Global Crossing Ltd. was founded by Gary Winnick and three business associates in 1997. (Wikipedia, 2007) The company than when public in August of 1998, and seven months after going public Global's shares jumped threefold. Global Crossings rose to greatness quickly, and just as quickly fell. What was the cause of its fall? Was it bad planning, or poor management? How did it emerge after filling for Chapter 11 bankruptcy? What social, legal, and ethical problems did it face, and what were the three factors that influenced this companies planning.
Gary Winnick was the chairman of the company from 1997 to 2002. Some say that he was the reason for its fall others say that Winnick can't blamed, as it was his fortune that fell so quickly. Winnick sold somewhere around $420 million of Global Crossings stock. Winnick's office was said to furnished with $1 million dollar furnishing and was called the oval office. Winnick also reportedly gave over $148 million to charities during the time that he was the chairman of Global Crossings (Wikipedia, 2007)
While Winnick's spending might have been a reason for Global Crossings quick fall, one must look at the spending of the entire company. Four of Global's CEO's were giving personal loans totaling of about $23 million. These loans were also forgiven while bankruptcy was on Global's horizon. This same four CEO's were give bonuses of about $13.5 million. The office space of Global Crossing was very pricey and the renovations do on the rented space were extravagant. Global also operated five corporate jets and spent of $150 million on accounting software. (Wikipedia, 2007)
Poor planning was definitely a factor in this company's quick fall. One area that the company showed ...