Loan Relief Now

I was looking through the companies who are announcing earnings today, and lo and behold stumbled upon Global Crossing. For those who don’t know, back in the glory days of the dot com bubble, Global Crossing was one of the golden, do-no-wrong poster children. Except, of course, that they did do wrong. The executives exorbitant spending and fleecing of the company led to bankruptcy. For example, they owned 7 planes, a $50 million property for their central office in Beverly Hills, and CEO Gary Winnick bought the then most expensive home in American history at $92 million dollars. There was a Picasso in front of his office bought for $15 million. Per Wikipedia, “Between 1998 and 2001, Winnick sold approximately $420 million in Global Crossing stock. Other executives with the company sold an additional $900 million, totaling $1.3 billion, an amount equal to the Enron inside sales for the same period.^[3]“

Global Crossing’s stock went from $60/share to zero. There were numerous investigations, by the FBI, the SEC and others into their accounting practices. No charges or fines were ever levied against Gary Winnick.

Global Crossing, with 24 billion dollars in assets and 14 billion dollars in liabilities, declared bankruptcy. How can a company with a net worth of $10 billion declare bankrupcy? I don’t know. What I do know is that the shareholders lost everything.

Now, Global Crossing is back. They emerged from bankruptcy. Their stock is around $20/share. They have good earnings. They still own the original hardware, the fiber optic backbone, that made them so popular to begin with. Will anyone trust them a second time?

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