Ex-Tyco CEO Kozlowski Isn't Eligible for Millions in Benefits, Judge Rules
Ex-Tyco International Ltd. Chief Executive Officer L. Dennis Kozlowski, imprisoned for stealing from the company, can’t collect tens of millions of dollars in benefits he claims Tyco owes him, a judge said.
U.S. District Judge Thomas P. Griesa in New York ruled yesterday that Kozlowski’s 2005 state-court conviction on 22 criminal counts shows that he was disloyal to Tyco and isn’t entitled to any pay he claims he earned from September 1995 to June 2002, when he was forced out.
“Kozlowski’s multiple breaches of his fiduciary duty over several years clearly demonstrate his faithless service,” Griesa wrote. “Kozlowski must therefore forfeit all compensation and benefits, deferred or otherwise, earned during his period of disloyalty.”
The ruling comes in a suit Tyco filed against Kozlowski in 2002. Griesa ruled in favor of several Tyco claims before trial, while dismissing all of Kozlowski’s counterclaims for pay and benefits after 1995.
As of October 2008, the value of Kozlowski’s retirement account was $75.9 million, according to the court papers in the suit.
Tyco, based in Schaffhausen, Switzerland, is the world’s biggest maker of security systems.
Kozlowski and former Chief Financial Officer Mark Swartz were convicted in 2005 of securities fraud, grand larceny and falsifying business records. A jury in New York State Supreme Court found they stole about $137 million from Tyco through unauthorized bonuses and the abuse of company loans.
Kozlowski was sentenced to a prison term of eight years and four months to 25 years.
The case is Tyco v. Kozlowski, 02-cv-07317, U.S. District Court, Southern District of New York (Manhattan).
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