GO
Loading...

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

  • CNBC NEWSLETTERS

    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

  • In a rare menu test, Chipotle is testing a Chorizo Burrito, a spicy sausage made with chicken and pork, in its Kansas City restaurants.

    In a relatively a rare move for Chipotle Mexican Grill, Chipotle began testing a new menu item Tuesday.

  • A prototype of a Diebold bank branch of the future.

    Big banks are spending on futuristic branches, but it's all a waste of time and money, say financial technology experts.

  • Nouriel Roubini

    Nouriel Roubini explains how and why more economic liquidity may have led to "severe market illiquidity."

U.S. Video