Tyco settles with jailed ex-exec on NY trial eve
In this March 8, 2004 photo, L. Dennis Kozlowski, former Tyco Chief Executive Officer, leaves court in New York during the lunch break. THE CANADIAN PRESS/AP, Masahiko Yamamoto
NEW YORK, N.Y. - Tyco and its disgraced former chief executive on Friday settled a lawsuit seeking to force him to surrender compensation and benefits he received before he was jailed.
The tentative deal was reached Friday between Tyco International Ltd. and Dennis Kozlowski, 61. A trial scheduled for Monday was cancelled.
In a 2002 lawsuit, Tyco accused Kozlowski of fraud and a breach of fiduciary duty. A federal judge in 2010 found the former executive liable on most claims. Terms of the deal were not announced.
Yolanda Cartusciello, a spokeswoman for Kozlowski's lawyers, declined to comment. Tyco issued a statement confirming the tentative settlement, but declined to comment further.
The trial would have determined what, if any, damages were owed to Tyco. Kozlowski was convicted in 2005 and is serving a sentence of 8 1/3 to 25 years. He has already paid $97 million in restitution to Tyco and a $70 million fine.
The company's civil case was strengthened by a December 2010 ruling in which U.S. District Judge Thomas Griesa said he agreed with Tyco on the general proposition that Kozlowski must forfeit compensation he received during his period of disloyalty.
Jurors at Kozlowski's criminal trial heard evidence about his $6,000 gold-threaded shower curtain and a $2 million birthday party he threw for his wife on the Mediterranean island of Sardinia.
Kozlowski and his co-defendant, Tyco's chief financial officer Mark Swartz, were accused at their criminal trial of giving themselves as much as $150 million in illegal bonuses and forgiving millions of dollars in loans to themselves while manipulating the security systems company's stock price by lying about the state of its finances. The executives said that the payments had, in fact, been authorized, and that the company had flourished under their leadership. Swartz received the same sentence at trial as Kozlowski.
The men were convicted on charges of first-degree grand larceny and other charges related to accusations they stole $180 million outright and improperly made some $430 million by manipulating Tyco's stock value.
Kozlowski told the state Parole Board in a transcript released earlier this year that his "sense of entitlement allowed me to rationalize what I did."
According to the transcript, he said: "I stole money from Tyco, and I stole a lot of money, and ... I'm very sorry I did that."
He added: "Back when I was running Tyco, I was living in a CEO-type bubble. ... I had a strong sense of entitlement at that time, and I had a sense of greed."
Associated Press Writer Jennifer Peltz contributed to this report.
Get forecast by town or city
Possible matches are listed below. Please select a location from the list below or enter a new location in the text box above.