Global Crossing has asked a bankruptcy judge to approve a restructuring proposal that would hoist the failed high-speed telecommunications provider back in the black.

The company has not only proposed that its $12.4bn (�8.77bn) debts should be forgiven; the restructuring should even leave $700m spare cash in its coffers by September this year.

Global Crossing is set to receive a $750m investment by two Asian conglomerates, Hutchison Whampoa of Hong Kong and Technologies Telemedia of Singapore.

In exchange, the two would get a 79% stake in Global Crossing which is best known for its global fibre optic network.

Creditors and shareholders

Existing creditors would have to forgive the massive debts owed to them by Global Crossing.

In return, they would get the remaining 21% of the shares, as well as $300m in cash and $800m in notes.

Global Crossing's existing shareholders would not receive anything at all.

Controversy

The restructuring plan is highly controversial, not least because Global Crossing's filing for bankruptcy protection came at a time when it had at least $600m in cash.

"Having that kind of cash on hand is very unusual for a company seeking [bankruptcy protection]," said bankruptcy lawyer with Nossaman, Guthner Knox Elliot LLP, John Hansen.

The restructuring plans have also been attacked because its Hong Kong buyer has close links with the Chinese government.

Critics have argued that this should disqualify it from owning a company that controls up to a fifth of all the fibre optic cable leaving the US.

Political storm

In the UK, Global Crossing is responsible for rail communications.

This has prompted critics to ask the minister in charge of the railways, Transport Secretary Stephen Byers, about whether the company's collapse would affect rail safety.