The announcement that Global Crossing Ltd. will be acquired by Level 3 Communications prompted an investigation on behalf of investors of Global Crossing Ltd. (NASDAQ:GLBC) over possible breaches of fiduciary duty.

The investigations by law firms concern whether certain directors and officers at Global Crossing Ltd. or others breached their fiduciary duties in connection the proposed takeover.

On Monday, April 11, 2011, Global Crossing Limited (NASDAQ: GLBC) and Level 3 Communications, Inc. (NASDAQ: LVLT) announced that they have entered into an agreement under which Level 3 Communications will acquire Global Crossing in a tax-free, stock-for-stock transaction. Under the terms and subject to the conditions of the agreement, Global Crossing Ltd. (GLBC) shareholders will receive 16 shares of Level 3 Communications (LVLT) common stock for each share of Global Crossing common stock or preferred stock that is owned at closing.
Global Crossing Ltd said that based on Level 3 Communication's closing stock price on April 8, 2011, the transaction is valued at $23.04 per Global Crossing common or preferred share, or approximately $3.0 billion, including the assumption of approximately $1.1 billion of net debt as of Dec. 31, 2010. Global Crossing has approximately 79 million basic and preferred shares outstanding and approximately 83 million shares outstanding on a fully diluted basis, giving effect to outstanding stock awards, but excluding performance-based stock grants.

In response to the takeover news shares of Global Crossing Ltd. rose from $15.02 during Friday to $26.51 in premarket on Monday.

However, in conjunction with this transaction, Level 3 Communication has signed a Voting Agreement with ST Telemedia, the company which owns approximately 60 percent of Global Crossing's stock, whereby ST Telemedia has already agreed to vote its shares in favor of the transaction, subject to certain terms and conditions. In addition Global Crossing Ltd. has performed well for its investors. Global Crossings 12months Total Revenue increased from $2.265billion in 2007 to $2.609billion in 2010.

Therefore the investigation concerns whether the Global Crossing Ltd. Board of Directors undertook an adequate and fair sales process to obtain fair consideration for all shareholders of Global Crossing Ltd. (NASDAQ:GLBC) and breached their fiduciary duties to Global Crossing (GLBC) shareholder by failing to adequately shop the Company before entering into any transaction.
The investigation concerns also whether Level 3 Communications would underpay for NASDAQ:GLBC shares, thus unlawfully harming Global Crossing Ltd. (NASDAQ:GLBC stockholders. A potential class action lawsuit would seek to maximize the amount of money and information NASDAQ: GLBC shareholders would receive in a buyout, so the law firm.