Lender Opposes Global Buyout

FleetBoston Financial Corp.’s Fleet National Bank, a lender to Global Crossing Ltd., said the fiber-optic network operator’s proposal to sell assets to two Asian rivals is unfair to creditors.

Hamilton, Bermuda-based Global Crossing, which in January filed for the fourth-largest Chapter 11 bankruptcy in U.S. history, agreed to sell a 79% stake to Hutchison Whampoa Ltd., controlled by Hong Kong billionaire Li Ka-shing, and Singapore Technologies Telemedia Ltd., for $750 million.

Fleet National Bank, which is owed at least $77 million by Global Crossing, contends the price is too low and the arrangement would give the company’s creditors less value than if it were to liquidate, according to papers filed Friday in U.S. Bankruptcy Court in New York.

The arrangement “violates a fundamental precept of the Chapter 11 process--to reorganize or otherwise liquidate property of the estate in a manner which maximizes the value available to creditors,” according to the papers.

Under the Hutchison-ST Telemedia buyout proposal, creditors owed about $12.4 billion would receive 21% of the reorganized company’s new shares, $800 million in notes and $300 million in cash, according to Bloomberg News.

In other action Friday, attorneys representing Global Crossing shareholders asked a federal judge to order the company’s auditor, Andersen, to make an inventory of which Global Crossing documents it had retained or destroyed.

The request covers all documents that Andersen had in its possession before Jan. 10, when the company instituted a policy banning document destruction.

The law firm, San Diego-based Milberg Weiss Bershad Hynes & Lerach, also asked the judge to appoint an independent expert to review and secure Global Crossing-related information at Andersen offices.

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Times staff writer Elizabeth Douglass contributed to this report.