UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YOR K x

Transcription

1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YOR K x In re GLOBAL CROSSING, LTD. MASTER FILE NO. ERISA LITIGATION 02 Civ (GEL) CONSOLIDATED AMENDED MASTER CLASS ACTION COMPLAINT OF ERISA PLAINTIFFS SCOTT JOHNSON, JANET MAHONEY, AND BRUCE HILL FOR PLAN- WIDE RELIEF UNDER THE GLOBAL CROSSING EMPLOYEES' RETIREMEN T SAVINGS PLAN ERISA Lead Counsel Committee : KELLER ROHRBACK, LLP Lynn Lincoln Sarko (Chairman) Gary A. Gotto Erin Riley Keller Rohrback LLP 1201 Third Avenue, Suite 3200 Seattle, Washington (206) BARRETT,JOHNSTON & PARSLEY George E. Barrett Douglas S. Johnston, Jr. Timothy L. Miles Barre tt, Johnston & Parsley 217 Second Avenue North Nashville, Tennessee (615) SCHIFFRIN & BARROWAY Richard Schiffrin Mark Topaz Joseph H. Meltzer Schiffrin & Barroway Three Bala Plaza East, Suite 500 Bala Cynwyd, Pennsylvania (610)

2 PREFATORY NOTE S On January 28, 2002, Defendant Global Crossing, Ltd., filed for bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. References herein to "Global Crossing" include Global Crossing, Ltd., and its wholly-owned subsidiaries, including Global Crossing North America, Inc. ("GCNA"). The bankruptcy case is on-going. A Plan of Reorganization was confirmed on January 2, Because the Effective Date has not yet occurred under the Plan of Reorganization, this action is stayed as to Global Crossing unless and until such time as the stay is lifted or relief from the stay is granted by the bankruptcy court. At this time, Plaintiffs are not prosecuting this action vis-avis Global Crossing. At such time as the bankruptcy stay may be modified or lifted to permit further prosecution of this action against Defendant Global Crossing, Plaintiffs will so notify the Court and will proceed against Defendant Global Crossing. All allegations contained herein are based on the investigation of counsel, except for allegations pertaining to the named Plaintiffs, which are based on personal knowledge. As of the date of this complaint, Plaintiffs have received only limited materials from Defendants in response to formal or informal discovery requests. As a result, it is likely that once the discovery process is underway, the roles of additional parties in the wrongdoing outlined below will be revealed and the wrongdoing itself will become further defined. In that event, Plaintiffs will seek leave to amend this complaint to add new parties and/or new claims against those parties and/or existing parties. Plaintiffs may, at or before the time they file a motion for class certification, include one or more additional proposed Class Representatives. Plaintiffs Scott Johnson, Janet Mahoney and Bruce Hill, as Participants in the Global Crossing Employees Retirement Savings Plan (the "Plan") allege the following for their Consolidated Amended Master Class Action Complaint : NATURE OF THE ACTION 1. Plaintiffs bring this action pursuant to Sections 502(a)(2) and (a)(3) of the Employe e Retirement Income Security Act ("ERISA") (29 U.S.C. 1132(a)(2) and (a)(3)). Each Plaintiff is or was a Participant in the Global Crossing Employees' Retirement Savings Plan (collectively with all plans merged or otherwise combined into the Global Crossing Employees' Retirement

3 Savings Plan, including the Frontier Corporation Employees' Retirement Savings Plan, referred to herein as the "Plan") within the meaning of 3(7) of ERISA, 29 U.S.C. 1002(7). 2. The claims set forth herein are for breach of fiduciary duty or co-fiduciary duty unde r ERISA. The Defendants are claimed to have breached their fiduciary duties to Plaintiffs and the other participants and beneficiaries of the Plan in violation of ERISA 404, 29 U.S.C. 1104, in a variety of ways, especially in connection with the Plan's acquisition and holding of Global Crossing stock. Pursuant to ERISA 409, 29 U.S.C. 1109, the Defendants are obliged to make good to the Plan the losses resulting from the breaches of fiduciary duty. These losses have yet to be calculated, but they will run to hundreds of millions of dollars. Under ERISA 409, Plaintiffs are also entitled to other appropriate equitable relief to redress the violations describe d herein. 3. Because their claims are for Plan-wide relief and apply to the Participants and Beneficiaries as a whole, and because ERISA 502(a)(2), 29 U.S.C. 1132(a)(2), authorizes Plan participants such as Plaintiffs to sue for losses suffered by the Plan as a result of breaches of fiduciary duty, and for other appropriate relief, Plaintiffs bring this action on behalf of themselves and the class of all the Participants and Beneficiaries of the Plan for whose individua l accounts the Plan held shares of stock of Global Crossing during the relevant period. In addition, under 502(a)(3) of ERISA (29 U.S.C. 1132(a)(3)), Plaintiffs seek other equitable relief from Defendants, including, without limitation, injunctive relief and, as available under applicabl e law, constructive trust, restitution, and other monetary relief. 4. The relevant period for purposes of the ERISA claims set forth in this Complaint i s the period commencing with the first date on which any Defendant knew, or, in the reasonable exercise of his or her fiduciary duties should have known, that investment in Global Crossing

4 stock under the Plan was inappropriate or imprudent, or that continued offering of Globa l Crossing stock as a Plan investment alternative was inappropriate or imprudent. Such date is n o later than January 1, The period from that date to the present is referred to herein as the "Class Period." JURISDICTION AND VENUE 5. This Court has subject matter jurisdiction over this action pursu ant to 28 U.S.C (federal question) and the specific jurisdictional statute for claims of this type, ERISA 502(e)(1), 29 U.S.C. 1132(e)(1). The Court has personal jurisdiction over Defendants pursuant to Fed. R. Civ. P. 4(k). 6. Venue is properly laid in this district pursuant to ERISA 502(e)(2), 29 U.S.C. 1132(e)(2), because the Plan was administered in this District, some or all of the fiduciar y breaches for which relief is sought occurred in this District, and one or more of the Defendant s maybe found in this District. Venue is also proper in this district under 28 U.S.C. 1391(b) and (c) because one or more of the Defendants resides in this District. THE PLAN 7. The Plan is an "employee pension benefit plan" within the meaning of ERIS A 3(2)(A), 29 U. S.C. 1002(2)(A). Further, it is an "eligible individual account plan" within the meaning of ERISA 407(d)(3), 29 U.S.C. 1107(d)(3) and also a "qualified cash or deferred arrangement" within the meaning of I.R.C. 401(k) (26 U.S.C. 401(k)). The Plan is not a party to this action. Pursuant to ERISA, however, the relief requested in this action is for the benefit of the Plan.

5 8. At all relevant times, Global Crossing was a sponsor of the Plan. ' 9. At all relevant times, the Plan had two separate components: (1) a contributory portion, which consisted of voluntary participant contributions, and (2) a matching component, which consisted entirely of employer contributions. 10. At all relevant times, Participants in the Plan could contribute from 1% to 16 % of their compensation, subject to certain limits desc ribed by the Internal Revenue Code. 11. At all relevant times, Global Crossing matched pre-tax and after-tax contributions to the Plan dollar-for-dollar up to 6 percent (3 percent prior to January 1, 2001) of the Participants ' eligible compensation. During the Class Period and until 2002, all of the matching contribution s were invested solely in Global Crossing common stock, and Participants were not permitted t o redirect the investment thereof for a period of five years. 12. At all relevant times, the Participants in the Plan were presented with alternative investment options represented to them as suitable for Participant contributions and Globa l Crossing matching contributions. One of the alternative investment options was Global Crossing common stock. 13. At all relevant times, Global Crossing common stock was an available investment for Participant contributions and matching contributions. 14. During the Class Period, the Plan was required by ERISA to provide to Participants information with respect to the investment options available under the Plan. Certain information was provided in the form of a Summary Plan Description ("SPD"). With respect the Global Crossing common stock, the SPD stated: "Global Crossing Ltd. files regular reports with the The Plan was originally formed and sponsored by Frontier Corporation as the Frontier Employees' Retirement Savings Plan. Frontier Corporation, a telephone company headquartered in Rochester, New York, was acquired by Global Crossing in a merger in September, 1999, and the Plan was continued as the Global Crossing Employees Retirement Savings Plan.

6 Securities and Exchange Commission as required by the Securities Exchange Act of You should review the information regarding "Risk Factors" contained in the Global Crossing Annua l Report on Form 10-K/A for the year ended December 31, 1999, filed with the Securities an d Exchange Commission on September 21, 2000, and later filings incorporated by referenc e herein." As a result of this statement and incorporation by reference, all statements made in Global Crossing's periodic SEC reports were communicated to Plan Participants. 15. The Plan is not and never has been a " 404(c) plan," i.e., a plan that complies with the regulations promulgated by the Department of Labor under ERISA 404(c), 29 U.S.C. 1104(c) and purports to relieve the Plan's fiduciaries of liability for the results of participants ' exercise of control over their investment decisions. In order to qualify as a 404(c) plan, a plan must provide plan participants with a broad range of diversified investment options, libera l opportunities to transfer assets among allocations, and sufficient information to make sound investment decisions, and must put participants on notice of the intention to qualify unde r 404(c). 29 C.F.R c. The Plan did not satisfy those requirements. As a result of th e failure to qualify as a 404(c) Plan, at all times the Defendants whose fiduciary responsibilitie s included responsibility for the investment of Plan assets and the designation of Plan investmen t alternatives remain liable for losses suffered as the result of the imprudent investment of Plan assets, including investments made ostensibly at the direction, in whole or in part, of Pla n Participants. Plaintiffs PARTIE S 16. Plaintiff Scott Johnson is, and at all relevant times has been, a Participant, as define d in ERISA 3(7), 29 U.S.C (7), in the Plan. Mr. Johnson resides in Provincetown, Massachusetts.

7 17. Plaintiff Janet Mahoney is, and at all relevant times has been, a Participant, as defined in ERISA 3(7), 29 U.S.C. 1002(7), in the Plan. Ms. Mahoney resides in Rochester, New York. 18. Plaintiff Bruce Hill was during the Class Period a Participant, as defined in ERIS A 3(7), 29 U.S.C. 1002(7), in the Plan. Mr. Hill resides in Syracuse, New York. Defendants 19. Defendant Global Crossing, Ltd. ("Global Crossing") is a Bermuda corporation. Global Crossing was a sponsor of the Plan. Global Crossing was a fiduciary of the Plan withi n the meaning of ERISA 3(21), 29 U.S.C. 1002(21), in that it exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, including through th e appointment of Plan fiduciaries. Global Crossing's fiduciary responsibilities extended to all aspects of the Plan's administration and management, including, without limitation, the investment of Plan assets, the designation of Plan investment alternatives, the appointment an d monitoring of Plan fiduciaries, the avoidance of conflicts of interest and the communication s made to Plan Participants. Further, to the extent that other Defendants acted in the course an d scope of their employment with Global Crossing in the conduct giving rise to liability hereunder, Global Crossing is liable for the actions of such other Defendants under the doctrine o f respondeat superior. 20. Defendant Gary Winnick ("Winnick") was at all relevant times Chairman of Global Crossing's Board of Directors and a member of the Executive Committee of the Board o f Directors (the "Executive Committee"). Winnick was involved extensively and personally in al l major Global Crossing decisions and transactions, and was informed of all materia l 6

8 developments respecting the Company. As a director, Winnick participated in the appointment of members of the "Plan Committee" (as defined in Paragraph 43), and was responsible for th e on-going monitoring of the actions of Plan fiduciaries. Winnick's fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known t o Winnick with respect to Plan investments, including Global Crossing Stock. Winnick personally participated in the preparation and dissemination to Plan Participants of communications wit h respect to the investment of their account balances in Global Crossing Stock, including, withou t limitation, through his signing of SEC filings incorporated by reference in the SPD, and b y participating in oral and written communications to Plan Participants that encouraged th e investment of their Plan balances in Global Crossing stock. By virtue of his membership on the Global Crossing Board of Directors, Plaintiffs are informed and believe that Winnick was a member of the Plan Committee during the periods that the Board of Directors failed to appoint a Global Crossing Employee Benefits Committee as required by the Plan. Winnick's fiduciary responsibilities extended to all material aspects of the Plan's management, including, withou t limitation, the investment of Plan assets, the designation of Plan investment alternatives, th e appointment and monitoring of Plan fiduciaries and the providing to those fiduciaries of materia l information, the avoidance of conflicts of interest and the communications made to Pla n Participants. 21. Defendant Dan J. Cohrs ("Cohrs ") was at all relevant times Global Crossing's Chief Financial Officer and a member of the Plan Committee and of Global Crossing's Management Committee (the "Management Committee"). Cohrs personally participated in the preparation and dissemination to Plan Participants of communications with respect to the investment of thei r account balances in Global Crossing Stock, including, without limitation, through his signing of

9 SEC filings incorporated by reference in the SPD. As a member of the Pl an Committee, Cohrs was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility and authority with respect to the investment of Plan assets and th e designation of Plan investment alternatives. In addition, because by his actions, including, without limitation, his membership on the Plan Committee, Cohrs exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionar y authority or discretionary responsibility in the administration of the Plan, Cohrs was a fiduciar y of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Cohrs's fiduciary responsibilities extended to all aspects of the Plan's administration and management, including, without limitation, the investment of Plan assets, the designation of Plan investment alternatives, the appointment and monitoring of Plan fiduciaries, the avoidance of conflicts of interest and th e communications made to Plan Participants. 22. Defendant John L. Comparin ("Comparin") served at times relevant hereto as Senior Vice President of Human Resources (August ) and Executive Vice President o f Human Resources (December 2000-present), and at all relevant times was a member of the Plan Committee and a member of the Management Committee. As a member of the Plan Committee, Comparin was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility and authority with respect to the investment of Plan asset s and the designation of Plan investment alternatives. In addition, because by his actions, including, without limitation, his membership on the Plan Committee, Comparin exercise d discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised

10 discretionary authority or discretionary responsibility in the administration of the Plan, Compari n was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Comparin's fiduciary responsibilities extended to all aspects of the Plan's administration an d management, including, without limitation, the investment of Plan assets, the designation of Pla n investment alternatives, the appointment and monitoring of Plan fiduciaries, the avoidance o f conflicts of interest and the communications made to Plan Participants. 23. Defendant Joseph P. Perrone ("Perrone") was hired by Global Crossing as Senio r Vice President, Finance, on or about May 1, In December 2000, Perrone became Executive Vice President, Finance. From and after October 1, 2000, Perrone was a member of the Plan Committee and was a member of the Management Committee. As a member of the Plan Committee, Perrone was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility and authority with respect to the investment of Plan asset s and the designation of Plan investment alternatives. In addition, because by his actions, including, without limitation, his membership on the Plan Committee, Perrone exercise d discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercise d discretionary authority or discretionary responsibility in the administration of the Plan, Perron e was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Perrone's fiduciary responsibilities extended to all aspects of the Plan's administration and management, including, without limitation, the investment of Plan assets, the designation of Pla n investment alternatives, the appointment and monitoring of Plan fiduciaries, the avoidance o f conflicts of interest and the communications made to Plan Participants. 24. Defendant Linda Woodruff ("Woodruff') was, at all relevant times the Vice President 9

11 of Compensation and Benefits with general responsibility for day-to-day operations of the Plan. In addition, Woodruff was a member of the Plan Committee. Woodruff was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility and authority with respect to the investment of Plan assets and the designation of Plan investmen t alternatives. In addition, because by her actions, including, without limitation, her membership on the Plan Committee and the day-to-day responsibility for Plan operations, Woodruff exercise d discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercise d discretionary authority or discretionary responsibility in the administration of the Plan, Woodruff was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Woodruff's fiduciary responsibilities extended to all aspects of the Plan's administration and management, including, without limitation, the investment of Plan assets, the designation of Pla n investment alternatives, the appointment and monitoring of Plan fiduciaries, the avoidance o f conflicts of interest and the communications made to Plan Participants. 25. Defendant William Norris ("Norris") was, at relevant times, the Director of Huma n Resources and a member of the Plan Committee. Norris was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility and authority with respect to the investment of Plan assets and the designation of Plan investment alternatives. In addition, because by his actions, including, without limitation his membership on the Pla n Committee, Norris exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting m anagement or disposition of the Plan' s assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, Norris was a fiduciary of the Plan within the meaning of ERISA 10

12 3(21), 29 U.S.C. 1002(21). Norris's fiduciary responsibilities extended to all aspects of the Plan's administration and management, including, without limitation, the investment of Plan assets, the designation of Plan investment alternatives, the appointment and monitoring of Pla n fiduciaries, the avoidance of conflicts of interest and the communications made to Pla n Participants. 26. Defendant K.P. Schirmuhly ("Schirmuhly") served at times relevant hereto as Director of Compensation and as a member of the Plan Committee. Schirmuhly was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direc t responsibility and authority with respect to the investment of Plan assets and the designation o f Plan investment alternatives. In addition, because by his actions, including, without limitation, his membership in the Plan Committee, Schirmuhly exercised discretionary authority o r discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionar y authority or discretionary responsibility in the administration of the Plan, Schirmuhly was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Schirmuhly' s fiduciary responsibilities extended to all aspects of the Plan's administration and management, including, without limitation, the investment of Plan assets, the designation of Plan investmen t alternatives, the appointment and monitoring of Plan fiduciaries, the avoidance of conflicts o f interest and the communications made to Plan Participants. 27. Defendant Robert Annunziata ("Annunziata") was one of Global Crossing's five Chief Executive Officers, and was, at relevant times, a member of the Board of Directors and o f the Executive Committee. As a director, Annunziata participated in the appointment of member s of the Committee, and was responsible for the on-going monitoring of the actions of Pla n 11

13 fiduciaries. Annunziata's fiduciary duty to monitor Plan fiduciaries included the duty to provid e those fiduciaries with material information known to Annunziata with respect to Pla n investments, including Global Crossing Stock. As a director, Annunziata was a fiduciary of th e Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(2 1), with direct responsibility for appointment and monitoring of Plan fiduciaries. In addition, because by his actions, including, without limitation, his actions as a director, Annunziata exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, Annunziata was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Annunziata's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and t o the providing to those fiduciaries of material information. 28. Defendant William S. Cohen ("Cohen") served at relevant times relevant as a director of Global Crossing and as a member of the Compensation Committee of the Board of Director s (the "Compensation Committee"). As a director and member of the Compensation Committee, Cohen participated in the appointment of members of the Committee, and was responsible for th e on-going monitoring of the actions of Plan fiduciaries. Cohen's fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known t o Cohen with respect to Plan investments, including Global Crossing Stock. As a director an d member of the Compensation Committee, Cohen was a fiduciary of the Plan within the meanin g of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for appointment and monitoring of Plan fiduciaries. In addition, because by his actions, including, without limitation, his membership on the Compensation Committee, Cohen exercised discretionary authority o r 12

14 discretionary control respecting management of the Plan, exercised authority or contro l respecting management or disposition of the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, Cohen was a fiduciar y of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Cohen's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and the providing to those fiduciaries of material information. 29. Defendant Barry Porter ("Porter") was at all relevant times Senior Vice President an d a director of Global Crossing. As a director, Porter participated in the appointment of members of the Committee, and was responsible for the on-going monitoring of the actions of Plan fiduciaries. Porter's fiduciary duty to monitor Plan fiduciaries included the duty to provide thos e fiduciaries with material information known to Porter with respect to Plan investments, includin g Global Crossing Stock. As a director, Porter was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for appointment and monitorin g of Plan fiduciaries. In addition, because by his actions, including, without limitation, his action s as a director, Porter exercised discretionary authority or discretionary control respectin g management of the Plan, exercised authority or control respecting management or disposition o f the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, Porter was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(2 1). Porter's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and to the providing to those fiduciaries of materia l information. 30. Defendant Lodwrick M. Cook ("Cook") was at relevant times a director of and cochairman of the Board of Global Crossing and a member of the Compensation Committee, th e 13

15 Executive Committee and the Management Committee. As a director and member of the Compensation Committee, Cook participated in the appointment of members of the Committee, and was responsible for the on-going monitoring of the actions of Plan fiduciaries. Cook's fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known to Cook with respect to Plan investments, including Global Crossing Stock. Cook also personally participated in the preparation and dissemination to Plan Participants of communications with respect to the investment of their account balances in Global Crossing Stock, including, without limitation, through his signing of SEC filings incorporated by reference in the SPD. As a director and member of the Compensation Committee, Cook was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for appointment and monitoring of Plan fiduciaries. In addition, because by his actions, including, without limitation, his membership on th e Compensation Committee and participation in communications to Plan Participants, Cook exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, Cook was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(2 1). Cook's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and the providing to those fiduciaries of material information, and to the preparation and dissemination of communications to Participants. 31. Defendant Geoffrey J.W. Kent ("Kent") was at relevant times a director of Global Crossing and a member of the Compensation Committee of the Global Crossing Board of Directors. As a director and member of the Compensation Committee, Kent participated in the 14

16 appointment of members of the Committee, and was responsible for the on-going monitoring of the actions of Plan fiduciaries. Kent's fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known to Kent with respect to Plan investments, including Global Crossing Stock. Kent also personally participated in the preparation and dissemination to Plan Participants of communications with respect to the investment of their account balances in Global Crossing Stock, including, without limitation, through his signing of SEC filings incorporated by reference in the SPD. As a director and member of the Compensation Committee, Kent was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(2 1), with direct responsibility for appointment and monitoring of Plan fiduciaries. In addition, because by his actions, including, without limitation, his membership on the Compensation Committee, Kent exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, Kent was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Kent's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries and the providing to those fiduciaries of material information, and to the preparation and dissemination of communications to Participants. 32. Defendant Mark Attanasio ("Attanasio") was at relevant times a director of Globa l Crossing, a member of the Compensation Committee of the Global Crossing Board of Directors, and a member of the Executive Committee. As a director and member of the Compensation Committee, Attanasio participated in the appointment of members of the Committee, and was responsible for the on-going monitoring of the actions of Plan fiduciaries. Attanasio's fiduciary 15

17 duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known to Attanasio with respect to Plan investments, including Global Crossing Stock. As a director and member of the Compensation Committee, Attanasio was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for appointment and monitoring of Plan fiduciaries. In addition, because by his actions, including, without limitation, his membership on the Compensation Committee, Attanasio exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, Attanasio was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Attanasio's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and to the providing to those fiduciaries of material information. 33. Defendant Thomas J. Casey ("Casey") was at all relevant times Vice Chairman of Global Crossing's Board of Directors and was Global Crossing's Chief Executive Officer until his removal from that position on October 4, At relevant times, Casey was a member of the Board of Directors of GCNA, a member of the Executive Committee and a member of the Management Committee. Casey personally participated in the preparation and dissemination to Plan Participants of communications with respect to the investment of their account balances i n Global Crossing Stock, including, without limitation, through his signing of SEC filings incorporated by reference in the SPD. As a director of Global Crossing and GCNA, Casey participated in the appointment of members of the Committee, and was responsible for the ongoing monitoring of the actions of Plan fiduciaries. As a director, Casey was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for 16

18 appointment and monitoring of Plan fiduciaries. Casey's fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known t o Casey with respect to Plan investments, including Global Crossing Stock. In addition, becaus e by his actions, including, without limitation, his actions as a director and his participation i n communications to Plan Participants, Casey exercised discretionary authority or discretionar y control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionary authority o r discretionary responsibility in the administration of the Plan, Casey was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Casey's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries and the providing to thos e fiduciaries of material information, and to the preparation and dissemination of communication s to Plan Participants. 34. Defendant Jack M. Scanlon ("Scanlon") was at relevant times a director of Global Crossing. Scanlon personally participated in the preparation and dissemination to Plan Participants of communications with respect to the investment of their account balances i n Global Crossing Stock, including, without limitation, through his signing of SEC filing s incorporated by reference in the SPD. As a director, Scanlon participated in the appointment of members of the Committee, and was responsible for the on-going monitoring of the actions of Plan fiduciaries. Scanlon's fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known to Scanlon with respect to Plan investments, including Global Crossing Stock. As a director, Scanlon was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for appointment and monitoring of Plan fiduciaries In addition, because by his actions, including, 17

19 without limitation, his actions as a director and his participation in communications to Plan Participants, Scanlon exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, Scanlon was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(2 1). Scanlon's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and the providing to those fiduciaries of material information. 35. Defendant Leo J. Hindery ("Hindery") was at relevant times a director of Global Crossing, Chief Executive Officer of Global Crossing and a member of the Executive Committee. Hindery personally participated in the preparation and dissemination to Plan Participants of communications with respect to the investment of their account balances in Global Crossing Stock, including, without limitation, through his signing of SEC filings incorporated by reference in the SPD. As a director, Hindery participated in the appointment of members of the Committee, and was responsible for the on-going monitoring of the actions of Plan fiduciaries. Hindery's fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known to Hindery with respect to Plan investments, including Global Crossing Stock. As a director, Hindery was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for appointment and monitoring of Plan fiduciaries. In addition, because by his actions, including, without limitation, his actions as a director and his participation in communications to Plan Participants, Hindery exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in th e 18

20 administration of the Plan, Hindery was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Hindery's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and to the providing to those fiduciaries of materia l information. 36. Defendant David L. Lee ("Lee") was at relevant times a director of Global Crossing. Lee personally participated in the preparation and dissemination to Plan Participants of communications with respect to the investment of their account balances in Global Crossing Stock, including, without limitation, through his signing of SEC filings incorporated by reference in the SPD. As a director, Lee participated in the appointment of members of the Committee, and was responsible for the on-going monitoring of the actions of Plan fiduciaries. Lee's fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known to Lee with respect to Plan investments, including Global Crossing Stock. As a director, Lee was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for appointment and monitoring of Plan fiduciaries. In addition, because by his actions, including, without limitation, his actions as a director and hi s participation in communications to Plan Participants, Lee exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan' s assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, Lee was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Lee's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and to the providing to those fiduciaries of material information. 37. Defendant Joseph P. Clayton ("Clayton") was at relevant times a member of the 19

21 Board of Directors of Global Crossing, a member of the Board of Directors of GCNA, and a member of the Management Committee. Clayton personally participated in the preparation and dissemination to Plan Participants of communications with respect to the investment of thei r account balances in Global Crossing Stock, including, without limitation, through his signing o f SEC filings incorporated by reference in the SPD. As a director of Global Crossing and GCNA, Clayton participated in the appointment of members of the Committee, and was responsible fo r the on-going monitoring of the actions of Plan fiduciaries. Clayton's fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information know n to Clayton with respect to Plan investments, including Global Crossing Stock. As a director, Clayton was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for appointment and monitoring of Plan fiduciaries. In addition, because by his actions, including, without limitation, his actions as a director and hi s participation in communications to Plan Participants, Clayton exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or contro l respecting management or disposition of the Plan's assets, and/or exercised discretionar y authority or discretionary responsibility in the administration of the Plan, Clayton was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Clayton's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and to th e providing to those fiduciaries of material information. 38. Defendant Abbott L. Brown ("Brown") was at relevant times a member of the Boar d of Directors of Global Crossing and a member of the Board of Directors of GCNA. As a director of Global Crossing and GCNA, Brown participated in the appointment of members of th e Committee, and was responsible for the on-going monitoring of the actions of Plan fiduciaries. 20

22 Brown's fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known to Brown with respect to Plan investments, including Global Crossing Stock. As a director, Brown was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for appointment and monitoring of Plan fiduciaries. In addition, because by his actions, including, without limitation, his actions as a director and his participation in communications to Plan Participants, Brown exercised discretionary authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, Brown was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). Brown's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and to the providing to those fiduciaries of material information. 39. Defendant James F. McDonald ("McDonald") was at relevant times a director of Global Crossing and a member of the Compensation Committee of the Global Crossing Board of Directors. As a director and member of the Compensation Committee, McDonald participated in the appointment of members of the Committee, and was responsible for the on-going monitoring of the actions of Plan fiduciaries. McDonald personally participated in the preparation an d dissemination to Plan Participants of communications with respect to the investment of their account balances in Global Crossing Stock, including, without limitation, through his signing of SEC filings incorporated by reference in the SPD. As a director and member of the Compensation Committee, McDonald was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21), with direct responsibility for appointment and monitoring of Plan fiduciaries. McDonald's fiduciary duty to monitor Plan fiduciaries included the duty to provid e 21

23 those fiduciaries with material information known to McDonald with respect to Plan investments, including Global Crossing Stock. In addition, because by his actions, including, without limitation his membership on the Compensation Committee and participation i n connection with communications to Plan Participants, McDonald exercised discretionar y authority or discretionary control respecting management of the Plan, exercised authority or control respecting management or disposition of the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, McDonald was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). McDonald' s fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and t o the providing to those fiduciaries of material information. 40. Defendant Douglas H. McCorkindale ("McCorkindale") was at relevant times a director of Global Crossing, a member of the Compensation Committee, and a member of th e Executive Committee. As a director and member of the Compensation Committee, McCorkindale participated in the appointment of members of the Committee, and wa s responsible for the on-going monitoring of the actions of Plan fiduciaries. McCorkindale' s fiduciary duty to monitor Plan fiduciaries included the duty to provide those fiduciaries with material information known to McCorkindale with respect to Plan investments, including Global Crossing Stock. McCorkindale personally participated in the preparation and dissemination to Plan Participants of communications with respect to the investment of their account balances i n Global Crossing Stock, including, without limitation, through his signing of SEC filing s incorporated by reference in the SPD. As a director and member of the Compensation Committee, McCorkindale was a fiduciary of the Plan within the meaning of ERISA 3(21), 2 9 U.S.C. 1002(21), with direct responsibility for appointment and monito ring of Plan fiduciaries 22

24 In addition, because by his actions, including, without limitation, his membership on th e Compensation Committee and participation in connection with communications to Pla n Participants, McCorkindale exercised discretionary authority or discretionary control respectin g management of the Plan, exercised authority or control respecting management or disposition o f the Plan's assets, and/or exercised discretionary authority or discretionary responsibility in the administration of the Plan, McCorkindale was a fiduciary of the Plan within the meaning of ERISA 3(21), 29 U.S.C. 1002(21). McCorkindale's fiduciary responsibilities extended to the appointment and monitoring of Plan fiduciaries, and to the providing to those fiduciaries o f material information. 41. Fictitious Defendants John Does 1-30 are residents of the United States and are or were members of the Committee during the Class Period. Their identity is now unknown to Plaintiffs. Once their identity is discovered, Plaintiffs will seek leave to amend to join them under their true names. 42. Defendants Winnick, Cohen, Cook, Kent, Attanasio, Casey, Scanlon, Hindery, Lee, Clayton, Brown, McDonald and McCorkindale are referred to herein collectively as the "Director Defendants." Defendants Winnick, Cohrs, Comparin, Perrone, Cook, Attanasio, Casey, Hinder y and McCorkindale are referred to herein as the "Board Committee Defendants." Defendant s Cohrs, Comparin, Perrone, Woodruff, Norris and Schirmuhly, and any other Defendant who wa s a member of the Global Crossing Board of Directors during a time that it failed to appoint an Employee Benefits Committee as required by the Plan, are referred to herein collectively as th e "Plan Committee Defendants." Defendants Global Crossing, Winnick, Cohrs, Kent, Clayton, Cook, Casey, Hindery, Lee, Brown, McDonald, McCorkindale and Scanlon are referred to herei n as the "Communications Defendants." 23

25 FIDUCIARY STATU S 43. ERISA requires every plan to provide for one or more named fiducia ries, who will have "authority to control and manage the operation and administration of the plan." ERISA 402(a)(1) (29 U.S.C. 1102(a)(1)). Instead of delegating fiduciary responsibility for the Plan to external service providers, as is permitted by ERISA, the Company chose instead to internaliz e the fiduciary function. In the document governing the Plan, Global Crossing, acting as Plan Sponsor, designated as Named Fiduciary the "Employee Benefits Committee" (`BBC"), a nonjuridical entity appointed by the Global Crossing Board of Directors. As a result, the EBC and its members were Plan Fiduciaries. Plaintiffs are informed and believe that at certain times during the Class Period, the Global Crossing Board of Directors failed to appoint an EBC, bu t instead permitted certain other committees, including the Frontier Management Benefit s Committee (the "FMBC"), the Frontier Management Investment Committee ("FMIC") and th e Frontier Employee Benefits Commi ttee (the "FEBC") to exercise various authority and discharge various responsibilities of the EBC with respect to the Plan. During any period that the Globa l Crossing Board of Directors failed to appoint an EBC as required by the Plan, the Global Crossing Board of Directors effectively was the EBC and therefore the members of the Board o f Directors had the direct fiduciary responsibility to discharge the functions of the EBC as contemplated by the Plan. Further, during any such time, the FMBC, the FMIC and the FEBC and their respective members were also Plan fiduciaries. The EBC and FMBC, FMIC an d FEBC, to the extent such committees other than the EBC exercised any authority or discharged responsibility with respect to the Plan, and the Board of Directors during any period that it failed to appoint the EBC as required by the Plan, are referred to herein collectively as the "Plan Committee." The Plan Committee had general administrative and oversight authority with 24

26 respect to the Plan, including the authority and responsibility to designate from time to time th e investment funds that would be available for investment under the Plan. Because the Plan Committee, and each committee or board comprised by the Committee, are not juridical entities, their respective members are also named fiduciaries of the Plan. 44. ERISA also treats as a fiduciary not only persons explicitly named as fiduciaries under 402(a)(1), but persons whose behavior entails the conduct of fiduciary functions. ERISA 3 (21) (A) (i) (29 U.S.C (21)(A)(i) makes a person (including a juridical person such as the Company) a fiduciary "to the extent... he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets...." 45. During the Class Period, the Plan Committee Defendants and the Communication s Defendants performed fiduciary functions under this standard, and thereby acted as fiduciaries of the Plan under ERISA. 46. An employer also acts in a fiduciary capacity under ERISA when it misleads employees about the character and prospects of Global Crossing for the purpose of affecting the employees' ERISA plan elections. During the Class Period, Global Crossing's communications with Plan participants, including Global Crossing's SEC filings incorporated by reference int o the communications provided to Participants, included material misrepresentations an d omissions to induce them to continue to invest in and maintain investments in Global Crossing's shares in the Plan and to accept at face value investments in Global Crossing's shares with th e employer match contributions. Global Crossing thereby also acted as a fiduciary under ERISA. SCOPE OF DEFENDANTS' FIDUCIARY RESPONSIBILITIE S 47. ERISA permits the fiduciary function to be shared among various individuals and 25