Asia Global Crossing Ltd. (AX) reached a settlement with Global Crossing Ltd. that resolves all claims between the two firms. The deal was necessary for Asia Global Crossing to close the recent sale of its assets, according to court papers recently obtained by Dow Jones Newswires.

The news agency reported that in a motion filed last Friday with the bankruptcy court, Asia Global Crossing said the settlement, which remains subject to bankruptcy court approval, is in the company's best interest because of the potential cost of litigation against Global Crossing.

A press release on Tuesday said that the Asia Netcom Corp.-Asia Global Crossing transaction has been completed.

Asia Netcom, a company organised by China Netcom Corp. (Hong Kong) on behalf of a consortium of investors, acquired substantially all of Asia Global Crossing's operating subsidiaries, excluding Pacific Crossing Ltd. and related entities.

Asia Netcom provides city-to-city connectivity and data communications solutions to pan-Asian and multinational enterprises, ISPs and carriers. According to the motion filed on Friday, Global Crossing and its subsidiaries and affiliates have asserted more than $330 million in pre-petition claims against Asia Global Crossing and nondebtor subsidiaries of Asia Global Crossing that will be acquired by Asia Netcom under the sale agreement.

Asia Global Crossing and some of its subsidiaries have asserted claims in the Global Crossing Chapter 11 case that total more than $1 billion, which would be eliminated under the settlement. The motion said the two companies "have engaged in difficult, arduous negotiations to resolve all claims against each other and their respective subsidiaries" before Asia Global Crossing filed for bankruptcy on November 17, 2002.

Asia Global Crossing and Global Crossing have also tried to "establish the contractual basis for a continuing commercial relationship."

The US Bankruptcy Court in Manhattan, which is overseeing the cases of Asia Global Crossing and Global Crossing, has scheduled a hearing for March 28 to consider the proposed settlement. Interested parties may file objections through March 24.