Global Crossing Ltd. founder Gary Winnick averted a $116-million verdict by settling a breach-of-contract lawsuit brought by a former business partner moments before that decision would have become official, according to jurors in the four-week civil trial held in Los Angeles County Superior Court.
By a vote of 11 to 1 on July 2, jurors concurred that there was an oral deal between Winnick and Douglas Shooker in 1993, when Shooker was affiliated with Winnick's investment firm, Pacific Capital Group Inc., one of the jurors said Thursday.
That agreement entitled Shooker to a portion of the profit from Global Crossing, the lawsuit had alleged.
"We didn't know exactly what the agreement was, but we knew there was an agreement," panel member Adrian Castagnino of Los Angeles said Thursday.
The jury voted 9 to 3 in favor of the plaintiff on the other nine questions, including the amount of damages, Castagnino said.
But those verdicts were never formalized or made public because a confidential accord took place just moments after jurors announced they'd reached a decision but before that finding would have been announced by the foreman.
"We traded offers and counteroffers in, like, 90 seconds, and then we told the judge we had a settlement," defense lawyer Terry Christensen said. "In light of the potential results, we were extremely satisfied with the settlement."
The settlement was reported last week, but details about the unofficial verdict did not emerge until Thursday.
The settlement has been sealed, and neither side would discuss whether it amounted to more or less than $116 million.
Plaintiff's attorney Suzelle Smith would say only that the accord was a "business solution" both parties could live with.
"We thought the evidence came in very well for the plaintiff," Smith said.
Shooker had been seeking as much as $1.1 billion, claiming that Global Crossing evolved from Telecommunications Development Corp., one of the start-ups in Beverly Hills-based Pacific Capital's portfolio when he and Winnick worked together. Shooker said Winnick had promised him at least 5% of the profit from any of their ventures.
Winnick had disputed that Telecommunications Development was the forerunner of Global Crossing, the undersea fiber-optic network operator that became a stock market darling in the late-1990s tech boom. Winnick also contended that "profit participation" for Shooker was at Winnick's discretion.