Gary Winnick, founder and chairman of the bankrupt telecommunications company Global Crossing, said Monday he will resign from the board of directors effective Tuesday.
In a letter to the board, Winnick said he is stepping down after helping develop a reorganization plan for the company and making good on his pledge to reimburse $25 million to employees who owned company stock in their retirement plans.
A company spokeswoman said the board will meet early next month to name a replacement.
Global Crossing was once one of the hottest high-tech companies that had hoped to dominate the market for high-speed data communications. The Bermuda-based company built a 100,000-mile fiber-optic network that connects more than 200 cities in 27 countries.
The company's collapse came as the much-expected traffic failed to materialize after the Web economy fizzled last year.
Winnick's announcement comes a week after the U.S. Justice Department, following a probe of Global Crossing's accounting practices, decided not to seek criminal charges against company executives.
The company is also under investigation by the Securities and Exchange Commission, and investors have filed dozens of lawsuits.
Winnick deposited $25 million into an escrow account two weeks ago, although it is unclear how the money will be distributed to employees who had part of their 401(k) plans invested in company stock.
Global Crossing sought bankruptcy protection in January. By then senior executives had sold hundreds of millions of dollars of their stock options. Investors lost billions of dollars.
Winnick himself sold $734 million worth of stock, including $123 million in the weeks before the telecommunications company began to collapse.
A federal judge in New York this month approved a Global Crossing reorganization plan that would leave investors with nothing and give debtholders pennies on the dollar, as well as a minority stake in the re-emerging firm.
In his letter, Winnick said the company was in good hands with chief executive officer John Legere.
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