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Tyco International Ltd
Tyco International Ltd. (TYC) and its convicted former chief executive officer, L. Dennis Kozlowski, settled a 10-year-old lawsuit in which the company sought the return of money, stock and loans.
Kozlowski, 65, was found guilty in 2005 of New York state charges that he stole from the company through unauthorized bonuses and inflated stock gains. He is serving a sentence of 8 1/3 years to 25 years and is currently on work release from a state prison in Manhattan. The trial of the company’s lawsuit was set to begin next week in federal court in Manhattan.
In Kozlowski’s criminal trial, prosecutors regaled jurors with tales of how he spent the money he looted from the company. The government pointed to luxuries paid for with Tyco funds that included a $30 million Fifth Avenue apartment, a $6,000 shower curtain and a $15,000 umbrella stand.
“An agreement in principle was reached today by the parties,” Ira Gottlieb, a Tyco spokesman, said yesterday in a statement. He declined to comment further.
Tyco, based in Schaffhausen, Switzerland, makes security and fire-detection systems. Robert Shwartz, a lawyer representing Kozlowski, and Marshall Beil, a lawyer for the company, didn’t immediately respond to messages seeking comment on the settlement or its terms. Terms of the agreement weren’t disclosed.
Kozlowski and Mark Swartz, Tyco’s former chief financial officer, were convicted in June 2005 of securities fraud, grand larceny and falsifying business records. Jurors found that they stole about $137 million in unauthorized bonuses and other pay and made $410 million from the sale of artificially inflated stock. Kozlowski was denied parole in April.
An earlier trial resulted in a mistrial after a juror received threats.
The case is Tyco International Ltd. v. Kozlowski, 02- CV-7317, U.S. District Court, Southern District of New York (Manhattan).
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