Tyco settles shareholder lawsuits for $3 billion

[JURIST] Tyco International [corporate website; JURIST news archive] said Tuesday that it has reached an agreement [press release] to settle most of the class actions pending against it by investors who were harmed by the actions of the company's former top executives. The settlement, which is subject to the approval of the largest shareholders and the federal court, requires Tyco to establish a $2.975 billion cash fund to pay investor losses, and also to give plaintiffs half of any recoveries made in the company's lawsuits against former CEO Dennis Kozlowski, former CFO Mark Swartz [JURIST news archives], and former board member Frank Walsh. Shareholders still have pending claims against PricewaterhouseCoopers [corporate website], Tyco's former auditor.

The shareholder class action against Tyco was certified [order, PDF; AP report] by the District of New Hampshire [official website] last June. Kozlowski and Swartz were found guilty of looting the company and defrauding its shareholders out of more than $150 million in unauthorized personal compensation. In 2005, they were sentenced to prison [JURIST report] for 8 to 25 years. Tyco settled SEC charges [JURIST report] of fraudulent accounting in April 2006 for $50 million. AP has more.

 

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