News
Corporate
Mar. 1, 2002
Ex-Vice President Sues Telecom Firm for Firing
LOS ANGELES - After months of trying to negotiate, a former top executive of Global Crossing has filed a complaint in Los Angeles federal court, alleging officers of the bankrupt Bermuda-based telecommunications company defamed and fired him when he raised concerns about the company's accounting practices.
Roy Olofson, Global Crossing's former vice president of finance, filed suit Tuesday in U.S. District Court against the company's officers and directors, including Chairman Gary C. Winnick and Joseph P. Perrone, executive vice president of finance. Olofson v. Winnick, CV-1693 (C.D. Cal., filed Feb. 27, 2002).
According to the lawsuit, Olofson discovered the alleged misleading transactions last year and tried to discuss his concerns honestly with Winnick, Perrone and others. Olofson alleges that the company officers first tried to entice him to join the conspiracy. When that failed, they had him fired, the lawsuit states.
Olofson also alleges that Winnick defamed him by calling him an "extortionist" during a town hall meeting in front of 60 to 70 Global Crossing employees.
"Winnick and Perrone apparently believed they could discredit Mr. Olofson to such an extent that no one would believe him," Paul Murphy, Olofson's co-counsel at O'Neill, Lysaght & Sun in Santa Monica, said. "They were wrong."
Global Crossing spokeswoman Tisha Kresler said that the company is aware of the suit but that it was inappropriate to comment until it was reviewed.
Kresler referred to a Feb. 4 statement involving Olofson, in which the company called its accounting and reporting practices "entirely appropriate."
The company also questioned Olofson's motives. Global Crossing said that it terminated Olofson's employment on Nov. 30 as part of a substantial reduction of its work force. Afterward, Global Crossing alleged that Olofson threatened to take legal action against it for wrongful termination unless a multimillion-dollar payment was made to him.
The company refused.
Global Crossing, formed in 1999 from a merger between a Bermuda-based fiber optics cable specialist and a U.S. telecommunications firm, was regarded as one of the most promising of the new generation of telecom providers.
But the company acquired heavy debts and was hit hard by a slowdown in global telecommunications spending over the last two years.
In recent months, Global Crossing has been the target of dozens of shareholder lawsuits in Los Angeles and New York after its stock plummeted 99 percent over the past year, from more than $17 to 64 cents a share.
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Susan Mcraen
Daily Journal Staff Writer
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