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Judge dismisses Global Crossing bid
NEW YORK (Reuters) -- A U.S. federal judge has dismissed attempts by telephone service provider IDT Corp. to scuttle the sale of bankrupt Global Crossing Ltd's assets to two Asian investors. IDT, citing a threat to U.S national security, on Monday said it would mount a rival $255 million bid to acquire Global Crossing's high-speed network, seeking to edge out Hong Kong's Hutchison Whampoa and Singapore Technologies Telemedia. But in a court hearing Wednesday, Judge Robert Gerber, of the U.S. bankruptcy court in Manhattan, refused to allow IDT's Chief Executive Jim Courter to present his case, saying the CEO had not first given him notice of his intention to appear in court. "I respectfully decline your request to be heard," said Gerber, who was hearing other small matters related to the closing of Global Crossing's bankruptcy case. Although IDT had held a press conference the night before, the telecommunications company is not permitted to submit a formal bid until the sale to the Hutchison group is finalized or rejected -- and that could still be weeks or months away. Struck a dealGlobal Crossing struck a deal in August giving control of the once high-flying phone company to two Asian investors for just pennies on the dollar. Under the deal, the two Asian companies would gain 61.5 percent control of Global Crossing -- which has assets estimated at $22 billion -- in return for an immediate $250 million cash infusion. In addition, when the company completes the bankruptcy reorganization, the Hutchison group is to pay Global Crossing's creditors $300 million in cash and issue them $200 million in new debt. IDT said it mounted its bid to buy Global Crossing because it heard the deal with the Hutchison group had hit a road block in the final stage of the regulatory approval process. "We have reason to believe that is in jeopardy," a spokesman for IDT told Reuters on Thursday. He added that the purpose of appearing in court was not to "upset the bankruptcy process," but to express "our national security concerns." The spokesman said IDT had learned that Global Crossing had been forced to withdraw its application from the Committee on Foreign Investment in the United States, a panel made up of top national security and economic officials in the U.S. government. The committee, he said, had raised national security concerns over approving the sale to Hutchison Whampoa, which is controlled by Hong Kong billionaire Li Ka-shing. Global Crossing said it would not comment on the regulatory process, other than to say it has already received a green light from Judge Gerber and all 25 U.S. states where it is required. It has also won antitrust clearances in the United States, Canada, Mexico and the European Union. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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