Case 17: Global Crossing (2002)

• Prof. Dr. Klaus Henselmann
• Dr. Stefan Hofmann

Had the attention not been for Enron (the scandal that had it all at the time), the demise of Global Crossing Ltd. certainly would have garnered a broader coverage. Claiming debts of more than USD 12 billion, Global Crossing abruptly collapsed into bankruptcy in early 2002. On January 28, the company filed for Chapter 11, making it one of the biggest bankruptcies in U.S. corporate history. However, the company’s swift downfall presented many of the same elements that made Enron into such a significant scandal. There were charges of fraudulent accounting and the enrichment of top executives as employees lost millions along with shareholders. But Global Crossing is also part of the wider story of the meltdown in the telecommunications industry. It epitomized the boom and bust of the so-called “broadband market”, where telephone companies and Internet service providers bought capacity to send high-speed transmissions over advanced fiber optic networks.

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