Crossing

Winnick announces his departure from company he founded

January 01, 2003|By BLOOMBERG NEWS

MADISON, N.J. - Global Crossing Ltd. named Myron Ullman and Jeremiah Lambert co-chairmen of the bankrupt fiber-optic network operator yesterday after the resignation of founder Gary Winnick.

Lambert, 68, and Ullman, 56, joined Global Crossing's board in April as the company, accused of inflating sales, tried to bolster investor confidence by adding independent directors. Winnick, whose sales of $578 million of company stock were the subject of a congressional probe this year, announced his departure yesterday.

"You need to get those directors who were part of the problem off quickly, and those who were not part of the problem need to stay on and provide oversight," said Roger Raber, chief executive officer of the National Association of Corporate Directors, a Washington-based consulting firm.

Global Crossing filed for Chapter 11 protection in January last year after piling up $12.4 billion in debt while building a 27-nation network for sending telephone calls and data at high speeds. Hutchison Whampoa Ltd. and Singapore Technologies Telemedia PTE have agreed to buy a majority stake in the Hamilton, Bermuda-based company for $250 million.

Lambert, a former senior partner with the law firm of Shook, Hardy & Bacon LLP, replaced Winnick in September as chairman of Asia Global Crossing Ltd. The majority-owned affiliate of Global Crossing has since agreed to sell its assets to China Netcom Communication Group as part of a reorganization plan.

Ullman is the former chairman and chief executive officer of retailer R.H. Macy & Co., which ended three years of bankruptcy proceedings in 1994. He also was director general of LVMH Moet Hennessy Louis Vuitton SA.

Both men declined to comment, Global Crossing spokeswoman Rebecca Yeamans said. Winnick is on vacation in Hawaii, said his spokesman, Scott Tagliarino. Winnick's attorney, Terry Christensen, didn't immediately return a phone call.

Lambert and Ullman, along with Alice Kane, a consultant to investment banking firm Blaylock Partners LP and a former president of asset management businesses at American International Group Inc., joined Global Crossing's board as the number of directors shrank to five.

All three are part of a committee investigating allegations by former Vice President of Finance Roy Olofson that Global Crossing misreported revenue from swaps of network use with rivals. The investigation is expected to be completed in the first quarter of this year, Yeamans said.

The U.S. Securities and Exchange Commission also is examining Global Crossing's accounting.

Among Global Crossing board members who left last year are former U.S. Secretary of Defense William S. Cohen and Geoffrey Kent, CEO of Abercrombie & Kent International, a luxury travel company.

Global Crossing's board currently includes CEO John Legere, as well as Ullman, Lambert, Kane and Lodwrick Cook, who resigned as co-chairman.

Global Crossing shares traded over the counter at 1.8 cents yesterday, down from a May 1999 peak of $64.25. The company's 9.625 percent coupon notes maturing in 2008 were unchanged at 2.75 cents on the dollar, according to data from Salomon Smith Barney.

Global Crossing's board is scheduled to meet next week to take a formal vote on the appointments, said Jim Fingeroth, a spokesman for the board.

Nevertheless, the appointments may be temporary. When Global emerges from bankruptcy protection, Hutchison Whampoa and ST Telemedia, which have agreed to buy Global Crossing, each will name four new board members. A new board chairman is to come from that group.

Two independent board members will round out the new 10-member board.

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