Class Action Settlements: Tyco International
Tyco International is a highly diversified global manufacturing company that was founded as an investment and holding company in 1960 and incorporated two years later as Tyco Laboratories. Tyco mainly concentrates on high-tech materials, science and energy conversion products. After 1960 and over the following decades, Tyco acquired a variety of companies until 2007 when it separated into three independent companies known as Tyco Healthcare, Tyco Electronics and Tyco International.
In 1992 Dennis Kozlowski became CEO of Tyco International and maintained an aggressive acquisition stance until he was replaced in 2002 after a series of failed transactions and extensive losses in the billions of dollars, despite its 2002 revenue reports of $35 billion.
CEO Kozlowski and his senior management team were accused of massive corporate excesses and became defendants in two federal suits filed by Tyco and later by the state of New Jersey for violating its Racketeer Influenced and Corrupt Organizations Act (RICO) in November 2002. He was also indicted for evading New York state income taxes.
In 2002 and 2003, Tyco was named in more than two dozen securities class action law suits most of which were consolidated and transferred to a federal court in New Hampshire.
Dennis Kozlowski was later convicted in June 2005 of looting $600 million dollars from Tyco and was sentenced to up to 25 years.
On May 15, 2007, Tyco settled 32 of the class action suits for $2.975 billion, making it one of the largest class action settlements by a single company--behind Enron, WorldCom and Cendant Corp.
Other class action suits against Tyco include a $79 million settlement reached in April 2010 on behalf of investors over claims that Tyco International misled them about an undersea cable venture, and a Tyco employees class action that settled for $72.5 million in December 2009. The latter suit was on behalf of 50,000 former and current Tyco employees who could be expected to receive an average settlement of about $1,000 apiece. It is one of the largest ERISA litigation settlements in American history.
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