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In re Global Crossing Sec. & ERISA Litig.

United States District Court for the Southern District of New York

November 23, 2004, Decided ; November 24, 2004, Filed

02 MD 1472 (GEL)



GERARD E. LYNCH, District Judge:

Plaintiffs, Settling Defendants 1 [**13]  -- former officers, directors, and employees of Global Crossing Ltd. ("GCL") and Asia Global Crossing Ltd. ("AGC") (collectively "GX") -- and the law firm Simpson Thatcher & Bartlett LLP ("STB") 2 -- have submitted for this Court's approval an approximately $ 325 million partial settlement of litigation stemming from alleged accounting improprieties resulting in the artificial inflation of the price of GCL and AGC stock.  [**12]  After the Court held a fairness hearing, and the parties modified the preliminarily-approved settlement, this partial settlement was approved by order entered on November 10, 2004. This opinion sets forth the reasoning underlying that order. As will be further explicated below, the partial settlement was approved because it is fair, reasonable, and adequate.


GCL is a telecommunications company that filed for bankruptcy protection on January 28, 2002. GCL's majority-owned subsidiary, AGC, filed a separate bankruptcy petition on November 17, 2002. In the wake of GCL's (and later AGC's) bankruptcy filing, scores of plaintiffs across the country filed putative class-action and individual lawsuits alleging violations of the federal securities laws, the Employee Retirement Income Security Act of 1974 ("ERISA"), and other laws. On September 6, 2002, the Judicial Panel on Multidistrict Litigation (the "MDL Panel") centralized all pending and future GX-related cases before this Court. In re Global Crossing Ltd. Sec. & ERISA Litig., 223 F. Supp. 2d 1384, 1385-86 (J.P.M.L. 2002).

This litigation consists of more than 50 consolidated securities putative class actions, 15 consolidated putative class actions alleging violations of ERISA, and two other coordinated ERISA putative class actions. The Court has described aspects of this consolidated class action in previous opinions,  [**14]  but repeats here the story of the litigation insofar as it is pertinent to the approval of the settlement.

I. The Securities Action

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225 F.R.D. 436 *; 2004 U.S. Dist. LEXIS 23946 **


Subsequent History: Costs and fees proceeding at Pusloskie v. Winnick (In re Global Crossing ERISA Litig.), 2004 U.S. Dist. LEXIS 26073 (S.D.N.Y., Dec. 28, 2004)

Prior History: Thompson v. Winnick (In re Global Crossing, Ltd. Sec. Litig.), 221 F.R.D. 394, 2003 U.S. Dist. LEXIS 21744 (S.D.N.Y., 2003)

Disposition: Court approved partial settlement as fair, reasonable and adequate. Court certified classes as defined in Final Judgment and Approval Order, and awarded plaintiffs' counsel their attorneys' fees and expenses.


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