Printer-Friendly Version
Archived News Release Caution: Information may be out of date.
OPA News Release: [07/20/2004] Contact Name: Ed
Frank Phone Number: (202) 693-4676
U.S. Secretary of Labor Elaine L. Chao Announces
Settlements for Global Crossing Retirement Plans
WASHINGTON U.S. Secretary of Labor Elaine L. Chao today
announced settlements with former directors and officers of Global Crossing
stemming from the Departments investigation of the Global Crossing
Retirement Savings Plan. The 401(k) plan lost tens of millions of dollars as a
result of its extensive stock holdings in Global Crossing stock, which lost
virtually all of its value. 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 the agreements in connection with the
proposed settlement of the private class action lawsuit brought on behalf of
the participants of the plan. If the court approves the class-action
settlement, the total recovery will be $79 million, including $25 million that
Winnick placed in an irrevocable escrow account for the plan at the Secretary's
behest, and an additional $54 million funded by defendants insurance
policies in the private action.
I am pleased that the Global Crossing workers, retirees and their
families will receive a significant financial recovery, said U.S.
Secretary of Labor Elaine L. Chao. Fiduciaries have a serious and
significant responsibility to protect the long term pension security of their
workers. I hope this lesson gets through to others.
Under the terms of the new agreements, the former Global Crossing
fiduciaries are prohibited from acting as fiduciaries to ERISA-covered benefit
plans for five years unless they first notify the Department of Labor of their
intention to serve as fiduciaries, and the Department agrees. The agreements
are predicated upon approval of the class action settlement, and may be
terminated by the Department if the class action settlement is not
approved.
The settlement resulted from a comprehensive investigation conducted by
the Los Angeles Regional Office of the Departments Employee Benefits
Security Administration and the Office of the Solicitor. It was coordinated
through President Bushs Corporate Fraud Task Force.
# # #
_________________________________________________________________
Archived News Release Caution: Information may be out of date.
|