We are not a legal firm or brokerage firm. We do not solicit funds or encourage such. We are simply exercising our right to group together to be heard and to listen to each other. We have assembled a private address book to compile our e-mail addresses and amount of shares owned in GBLXQ. We presently number over 300 members holding approximately (5) million shares and are still expanding, but seeking such expansion only passively.
We have engaged in a massive letter writing campaign. We share our research information with each other, The S.E.C., and D.O.J.. We also share information with the Legislative, Executive and Judicial Branches of Both Federal and State Government. We have a relationship with The Press and various Citizen Based Organizations that we "value very much". We have members researching their own legal remedies due to the many class action suits filed. We recognize the eventual inclusion of everyone in the consolidation of class actions that will occur. The creator of this site is presently not committed to any particular legal class action suit as a lead plaintiff.
John Hovel has since January 28,2002 been involved with conducting his own legal and criminal investigation while in consultation with Federal Officials and additional attorneys involved with the GBLXQ matter. He has provided information to attorneys, The S.E.C., D.O.J., U.S. Bankruptcy Court, U.S. Senate, U.S. House of Representatives, President and Vice President of The United States, The U.S. Supreme Court and The Press in General.
The results of John Hovel's investigation has resulted in the supplying of information to the S.E.C. to support specific allegations against "Certain Rogue Individuals at GBLXQ". The information was and will continue to be as necessary, delivered in the form of a petition in order to provide the utmost legal consideration by the Federal Government of The United States, and to insure the protection of his Civil Rights. He is taking a proactive position towards the removal of the "Certain Rogue Individuals at GBLXQ", the promotion of criminal charges, recovery of ill-gotten gains and supporting efforts to ensure the survival of Global Crossing Ltd..
More recently, while continuing to insure any information that becomes available to him is forwarded as necessary to the S.E.C., he has turned his attention towards attempting to promote an opinion that GBLXQ Stockholders need to acknowledge and accept their "Fiduciary Rights and Responsibilities" in this matter.
Mr. Hovel is particularly sensitive to the plight of "Severed GBLXQ Employees" and "401k Victims". He also appreciates any support and cooperation that can be developed by all parties including creditors and Bond Holders.
Mr. Hovel is also presently evaluating any and all possible ways that he could help provide insight on the need to insure proper transparency by any agent or entities that have or may be involved with the restructuring of GBLXQ.
While involved in all parts of the GBLXQ matters, it can still be said that Mr. Hovel "would rather he had not been needed to help", but he "can't say no to the need" and "there exists the possibility that stockholders may not get the best deal". "If they don't understand the role they must take in the restructuring, if they don't force their input to be considered, don't ask all the right questions and demand complete answers, the maximum value of The Network will not be recovered".
Mr. Hovel also has great confidence in, and great appreciation for the efforts of "The Fine Employees of Global Crossing", that continue to professionally work for us, "The Honest Global Crossing Minority Stockholders" and our customers.
As of April 15, 2002, GXstockholders has reached a conclusionary decision based on it's independant research into the Global Crossing Chapter 11 collapse. It was determined that the scope and seriousness of the allegations of fraud or mismanagement by persons or entities connected with Global Crossing's downfall will likely increase beyond any level previously imagined by minority investors or the press. Subsequently, The need to begin attempting to compile evedence to support such claims on behalf of honest minority Global Crossing stockholders began. It was originally expected that such evedence would quickly be forwarded to the previously contacted government representatives. Due to the potential for discovery by Global Crossing officials of the evedence likely to be used in the civil case proceedings against Global Crossing related defendants, and the plaintiff's case being greatly impacted by the discovery, plans to forward further documentation was temporarily suspended.
On May 6, 2002, certain GXstockholders members were individually contacted by Mr. Hovel to discuss the complexities of the Global Crossing investigation, and the need for establishing a higher degree of security within our group to protect the integrety of our civil case strategy. What has resulted, is a change in priorities temporarily. While continuing to support all efforts by honest minority stockholders, which includes the KAB Group LLC Stockholders Reorganization Plan, we are now focusing dirctly on the civil remedy. We have determined that the amount of damages to be sought are exponentially higher than we could have initially anticipated. At this time, we are soliciting direct contact with us by all interested class actions law firms.
As of June 5, 2002, A decision was reached to proceed with actions, without the aid of legal counsel, in matters pertaining to the bankruptcy or future criminal case proceedings. Attorneys or cases involving pending civil litigation are seperate from these matters. No law firm or attorney is willing to seriously consider being of sufficient assistance to the security holders or the debtor, without the formation first, of a security holders' committee in the bankruptcy court. Such being the case, legal documents to proceed have been drawn and will be introduced in the bankruptcy court by John Hovel. Such documents will be for the purpose to introduce motions, enter objections and petition for relief. Any evidence or exhibits will only be submitted as necessary.
We still hold that the regulating and enforcement agencies of jurisdiction, must be made to come forward and fulfill their statutory responsibilities in these matters. It would neither be just or legal in our opinion, for the stockholders to be solely responsible for the proper presentation of all evidence relevant to the bankruptcy or any criminal case. Failure on the part of the government to properly proceed, could result in the security holders being forced by necessity, to facillitate or otherwise execute those government responsibilities in a manner lacking in the proper legal tools to do so. This could jeopardize the justice system's use of evidence in these cases.
It will be necessary for Mr. Hovel to travel to New York to properly carryout our present course of actions in the Bankruptcy court, alone. There has been no willingness on the part of KAB Group LLC or Fiber Optek, to assist the security holders. Sufficient requests have been made by Mr. Hovel in the past.
A hearing was sceduled for July 11th at 9:45 am in the US Bankruptcy Court in Manhattan. The subject of the hearing is the Motion/Objection/Petition For Relief filed by John Hovel. A copy of the document is posted at our group message board. The document is lengthy, but it is highly important, critcal, and relevant to Global Crossing security holders'.
As of June 26th 2002, John Hovel received requests by telephone from both the Counsel To The Creditor's Committee and The Counsel to The Debtor. The requests were for John Hovel to volunteer to a date postponement of the scheduled July 11th hearing. John Hovel refused to a voluntary date change. A delay beyond July 11th is viewed as an attempt to place further obstacles in the path of justice and allow for the distribution of assets process to gain momentum, regardless of fraud in the case. These opposing counsels requested and were granted a telephone hearing with the judge for the purpose of requesting a hearing date change. A date change occurred. The new hearing date is July 30th 2002.
The July 30, 2002 hearing date was changed to August 7, 2002, to allow for the vacation of Judge Robert E. Gerber. An account of the hearing follows:
THE MOTIONS:( 1 ) Securityholders’ Committee: The stockholder’s motion to appoint a securuityholders’ committee was defeated begrudgingly by the judge.
In his remarks, Judge Gerber explained that he was forced to accept the document provided by Blackstone that values the company at about $1 bil. overall. He believes that the issues raised by the motion, and the testimony presented, raise serious civil liability questions. While it may be true in the future, that GX is not directly responsible for all of the debt, his hands are tied at this time. They are tied by the Blackstone asset evaluation document. The reason is solely because of the word "appears" being pertinent to the term "appears to be hopelessly insolvent". Blackstone has certified "appears". For this reason alone, the judge cannot exercise discretion and attempt to make findings of fact at the request of myself, as to the liability of an alter ego, for the purpose of establishing a committee. The examiner or perhaps the unsecured creditors may or may not proceed there later. That remains to be seen. The debtor could have gone there, but we know why it can’t, and I needed another committee to agree with me on that issue. In my closing here later, I will explain some future implications regarding my helping to establish that an alter ego exists.
The Judge and all parties cannot help but be influenced by the testimony given. They are aware that (2) boxes of documentation were brought to court. They know there is a report and that my investigation is still continuing because the trail of irregular transactions has not stopped as of yet. Other grounds argued for defeat, were that federal investigations continued. I of course argued that they were being conducted in secret and there is no assurance that anything would come of that without a stockholders’ committee that could officially intervene and interact with the "so-called" independent committee" for the purpose of insuring the interests of the debtor were represented. I also acknowledged that the generally accepted reason for the SEC investigating in secret is that it protects the image of the company. I stated that I have thus far withheld documentation of my allegations for the protection of the company, pending the SEC coming out publicly to announce it’s conducting an investigation, as it should have done by now. GX has already aborted it’s privacy and anonymity right by announcing the existence of investigations .
I never entered this motion unaware of the insolvency rules. I did enter knowing that we were involved in a matter that was not definitely subject to past precedent. This case could have set a new precedent. It still may, but I doubt it. The judge expressed a view that the legislature is considering these types of cases now.
Believe me when I tell you, the judge is not being a push over. He surprised the parties first thing by telling them that the matter would go all day. He also was not as patient or understanding with the counsel to the secured creditors as he was to the unsecured creditors or myself. JP Morgan’s counsel rose to be heard, to be sure that the judge understood that the banking group was not in agreement or opposed to the appointment of an examiner, and reserved their right to express an opinion later. The judge belittled their announcement of their silence. The counsel to the unsecured creditors reminded all that they were on a "hair trigger" towards GX management. How I see that in the future must be carefully weighed. There are far reaching potential implications that may affect the civil cases.
( 2 ) The stockholders’ motion for the replacement of the present US trustee and the appointment of an examiner.:
First let me explain that the issues raised in the motion, coupled with the WorldCom situation, caused it to be agreed before the actual hearing, that an examiner would be appointed. I was served notice of that in the responses to my motion. One must understand the dynamics that would have taken place. The US Trustee was put on the spot by not being able to answer the accusation that there was enough evidence in the case and the press, to point to fraud needing to be investigated. The US Trustee remained quiet on the issue all along, while being aware of the federal investigations. The Trustee should have appointed an examiner, but the Trustee openly relied on the "independent special GX board". So before the hearing, GX negotiated an agreement to appoint an examiner with "limited powers and scope". This was used by the Trustee to argue that it would address the extraordinary situation in this case, and that the stockholders’ committee would thereby not be needed to insure a proper investigation on behalf of the debtor. I of course argued that the negotiated agreement was an admission by GX officials that there was alleged wrong doing that could not be disproved by them, thus they had to agree.
My main point was that the company was held hostage by the guilty officials that represented an alter ego, and that if the company were free to act in it’s own interest, those officials would be gone, and they would be getting sued right now by the debtor. This argument was taken seriously by all. The only argument available to the counsel for the debtor was that GX had an independent board, and that an examiner should not be allowed to duplicate any investigation. Of course that seems ridiculous to me.
Mr. Pascazi’s argument for an examiner, was that he believed the company was burning cash at a rate worse than that being reported and would be drained, and that the press reported the on-going SEC and DOJ investigations. It was the same argument he tied to his request for a Trustee to take over the company. He was informed that on the basis of the agreement to appoint a "limited" examiner. he should understand that in essence, he came to court already having won that as I did. The judge impatiently listened to the argument being used similarly in Mr. Pascazi’s request for a Trustee. Because Mr. Pascazi offered no actual evidence of wrong doing and he also made no attempt to voice any support of the stockholders investigation, nor did he ask that it be considered, he lost his request for the appointment of a Trustee and was basically told he was finished on the matter.
Basically, the judge refused to sign the order prepared by the debtor’s counsel, ordering the negotiated appointment of an examiner with limited powers. He withheld such pending the counsel for the debtor’s addressing my specific motion and Mr. Pascazi’s motion in a new document, that would allow for a response from me and a response from Mr. Pascazi within ( 10 ) days..
Summary:
The stockholders’ equity committee is dead until there is something that changes the validity of the controlling management’s asset evaluation that now is $1 bil. overall, or the management is out and agrees to a committee, or the company sues the alter ego and claims it is necessary to subordinate debt. I don’t expect such.
Mr. Pascazi failed to get control of the company being put in the hands of a stranger. I never wanted that to happen. I wanted certain officials removed. I believe Mr. Pascazi knows as clearly as I do, that a stranger from outside the company, would likely move for a chapter 7. Maybe that is what Mr. Pascazi prefers. He never was referred to, or described himself as a party that would offer an alternative restructuring proposal. I remained quiet on that issue. I later questioned whether Fiber Optek signed a letter of confidentiality. Mr. Pascazi said they did not. They "never looked at GX’s books because they don’t trust them". They "did their own outside evaluation". He said they "came up with an amount very close to GX’s $1 bil.".
I can report that Mr. Pascazi was represented by himself Pro Ce. There was no legal counsel for Mr. Pascazi or Fiber Optek involved with his appearance. Mr. Pascazi’s demeanor was laid-back, civil but unfriendly, and he appears to be from an economic status equivalent of the average working American.
In the matter of my response to the court that is due regarding limitations on an examiner, I think it is a subject I must first carefully weigh. If I turn everything over to the court, I do not expect us to get a return on it. I would request, but may not be given, access to the examiner in return. If I make all of the report public in court, it may be used by the unsecured creditor’s to sue for the money we are suing for in the various class action cases. They could dry that money up on us. Also, if there is no way to get GX to use the report to sue the wrong doers with an intention of saving our equity, that will dry up our money in the civil cases.
GX wants the examiner to be bound by confidentiality, but my documents would not be. Any thing the examiner wants to verify from my report, can be excluded if the "independent board" claims it has already been there and done that. It may be a lose - loses situation if I submit the report and exhibits in their entirety .So if we have a lose - lose situation, I must decide what to use the report for. My options are to furnish it to the SEC and DOJ, the press, the class action attorney’s, or recover the cost of the investigation by offering it under terms of financial consideration as a consultant, or a published report.
I expect that I will answer the court in the matter of the examiner, but I do not know today what amount of detail I will provide. I am aware of the announcement of the acceptance of the Hutchison/Singtel bid. I knew it would happen. I just did not have all of the details.
Of course, I see it as all of you do, more of the same manipulation for the control of the assets by the original wrong doers. Unfortunately these guys may not get nailed until after the bankruptcy case is concluded.
On Monday, August 12, 2002, I forwarded the preliminary investigation report to the SEC, DOJ, and certain members of the press. / John Hovel
DISCLAIMER: This is an UNOFFICIAL site connected in no way with Global Crossing, Ltd. The name "Global Crossing" is a trademark of Global Crossing, Ltd