Features

LOS ANGELES — One of the major creditors lining up to salvage some of its investment in Global Crossing is trying to stop the $750 million buyout proposal put forward by the telecom firm. 

Fleet National Bank, a subsidiary of FleetBoston Financial Corp., said the price is too low and the proposed deal “may be tainted by collusion and self-dealing.” 

Fleet filed its objection in U.S. Bankruptcy Court in the Southern District of New York Friday. Under the bankruptcy plan filed by Global Crossing Jan. 28, Hutchison Whampoa of Hong Kong and Singapore Technologies Telemedia would inject $750 million for a 79 percent stake in the company. Creditors would receive the remaining 21 percent and $300 million in cash. 

Fleet said that because Global Crossing has more than $600 million of cash on hand, the buyout price would amount to less than $150 million. Global Crossing spent more than $12 billion to build a seamless fiber optic network spanning 27 countries between 1997 and this year. 

In the filing, Fleet said that recent revelations by the New York Times that two Global Crossing directors, including chairman and founder Gary Winnick, secretly invested $25 million in a firm effectively controlled by Singapore Technologies “suggest strongly that the Investment Proposal may be tainted by collusion and self-dealing.” 

Fleet also objected in its filing to termination and expense reimbursements fees of $50 million promised to Hutchison and Singapore Technologies, which it said amounts to 33 percent of the net cash offered creditors. 

Janis Burenga, a spokeswoman for Global Crossing, would not comment on Fleet’s filing except to say, “the court will ultimately decide.”