Executives Who Stole from Company Sue Tyco for Breach of Contract
Posted on Jan 01, 2016
Former executives at Tyco International, Ltd., are suing the company for severance benefits that they allege were promised to them. The irony of the situation is that some of these same executives are currently in prison or have been convicted of looting the company for millions of dollars. One such executive, Mark Swartz, filed suit on May 4 against Tyco for breach of contract and unjust enrichment.
In his lawsuit, Mr. Swartz alleges the following:
- That the company owes him at least $48 million from an executive retirement agreement.
- That the company owes him $9 million in reimbursement for taxes.
- That the Board of Directors knew at the time it agreed to a severance package that Mr. Swartz would soon be indicted for stealing from the company.
- That both parties to the severance agreement had full knowledge and neither party was misled.
- That Mr. Swartz has made all of his court ordered restitution to Tyco for the amounts the court determined that he improperly received.
After the time that the severance agreement was entered into, several Board members were replaced in connection with the larceny and securities fraud scandal. Since that time, the new Board has refused to honor the agreement.
Mr. Swartz was the former Chief Finance Officer of Tyco. He was convicted in June 2005 of grand larceny and securities fraud. Also convicted was former Chief Executive Officer Dennis Kozlowski. Both men are currently serving prison sentences for 8 to 25 years. They were accused of stealing approximately $150 million from Tyco. The New York Parole Board recently denied Mr. Kozlowski his bid for an early parole.
Mr. Kozlowski filed a similar breach of contract lawsuit regarding severance payments; however, he lost in his action.
For more information about this case or any question about New York contract law, call a New York breach of contract lawyer at (888) 497-3410.