WASHINGTON (Dow Jones Newswires) - The bankruptcy judge overseeing Bermuda-based Asia Global Crossing Ltd.'s (AX) Chapter 11 proceedings signed an order on Tuesday that will convert the company's case to Chapter 7, an attorney representing the company said.

Richard F. Casher told Dow Jones Newswires that the case was due to be converted at the close of business yesterday. Judge Stuart M. Bernstein of the US Bankruptcy Court in Manhattan signed the order after Asia Global Crossing and its unsecured creditors committee reached a deal on Monday.

As reported, the committee filed a motion on Thursday asking the court to convert the company's Chapter 11 case to a Chapter 7 proceeding. However, Asia Global Crossing disputed allegations in the committee's motion. Under Tuesday's order, the committee will withdraw with prejudice portions of its motion that refer to alleged fraud, dishonesty, mismanagement or breach of fiduciary duty by Asia Global Crossing, its management or its advisers. Also, the committee agreed not to pursue any litigation related to those matters, the order said.

Asia Global Crossing closed the sale of nearly all of its assets to Asia Netcom Corp. March 10, leaving the debtor company with $89.9 million. The buyer, a firm formed by China Netcom Corp. (Hong Kong), now operates the Asia Global Crossing businesses under the name Asia Netcom.

The entity in bankruptcy is still known as Asia Global Crossing after the asset sale. Tuesday's order said that Asia Global Crossing disclosed terms of its management's consulting agreements to the committee's counsel "at the earliest available opportunity after they were finalised."

Asia Global Crossing filed an objection to the motion, saying that earlier disclosures made about the consulting agreements "disprove the notion that senior management or counsel had any intent to defraud or deceive." The objection also said the company's estate didn't suffer any "injury as a result of the tardy public disclosure." As part of the order, the committee accepted that Asia Global Crossing's failure to publicly disclose the consulting pacts before June 2 "was an honest oversight and an unintended mistake" that caused no harm to the company's estate. In its motion, the committee had said Asia Global Crossing management entered "lucrative" consulting agreements with the buyer of the firm's assets, but didn't publicly disclose the terms of those agreements until three months later. Casher, of Kasowitz Benson Torres & Friedman LLP, said the committee's accusations were ``false".

The company added the committee's professionals received access to information about the sale of Asia Global Crossing's assets.