LawFuel – The Law Newswire – Tyco International whose top two officers were imprisoned for fraud, has agreed to pay almost $3 billion to settle class-action suits brought by investors, the company announced today, as reported by the New York Times.
The settlement, described as the largest payment ever by a company in such a suit, seeks to help put to rest one of the nation’s most notorious cases of fraud. Tyco investors might be in a position to recover even more money because they would also share in any proceeds from litigation that is still outstanding against L. Dennis Kozlowski, the former Tyco chief executive, and two other former company officials, and against the company’s former auditor, PricewaterhouseCoopers.
The settlement came as the company is seeking to split into three parts and is involved in separate litigation with bondholders who contend they are not being offered sufficient compensation for the change in corporate structure.
“With this settlement we are taking an important step to resolve our most significant remaining legacy legal matter,” said Ed Breen, Tyco’s chief executive. “Our balance sheet and cash flow remain strong and will allow us to readily absorb these costs while removing much of the uncertainty around legacy legal matters.”