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[fhr]

After CEO`s Ouster, Qwest Tries to Rebuild Its Credibility


Dec 17, 2002 (The Denver Post - Knight Ridder/Tribune Business News via COMTEX)
-- Last spring, Qwest board member Marilyn Carlson Nelson confessed what some of
her colleagues had been thinking for months.

"This is the wrong guy for what we`re doing right now," Nelson told board
members gathering for dinner in downtown Denver`s Navarre building.

Everyone knew who she meant. They responded with quiet assent. Joe Nacchio,
Qwest`s chief executive officer, had to go.

The change, they hoped, would slingshot Qwest into a recovery phase.

But it would be tough.

Nacchio`s successor would need to make quick peace with federal investigators
burrowing into Qwest accounting practices, and slash Qwest`s crushing $26
billion debt. Then, Qwest might survive as a steady but unspectacular utility --
or as takeover bait.

No single event triggered talk of replacing Nacchio. It was everything.
Shareholders, lenders, employees, all had soured on Nacchio. One board member
described it as an erosion rather than a free-fall.

"Joe lost the support of all the people he needed," the board member said. "And
that`s what led to the board deciding it was time to move on."

Over time, the call for change had gained momentum. Hank Brown and Thomas
Stephens, other board members said, had decided months before the fateful board
meeting, whispering their concern to Qwest founder Phil Anschutz. Carlson
Nelson, Denver construction magnate Linda Alvarado and retired Kansas banker
Jordan Haines sided with them.

Anschutz saw the shift and joined it. Behind the scenes, the board began seeking
a successor.

When the time came to tell Nacchio he was out, Anschutz volunteered. He had
hired Nacchio and figured he owed the CEO the courtesy of informing him of the
board`s conclusion in person. On June 14, Anschutz boarded his company`s jet and
flew to Morristown, N.J., where he met with Nacchio for two hours at the
airport.

Nacchio accepted the decision but didn`t agree with it. Anschutz got back on the
plane, leaving details for later.

A lot was riding on those particulars. If Nacchio were fired for cause -- not
unthinkable, given that Qwest was under investigation on several fronts and
faced lawsuits and angry shareholders -- he`d get no payment.

Instead, the board allowed him to resign, a decision that was worth $12 million
to Nacchio in various payments.

"At that time, what we said is, there is no evidence of wrongdoing," a board
member said. "The man worked long and hard for this company, misguided as he may
have been."

The board even gave Nacchio a $3 million consulting contract for two years.

With a deal hammered out, Nacchio joined a farewell conference call on June 16
with Qwest`s board. He recounted successes of the past five years, including
Qwest`s growth from a startup to acquiring US West and repairing the Baby Bell`s
service record.

Board members said little.

"He was emotional. He wished us well," a board member recalled. "No bravado --
quite the contrary."

That evening, Qwest issued an announcement about Nacchio`s departure.

All told, Nacchio ended his five-year term at Qwest having personally gained
$265 million to $300 million. Just through selling Qwest stock, he netted profit
of a quarter of a billion dollars.

Despite Qwest`s difficulties, board members defend him.

"I know he made a lot of money, and I (understand) that`s a big issue," one
board member said. "Joe had all kinds of personality flaws, but he believed in
this company."

"Joe was aggressive," another board member said. "Those are the kinds of guys
that build companies."

Charles Stillman, Nacchio`s attorney, said Nacchio has been made a scapegoat for
Qwest`s troubles.

"That might be convenient, but it is simply untrue," Stillman said. "Qwest was
plagued by the same conveyance of events that affected many other telecom
companies. -- Joe is still a significant shareholder in Qwest and believes the
company will recover and prosper in the future."

Richard Notebaert was expected to save Qwest from bankruptcy, from a massive
loss of employees` savings, from forever tarnishing its relationship with
lenders and investors.

A standing ovation greeted the 54-year-old former Ameritech chief as he strolled
into the Qwest auditorium on his first day as company CEO and chairman on June
17.

Waiting for the applause to taper off, Notebaert felt embarrassment and
discomfort. He had done nothing for the company yet. These were the people who
had kept the phone lines working during Qwest`s turmoil.

"What their reaction told me was that I had judged the employees correctly,"
Notebaert recalled later. "They were fired up. They were winners. And they would
be on our side."

He would need their help, especially as the entire telecom industry sank
further.

Successive revelations of fraud at giant companies had devastated investors`
confidence in CEOs and boards alike. In two years, telecom companies had
defaulted on $92 billion in high-interest debt, including $28 billion by
WorldCom alone, according to Moody`s investor service.

All breeds of corporate giants -- including Tyco International, AOL Time Warner
and even homemaking maven Martha Stewart -- became the targets of probes by the
U.S. Securities and Exchange Commission, Congress or the U.S. Department of
Justice. Corporate America`s judgment day was at hand, and the telecom industry
was first in line.

Meanwhile, Qwest`s board, Wall Street and company insiders were realizing that
the lofty profits promised by Qwest`s global fiber-optic network were out of
reach.

That forced Qwest to shift away from the assertive pursuit of soaring telecom
revenue, the culture that Nacchio brought. Now Qwest would revert a Baby Bell
and rely on the steady flow of cash from the local-phone operations.

To Qwest`s cheering employees, Notebaert was a credible telecom-industry veteran
who had accepted the Herculean task of rescuing Qwest and their retirement
savings from oblivion. Most important to them: Dick Notebaert was not Joe
Nacchio.

Notebaert`s journey to Qwest had begun a month earlier, when Qwest founder
Anschutz called, asking him to take over the troubled company. Notebaert said he
decided quickly.

"I`ve been at this a long time, and I knew the company," Notebaert recalled
later. "My reaction was, `I`ve run Ameritech. Not many people get to be the CEO
of two (Baby Bells) when there are now only four of them.`

"Then the thought crossed my mind of, `Is there a path through the maze?` I had
to think about that for a minute, or maybe two minutes. Once we figured out
there was a path, this seemed like a great opportunity."

Notebaert had spent 31 years at Chicago-based Ameritech, working his way up to
CEO and chairman. In 1999, he sold the company to SBC Corp. and, by 2000, became
CEO of telecom-equipment maker Tellabs.

For joining Qwest, Notebaert received a salary of $1.1 million, a maximum annual
bonus of $1.65 million, a grant of 200,000 shares and 5 million stock options
that he can convert to stock at a fixed $5.10.

He took action on many fronts.

Through Wall Street, the media and advertisements, Notebaert tried to foster a
new perspective of Qwest as a reformed and reliable phone company.

He ordered new auditor KPMG, which replaced Arthur Andersen just a week before
his arrival, to dissect Qwest`s finances.

He swept out many holdovers from Qwest. Within weeks, Notebaert directly or
indirectly asked seven of Qwest`s nine executive vice presidents and seven of
its senior vice presidents to move on. Some were involved in deals under
scrutiny by state or federal investigators. Others left near the time Qwest
announced it would recalculate their divisions` financial records. Still others
simply made way for Notebaert`s crew.

Under increasing pressure from federal investigators to complete Qwest`s
housecleaning, Notebaert in November spoke with president and chief operating
officer Afshin Mohebbi. They agreed that Mohebbi, who had prodded employees to
close deals that came under congressional scrutiny, would leave.

Mohebbi, who left Qwest as one of a few top executives who sold none of the
company`s stock, declined to comment. Sources say he received most of the $5.1
million severance pay allowed in his employment contract.

Assembling his own team, Notebaert hired Oren Shaffer, his chief financial
officer at Ameritech, to replace Robin Szeliga as Qwest`s CFO. Szeliga remains
with Qwest in a lesser finance job.

More Ameritech managers joined Qwest. Like Notebaert, they forfeited their stock
options from their old jobs, a requirement if they joined a competitor.

To bolster morale among Qwest`s ranks, Notebaert resumed employment-anniversary
awards for workers -- a practice cut after the US West merger. His team pledged
to revive Qwest`s depleted charitable-giving arm, the Qwest Foundation.

On the public-relations front, Notebaert`s team scrapped Qwest`s years-old "Ride
the Light" slogan, replacing it with a "Spirit of Service" campaign that
features Qwest employees in television spots.

"I think they`ve elevated morale quite a bit," said John Thompson, vice
president of Communications Workers of America District 7, which represents
30,000 unionized Qwest employees. "The housecleaning they`ve done and the way
they`re going about doing business has been positive."

Some of Notebaert`s challenges, however, defied planning.

On July 6, Qwest learned that the U.S. Department of Justice had launched a
criminal investigation of the company.

No longer were the possibilities limited to SEC sanctions or requirements to
repay profit from stock sales. People could be hauled into court. People could
go to jail.

On top of that, Congress intended to shove Qwest under the microscope in its own
investigation.

When asked last month if the top job at Qwest had turned out to be more
challenging than he had expected, Notebaert laughed and paused before delivering
a careful answer.

"There are a lot of variables that no one could have anticipated," he said.

Notebaert and CFO Shaffer stunned Qwest`s board in their first meeting on July
23 and 24 with news that Qwest would need to erase revenue and cash flow from
its past financial books.

The figures to be "restated," as the practice is called, came from deals the SEC
was focusing on. Qwest`s new auditor, KPMG, agreed that was necessary.

Wall Street dislikes restatements, which indicate that a company erred or,
worse, lied.

The board had operated for months on pledges from its advisers and Nacchio that
Qwest`s accounting was sound. The board`s own probe found nothing amiss.

"I believe Notebaert and Shaffer said, `Folks, this is not nearly as unclear as
you think it is. This is a situation that calls for restatement,"` one board
member recalled. "And we still did not think we needed a restatement."

The board was told that the SEC`s increasingly critical perspective on
aggressive accounting, along with tighter rules, made Qwest`s actions even
tougher to defend.

Some board members didn`t like the restatement. Several said in interviews they
worried that Notebaert was too eager to abandon Qwest`s past.

But the message from the CEO and his advisers was clear: The SEC, stung by past
problems, was in no mood to compromise. Qwest even consulted now with the SEC`s
chief accountant on gray areas.

The board opted to restate.

"It`s absolutely correct that we go to the conservative end," one board member
said later. "The cost of doing battle is too great for Qwest and the Qwest
shareholders.

"I think Arthur Andersen and a lot of people within Qwest feel that the majority
of the restatement was not needed. But if you fight it, you`ll stay in SEC hell
and you have the press on you while your current auditors are saying, `No.`"

Andersen, the auditing company, maintains that the restatements aren`t needed.

For Notebaert, there was no question.

"You don`t do the right thing to play to one constituency or another," Notebaert
said. "You do it because it`s the right thing."

The right thing was a big thing.

In announcements July 28 and Oct. 28, Qwest indicated it will either erase or
substantially alter nearly $1.9 billion in revenue, at least $883 million in
cash flow and $128 million in costs on its financial books for 2000 and 2001.
Qwest will not officially make the changes to its financial books until KPMG
completes its audit, which is expected early next year.

The fallout already has rained down.

On Aug. 13, Qwest stock closed at $1.11, its lowest value ever.

The law firm Milberg Weiss Bershad Hynes & Lerach, which has sued Qwest and many
other companies, said the restatement provides "a lot of strength" to the firm`s
case.

Insurers protecting Qwest`s officers and directors from liability claims
rescinded Qwest`s policies. They argued that Qwest`s "materially false and
misleading representations and omissions" were a violation of the policies`
terms. Qwest sued, and the matter is undecided.

Some board members, however, now are concerned that Notebaert is moving too
quickly to distance Qwest from the Nacchio era. Sources say the message from
Anschutz to Notebaert is: Make sure that Qwest`s internal investigations are
thorough, not just quick.

Former Qwest employee Paula Smith was zipping to the airport in a cab at 4 in
the morning on a Monday, trying to steady a sheet of paper on her lap so she
could write the statement she would deliver to Congress.

"I`d like to tell a story, a short story," she wrote.

Immediately she scratched out the word "short."

How could the 52-year-old technical writer shortly sum up 20 years of
employment, mostly with US West? How she lost most of the savings she placed in
the company`s 401(k) program? How could she shortly sum up all the emotion, all
the sadness after losing what she thought was a college nest egg for her two
young daughters, Kelsey, 14, and Ali, 12?

Smith, like thousands of Qwest employees, like thousands of Enron employees,
like thousands of WorldCom employees, suddenly had to re-evaluate her life.

She would probably have to postpone retirement. She would probably have to rely
on other financial solutions, such as loans, to give her children a college
education.

Smith was about to put a human face on the dire numbers associated not only with
Qwest`s collapse -- but also an industry collapse -- and in front of the whole
world.

Smith`s attorney had phoned her late Sunday, asking her to testify on Tuesday
morning for a Senate subcommittee investigating Qwest`s accounting problems. She
had only a little over a day to prepare.

She put down her spaghetti ladle, found a babysitter for her daughters, packed,
lashed together some blank notebook pages and caught a cab the next morning to
the airport.

By Tuesday, Smith was dressed in a black suit and appearing before the U.S.
House Subcommittee on Oversight and Investigations, describing her financial
nightmare, detailing how it felt to watch the results of the "best, most
productive years" in her life go down the drain. Nacchio was set to speak the
same day.

"Our corporate culture was one of absolute concern for honor and good faith,"
Smith said, reading from notes with scribbles in the margins. "We wanted to
believe in the honesty of our CEO and of the company to which we`d given so many
years.

"The picture now is very bleak. Based on my last retirement statement from the
Qwest 401(k) plan, a little over $230,000 of the retirement money I once had in
Qwest stock is gone."

She closed by praising congressional efforts to try to devise laws to protect
the assets of 401(k) savings holders.

"We need help now," she said. "We need help from those who deceived us."

Later in the day, Nacchio and Gary Winnick, chairman of bankrupt Global
Crossing, took the stand to defend their reigns while Smith sat in a row of
seats just behind both of them, watching their every gesture.

She watched as Winnick, in a surprise move, offered to give $25 million of his
own money to help employees who lost their 401(k) investments. She also watched
as Nacchio defended himself, saying he followed advice from his accountants and
never advocated illegal behavior. Asked whether he would follow Winnick`s lead
and give up some of his riches for employees who lost savings, Nacchio said, no,
his company was not bankrupt.

Smith watched as members of the subcommittee debated with Nacchio the legitimacy
of certain deals.

After his comments, Smith waited on one side of the hearing room for Nacchio to
finish talking with his lawyers.

Then she saw her opening. She walked up to him and extended her hand. He
returned the handshake.

She introduced herself as a former Qwest employee.

"I`m happy you have done so much for your own children, I really am," she said.
"But mine have lost their college education."

Nacchio then dropped her hand, mumbled something and abruptly walked away.

It sounded like, "I`m sorry," she later told friends.

Eight months into its investigation of Qwest, the SEC`s Enforcement Bureau has
entered settlement talks with the company, a source said.

A deal could be announced in January, the source said, including a
multimillion-dollar fine. Similar to the SEC`s settlement with WorldCom, Qwest
most likely would not be required to admit wrongdoing.

The SEC`s investigation of individual Qwest officers would continue. If the SEC
files civil charges in the case, it could request that a judge order Qwest
officers to forfeit profit from sales of Qwest stock and ban them from serving
as officers of any public company. The SEC has so far interviewed more than a
dozen officials from Qwest and Andersen The inquiry`s focus is said to have
turned to the roles Nacchio, Mohebbi and then-CFO Szeliga played in constructing
the deals under investigation. Szeliga, with her intricate knowledge of Qwest`s
finances, could be crucial.

"She is the one," a former SEC official said. "If she were to give up
(evidence), then they have everyone else."

Szeliga and Mohebbi didn`t respond to requests for comment. Nacchio won`t
discuss some aspects of Qwest`s bookkeeping but, after he left the company, told
a congressional hearing he opposed bogus capacity-swap deals.

"Had someone brought to me any transaction -- simply to book revenues, and it
did not match where we were trying to globally or what we were trying to do
domestically, we would have killed it," Nacchio testified.

He said he nixed such a deal in June 2000 worth $680 million.

A Qwest representative would say only that the company is cooperating with the
SEC. The SEC does not comment on pending investigations.

Justice Department investigators believe they may have enough evidence for
indictments in connection with Qwest`s handing of a deal in Arizona, sources
said. Some board members described the problems in Arizona as serious.

For months, Justice has examined a 2001 deal in which Qwest agreed to wire more
than 800 schools in Arizona to the Internet. Qwest initially logged revenue and
profit from the $100 million deal in the second quarter of 2001, but the company
changed the accounting this yearfter an internal investigation.

The House examination of Qwest, meanwhile, wrapped up last week after finding no
link between Anschutz and Qwest`s accounting problems.

Going forward, a likely witness for the SEC and Justice probes is Russell Noles,
Qwest`s former director of internal audit. One of several concerned finance
executives who aired concerns internally about Qwest`s accounting in 2000 and
2001, Noles quit the company in October 2001.

Investigators for a House subcommittee looking into the accounting of Qwest and
other companies spoke with Noles.

"In our interview with him, he told us that he left because it was becoming too
difficult to navigate within the acceptable level of risk in the Qwest business
environment," Rep. Billy Tauzin, R-La., said during the hearing. "And good
people were being pushed to achieve unattainable goals."

Nacchio, however, testified that he did not recall hearing Noles` concerns about
aggressive accounting during Noles` exit interview last year.

Noles, who now works in St. Paul, Minn., met with SEC investigators in
September, according to a source close to the situation.

Other investigators may call on Noles. When Post reporters arrived last month on
the doorstep of Noles` St. Paul home, his wife told them Noles would not speak
to the news media pending interviews with the FBI.

Qwest`s board, which presided over the company`s collapse in the past two years,
is taking a lot of heat as it now tries to oversee the company`s recovery.

BusinessWeek in October dubbed Qwest`s board one of the worst in the nation.

The California public employees` retirement fund, which owns 1 percent of
Qwest`s shares, last year accused Qwest of "a blatant disregard for
shareholders" for the board`s decision to grant Nacchio a raise and other
matters.

"It seems to me that they were slow to react to most of the challenges they
faced in the past three years," said Beth Young, director of special projects at
The Corporate Library, a Portland, Maine-based firm that tracks corporate
governance issues.

"The audit committee really was far too willing for far too long to rely on
representations made by management," she said. "The other clear-cut issue is
that compensation was absolutely out of control at this company."

Qwest`s board members, however, insist they did their jobs and acted as quickly
as could be expected. They say they relied on information provided by their
outside advisers -- audit firm Andersen and law firms -- and Qwest`s executives.

"Who are you going to rely on if you don`t rely on your auditors?" one Qwest
board member asked.

They say that boards must trust their executives to provide them comprehensive,
timely and honest information.

"If a board starts to micromanage, then that`s as problematic as a board being
disconnected from what its job is," another board member said. "You can be too
involved to the point of being a hinderance."

The California retirement fund in April also blasted Qwest for "a number of
egregious conflicts of interest." In general, because of recent corporate
scandals, investors are demanding higher ethical standards from companies.

In recent weeks, Qwest has told the SEC about board members` own business
dealings with the company.

Anschutz by far did the most business with Qwest. Qwest leased office space and
bought transportation services from companies of his.

And in 1999, Anschutz and Qwest formed a joint venture called Qwest Digital
Media, which provided digital production, transmission and storage services.
Qwest put nearly $155 million into the venture. Anschutz anted $52 million. Much
of their contributions came as promissory notes to each other.

Qwest Digital Media agreed to buy $119 million in telecom services from Qwest
through 1998. It never completed the contract. Qwest and Anschutz closed the
joint venture this year, forgiving the obligations due each other on paper.

Director Linda Alvarado`s construction company did more than $1 million worth of
work for Qwest. Marilyn Carlson Nelson`s Minnesota travel and marketing
businesses collected more than $7 million from Qwest for travel services. She
left the board in June.

The Qwest board has at least one fan in its CEO and chairman.

"I feel that we have a good board with good people," Notebaert said.

Qwest`s road to recovery is clear to Notebaert.

The company must complete the second phase of its sale of the QwestDex directory
business, which will net $7 billion to pay off part of its $24.5 billion debt.

Qwest needs to further pare its bond debt, although bondholders have sued to
block the company`s proposals.

And Qwest needs to resolve the federal inquiries. The company has spent nearly
$100 million on internal and external investigations and defending itself in
court.

Even if Qwest does all that, analysts aren`t sure it can survive and thrive on
its own.

Some see Qwest treading water as the weakest of the four Baby Bells until it can
fix its problems and attract a suitor. Notebaert already has demonstrated his
capacity for the deal, selling Ameritech to SBC in 1999.

The most likely buyers are BellSouth, Sprint and SBC Corp.

"I think their chances (of remaining independent) are a little less than 50-50,"
said Susan Kalla, an analyst who follows telecom companies with Friedman,
Billings, Ramsey & Co. in New York.

The recovery of the overall market, quick or slow, will dictate much of Qwest`s
comeback, Kalla said.

The telecom industry faces tall hurdles. Baby Bells are losing phone customers
to wireless and cable operators offering phone service. And regulators have
ordered them to make their networks available to competitors at below-cost
prices.

Many telecom companies like Qwest still struggle beneath massive debt left over
from Internet-inspired spending sprees. Some may land in bankruptcy court; many
must cut their debt, perhaps at the expense of their shareholders. Most of the
carnage is over, analysts say.

Qwest most likely has endured the worst.

The company has 53,000 employees, 18,000 fewer than when it merged with US West.

Though the company is unlikely to ever again achieve the highs of 1999 and 2000,
it may survive where many others failed.

"There`s nothing wrong with companies that generate cash flow, revenues and
profits at even modest rates," said Blake Bath, an analyst with Lehman Bros.
"That`s much better than companies that grow quickly and generate poor returns."

A former Qwest executive said it`s astonishing to see the sharp cultural turn
under Nacchio thrown into reverse. Now, the company has turned once again to the
traditional by-the-book approach embraced by US West.

"You look back and you think about how the people at top made these stupid
decisions, decisions that a first-year accounting grad would be able to say,
`This is wrong,`" the executive said.

"They were pushing us to do deals, but it was like they were pushing us out of
windows and telling us to figure out how to land. Now, you`ve got to ask
yourself, `How could a company ever expect that to work forever?`"

Notebaert sees a bright future for his company. He eschews talk of a grand plan
to mend the company enough to be sold.

"What I see ahead for Qwest is success," Notebaert said. "A return to growth
over time and a group of employees that are pretty fired up."


By Kris Hudson and Miles Moffeit

To see more of The Denver Post, or to subscribe to the newspaper, go to
http://www.denverpost.com


(c) 2002, The Denver Post. Distributed by Knight Ridder/Tribune Business News.

[fhr]

Court Confirms Global Crossing`s Reorganization Plan - The U.S. Bankruptcy Court confirms Global Crossing`s plan of reorganization. - Global Crossing one step closer to emerging from Chapter 11 in early 2003.


MADISON, N.J., Dec 17, 2002 /PRNewswire-FirstCall via COMTEX/ -- Global
Crossing today announced that the U.S. Bankruptcy Court for the Southern
District of New York has confirmed its Chapter 11 plan of reorganization. The
confirmation is subject to the entry of a formal confirmation order and
documentation of the resolution of the last objection.

Today`s decision represents another major milestone in the restructuring process
that Global Crossing started on January 28, 2002. Having reached an agreement
with its creditors, Global Crossing now stands poised to emerge from the Chapter
11 process a significantly stronger enterprise.

On August 9, 2002, Global Crossing announced that Hutchison Telecommunications
Limited and Singapore Technologies Telemedia Pte. Ltd. had agreed to invest $250
million, for 61.5% ownership position in a newly constituted Global Crossing
upon its emergence from Chapter 11. The balance of the equity will be issued to
Global Crossing`s prepetition creditors. Subject to obtaining the approval of
the Supreme Court of Bermuda and to satisfying various contractual closing
conditions and the receipt of regulatory approvals, Global Crossing expects to
emerge from bankruptcy in the first half of 2003.

"Today, Global Crossing`s customers, employees and leadership team received a
clear vote of confidence in our future," said John Legere, CEO of Global
Crossing. "During the past twelve months, we`ve focused acutely on streamlining
Global Crossing`s cost structure while delivering outstanding customer service
and leading-edge products and services. As we work to secure the remaining
regulatory approvals, we`ll build on these successes to emerge a strong
competitor with an unmatched global IP-based network."

Between January and October 2002, Global Crossing signed 1,663 new and renewal
customer contracts, representing an estimated $783 million of revenue over the
life of the contracts. Global Crossing`s cash position remains secure, with
total cash in bank accounts at $683 million as of October 31, 2002. Furthermore,
the availability of Global Crossing`s global, IP-based network increased to
99.999%, enhancing reliability and resiliency for customers throughout the
restructuring.

Global Crossing`s plan of reorganization does not include a capital structure in
which existing common or preferred equity would retain any value.

ABOUT GLOBAL CROSSING

Global Crossing provides telecommunications solutions over the world`s first
integrated global IP-based network, which reaches 27 countries and more than 200
major cities around the globe. Global Crossing serves many of the world`s
largest corporations, providing a full range of managed data and voice products
and services. Global Crossing operates throughout the Americas and Europe, and
provides services in Asia through its subsidiary, Asia Global Crossing.

On January 28, 2002, Global Crossing Ltd. and certain of its subsidiaries
(excluding Asia Global Crossing and its subsidiaries) commenced Chapter 11 cases
in the United States Bankruptcy Court for the Southern District of New York
(Bankruptcy Court) and coordinated proceedings in the Supreme Court of Bermuda
(Bermuda Court). On the same date, the Bermuda Court granted an order appointing
joint provisional liquidators with the power to oversee the continuation and
reorganization of the Bermuda-incorporated companies` businesses under the
control of their boards of directors and under the supervision of the Bankruptcy
Court and the Bermuda Court. Additional Global Crossing subsidiaries commenced
Chapter 11 cases on April 23, August 4 and August 30, 2002, with the Bermuda
incorporated subsidiaries filing coordinated insolvency proceedings in the
Bermuda Court. The administration of all the cases filed subsequent to Global
Crossing`s initial filing on January 28, 2002 has been consolidated with that of
the cases commenced on January 28, 2002.

On November 18, 2002, Asia Global Crossing Ltd. and its subsidiary, Asia Global
Crossing Development Co., commenced Chapter 11 cases in the United States
Bankruptcy Court for the Southern District of New York and coordinated
proceedings in the Supreme Court of Bermuda. Asia Global Crossing`s bankruptcy
proceedings are being administered separately and are not being consolidated
with Global Crossing`s proceedings. Asia Global Crossing Ltd. is a
majority-owned subsidiary of Global Crossing. However, Asia Global Crossing has
announced that no recovery is expected for Asia Global Crossing`s shareholders.

[tdwzb]

17.01.2003 - 14:02 Uhr
EU genehmigt Übernahme in asiatischer Telekom-Industrie
Brüssel (vwd) - Die Europäische Kommission hat am Freitag die Übernahme der Global Crossing Ltd, Bermuda, durch die Telekom-Unternehmen Hutchison Telecommunications Ltd, Hong Kong, und Singapore Technologies Telemedia Pte Ltd genehmigt. Das Vorhaben war am 4. Dezember zur EU-Fusionskontrolle angemeldet und im vereinfachten Verfahren geprüft worden. Die EU-Behörde sehe keine wettbewerbsrechtlichen Schwierigkeiten in dem Fall. +++ Ali Ulucay
vwd/17.1.2003/ul/nas