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EBSA News Release: [11/17/2004]
Contact Name: Jane Norris or Gloria
Della
Phone Number: (202) 693-4676 or x8664
Final Settlement Restores $79 Million
For Global Crossing Retirement Plans
WASHINGTON—A federal district court in New York City has approved
a final settlement of $79 million for the benefit of workers and retirees of
the Global Crossing retirement plan.
“Plan fiduciaries have a responsibility to protect the long-term pension
security of their workers,” said U.S. Secretary of Labor Elaine L. Chao. “The
court's approval of this settlement restoring millions to pay retirement
benefits is a victory for workers, retirees and their families who are covered
by the Global Crossing 401(k) plan. This year, the Administration achieved
monetary results totaling $3.1 billion for retirement, 401(k), health and
other programs.”
In addition to the restitution that was recovered in the private litigation,
the settlement prohibits the company's executives from acting as fiduciaries
to ERISA-covered benefit plans for five years unless the Department of Labor
gives prior approval. The settlement covers the two former inside directors
of Global Crossing, Thomas Casey (former Chief Executive Officer) and Gary
Winnick (former Chairman of the Board), as well as the three former members
of the Employee Benefits Committee, Dan J. Cohrs, Joseph Perrone, and John
Comparin. The Secretary entered into settlement with Global Crossing's former
officers and directors in connection with the private class action lawsuit
filed on behalf of the plan participants.
The 401(k) plan lost tens of millions of dollars when its extensive stock
holdings in Global Crossing stock became virtually worthless after the company
filed for bankruptcy in 2002.
The settlement resolves the Labor Department's investigation of the Global
Crossing Retirement Savings Plan. The department's EBSA regional office in
Los Angeles and the Office of the Solicitor conducted a comprehensive investigation
of Global Crossing's ERISA plans. The investigation was coordinated through
President Bush's Corporate Fraud Task Force.
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