Tyco International Ltd. and former Chief Executive L. Dennis Kozlowski have settled a nearly decade-long dispute over whether he should return more than $500 million in compensation and benefits following his 2005 criminal conviction for looting the company the Wall Street Journal has reported.
The settlement amount couldn’t be immediately determined. Friday’s agreement in principle to settle came just days before a trial was due to start on how much damages should be awarded to the company.
“Because this is a matter of ongoing litigation, we have no additional comments about the case,” said Ira Gottlieb, a Tyco spokesman.
In 2005, Mr. Kozlowski and former Chief Financial Officer Mark H. Swartz were convicted in New York state court of systematically looting the company, which was then incorporated in Bermuda.
In January, Mr. Kozlowski, who was sentenced to between 8 1/3 and 25 years in prison, was approved for a work-release program that allows him to live in a minimum-security facility and hold a job. He was denied parole in April.
Tyco relocated its corporate headquarters to Bermuda from the US in 1997 although the company’s main business interests continued to be run out of Exeter, New Hampshire and New York.
Former CEO Mr. Kozlowski — jailed for eight years in 2005 for defrauding the company of tens of millions of dollars — became notorious for his extravagant lifestyle supported by the booming stock market of the late 1990s and early 2000s.
Allegedly, Mr. Kozlowski — who spent considerable time in Bermuda when the firm was headquartered here — had Tyco pay for his $30 million New York City apartment which included $6,000 shower curtains and $15,000 “dog umbrella stands.”
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