The richest man in Los Angeles, Winnick, left debts to his family after his death.

Gary Winnick, an American billionaire and founder of the Global Crossing telecommunications company, lost his fortune and left debts and the threat of property loss to his family after his death, The Wall Street Journal reported.

Global Crossing, the company he founded that promised to lay underwater fiber-optic cable around the world, made him a billionaire in less than two years, faster than the rise of oil magnate John D. Rockefeller or Microsoft co-founder Bill Gates. Winnick's fortune was estimated at $6.2 billion.

"After Gary Winnick's death at the age of 76 in 2023, the financial situation changed dramatically. Despite all his luxurious possessions — the famous estate in Bel-Air, known as Casa Encantada, a house on the beach in Malibu, an apartment in New York and an enviable art collection - he was severely short of money and mired in debt," the WSJ article says.

For example, 79-year-old widow Karen Winnick is fighting to maintain control over their homes, works of art and jewelry, which were mortgaged by her husband as collateral for a large loan.

Winnick began his career in the 1970s and early 1980s working for the "founder of the junk bond market," Michael Milken. At the company that later became Drexel Burnham, Winnick was part of Milken's inner circle, dealing with leveraged buyout transactions and trading in convertible securities.

In 1997, Winnick founded Global Crossing, convincing sponsors to finance an ambitious plan to lay new fiber across the Atlantic Ocean. What started as a single flagship submarine cable connecting the United States and Britain quickly turned into a global network project.

The authors of the article noted that Winnick promptly disposed of the money earned in Global Crossing, buying luxury houses and works of art.

"He is so rich that his housekeeper, to whom he gave shares of the company he created, is now a millionaire herself. <...> She will soon have her own housekeeper," the Los Angeles Times wrote in 1999.

In January 2002, Global Crossing filed for bankruptcy, causing its market value to plummet by tens of billions of dollars.

"The lifestyle of the Winnick family doesn't seem to have changed. The couple spent time between their estate in Bel-Air, a New York apartment and a seven-bedroom beach house in Malibu, built around the 1930s," the article says.

After the collapse of Global Crossing, Winnick became an investor in technology and media companies. In the last years of his life, he found himself embroiled in expensive litigation related to various new investments, and needed money.

"In 2020, Gary requested a $100 million revolving credit facility from CIM Group. Approximately $60 million of this amount was intended to repay the loan he already had," the WSJ noted.

As the legal costs increased, Winnick took steps to raise additional funds. In June 2023, the Winnick family put up for sale Casa Encantada for $250 million, which became the most expensive house for sale in the country.

Then Gary Winnick died suddenly on November 3, 2023. According to his wife, a few weeks after his death, she found out about the terms of the loan and all the assets pledged as collateral, including her wedding ring.

"Gary managed our family finances. I did not know that in the years leading up to his death, he was experiencing significant financial difficulties. I didn't know until Gary died that we were in debt and that Gary needed the money to pay off his debts and maintain his usual lifestyle," she wrote in court documents.

In December 2024, the law firm Winston & Strawn sued her for alleged non-payment by her late husband of approximately $314,000 in legal fees.

"Then the Winnick family stopped paying CIM. The debt rose to about $155 million. On September 26, CIM officially notified the Winnick family that the company intended to confiscate Casa Encantada and the house in Malibu, which now belonged to their three sons," the material says.

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