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Global Crossing stock falls
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May 23, 2000: 2:35 p.m. ET
Investors may be wary of suit against Tyco, which calls it a payment dodge
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NEW YORK (CNNfn) - Stock in Global Crossing Ltd. fell Tuesday after the company reported that its South American Crossing Ltd. unit filed a $1 billion lawsuit against a unit of Tyco International Ltd. for breach of contract relating to the installation of a fiber-optic cable system.
 The suit, filed Monday by the Hamilton, Bermuda-based telecommunications company, alleges "tortious conduct and breach of contractual obligations" related to Tyco's agreement to install the South American Crossing fiber-optic cable system and certain other projects. Further details were not immediately available.
In addition, Global Crossing's subsidiary, Atlantic Crossing Ltd., together with some of its affiliates, filed arbitration claims against Tyco (TYC: Research, Estimates) for breaches of its obligations under various contracts.
In early-afternoon trading Tuesday, Global Crossing stock had fallen 2-29/64 to 25-9/16.
Philip Wohl, an analyst with Standard & Poors Equity Group, attributed the stock's performance to idle talk on Wall Street. "People are saying that maybe it wasn't the best decision on their part to use Tyco, and so maybe their network isn't in as good a shape as people thought," he said.
Wohl said he doesn't believe the talk. "I think the network's fine, it's a solid company and they'll wind up settling (the suit) somehow."
"We deeply regret having to resort to litigation with Tyco, our vendor for a number of our early systems," Leo Hindery, chief executive of Global Crossing (GBLX: Research, Estimates), said.
"But after spending nearly a year seeking unsuccessfully to resolve our differences, we have no alternative to legal action in order to enforce our rights and protect our shareholders," he added.
Tyco issued a statement late Monday alleging Global Crossing's suit was a tactic to avoid payment for services performed by the Tyco's Submarine Systems unit.
"We have not yet seen a copy of the lawsuit," the statement said. "However, we believe that the announcement issued late this afternoon is part of an ongoing effort by Global Crossing to avoid payment of outstanding balances due as a result of work performed by Tyco Submarine Systems Ltd." 
-- from staff and wire reports
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