Winnick Firm Seeks Payment from Global
A company controlled by Gary Winnick is demanding $500,000 in overdue rent from Global Crossing Ltd., the telecommunications company Winnick founded and helped run and now is in U.S. Bankruptcy Court proceedings.
The request for payment from North Crescent Realty V is just one of many in Global Crossing’s bankruptcy filings and is standard procedure in many respects. But with both companies effectively owned by Winnick, the rent claim represents a strange twist and further evidence of Global Crossing’s tangled relationships with companies that have close ties to the firm or its executives.
“What we have basically is Gary Winnick going after Gary Winnick,” said Michael Nighan, one of hundreds of former Global Crossing employees fighting for payment of canceled severance and unpaid business expenses. “He’s brought chutzpah into the data age.”
Howard J. Rubenstein, spokesman for Winnick, characterized the payment claim as necessary paperwork for anyone owed money by Global Crossing for services after its Jan. 28 filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
The rent claim involves Global Crossing’s Beverly Hills offices, which were leased from North Crescent Realty. North Crescent is managed by Pacific Capital Group, Winnick’s privately owned investment company.
In paperwork filed Friday, North Crescent says it has received only partial payment of rent owed for February, March and April and is owed nearly $500,000. Under general bankruptcy rules, Global Crossing is expected to pay “reasonable” bills for its daily operations while in bankruptcy.
Global Crossing won court approval to cancel its lease with North Crescent as of April 2, and the company moved out of the luxurious offices in mid-April. Global Crossing officials believe North Crescent incorrectly applied nearly $280,000 of its available security deposit to pre-bankruptcy costs instead of to the current rent bill and that the outstanding rent totals about $220,000.
Under its 1999 lease with North Crescent, Global Crossing paid about $400,000 a month in rent to use 86,740 square feet of space in the historic Beverly Hills office building, at 360 N. Crescent Drive. North Crescent said in its filing that Global Crossing’s accrued and unpaid interest on the past-due rent totaled $36,338.55 through April 30, an amount that is increasing by $84.40 each day.
