Enter multiple symbols separated by commas

Tyco To Settle Class-Action Suits for Nearly $3 Billion

Diversified manufacturer Tyco International said on Tuesday it agreed to take a $2.975 billion charge to settle most class-action lawsuits involving the stock and the former management, including former Chief Executive Dennis Kozlowski.

The company, which plans to split into three companies in coming weeks, said it will establish in the near term a settlement fund for payment of plaintiffs' claims in the consolidated class-action cases. The settlement must still receive court approval.

"We are taking an important step to resolve our most significant remaining legacy legal matter," Tyco Chief Executive Ed Breen said in a statement.

"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," he added.

The settlement deals with a complaint filed in early 2003 on behalf of Tyco shareholders from December 1999 to June 2002.

The company, which plans to spin off its health care and electronics divisions into independent publicly traded companies by the end of June, will take the charge in the current quarter.

Tyco, incorporated in Bermuda but with headquarters in New Jersey, announced its break-up plan -- which will cost up to $1.6 billion -- in January 2006. Its previous CEO, Kozlowski, who is serving a prison sentence for looting the company, also floated a break-up plan shortly before Tyco became mired in scandal.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • The Jaguari Jacarei river dam, part of the Cantareira System of dams, is shown in Joanopolis, Brazil.

    São Paulo is experiencing a water crisis so bad that experts say it could affect investors internationally.

  • Monopoly board game turns 80.

    Toy maker Hasbro is bringing the Monopoly board game to the silver screen, in a movie about a boy's quest to make his fortune and avoid jail time.

  • Golfer Phil Mickelson is the "unnamed gambling client" mentioned in a plea agreement taken by another man charged in a money laundering case, sources said.

U.S. Video

  • Higher rates hit home

    As the average rate on the 30-year fixed rose to 4.26 percent, mortgage application volume fell week over week, reports CNBC's Diana Olick.

  • What is PREPA?

    CNBC's Kate Kelly reports on Puerto Rico's debt crisis.

  • Fiat-Chrysler beats Ford in retail sales

    CNBC's Phil LeBeau reports Fiat-Chrysler had a big June outselling Ford on a retail basis for the first time ever.