Tyco Reaches Damages Settlement Over Breach of Fiduciary Duty
Posted on Jan 01, 2016
A few days before the trial was scheduled to begin, Tyco and its former chief executive officer Dennis Kozlowski settled their lawsuit. The company had sought to force Kozlowski to return compensation and benefits he received prior to being sent to jail for first-degree grand larceny and other charges. The terms of the settlement have not yet been released.
Had the trial gone forth, the parties would have argued over the amount of damages, if any, that were owed to Tyco. The company accused Kozlowski in a 2002 lawsuit of fraud and breach of fiduciary duty. Kozlowski was found liable on most of the company’s claims by a federal judge in 2010.
Kozlowski was sent to jail in 2005 on the grand larceny and related charges. He and co-defendant Mark Swartz were convicted of giving themselves as much as $150 million in illegal bonuses. The two men were also convicted of forgiving millions of dollars in loans to themselves as well as lying about the state of Tyco’s finances. These lies lead to inflated company stock prices.
During Kozlowski’s criminal trial, jurors heard evidence that Kozlowski owned a $6,000 gold-threaded shower curtain. They also heard evidence that he had thrown a $2 million birthday party for his wife on an island in the Mediterranean. Kozlowski is serving a prison sentence of 8 to 25 years. He has also thus far paid $97 million in restitution to Tyco as well as a $70 million fine. Swartz was given the same sentence as Kozlowski.
Contact a New York business litigation lawyer today at (888) 497-3410 for more information about breach of fiduciary duty in New York.