A U.S. District Court judge in Concord has allowed a shareholder class-action lawsuit against Tyco International Ltd. to continue, but he has struck down a related shareholder derivative suit that sought damages on behalf of Tyco.
Judge Paul Barbadoro’s rulings will affect the massive claims related to alleged corporate looting and fraud by Tyco’s former chief executive officer, L. Dennis Kozlowski, and chief financial officer, Mark Swartz.
Formerly headquartered in New Hampshire, its main U.S. offices are now in West Windsor, N.J.
Kozlowski and Swartz are awaiting retrial on charges that they stole about $600 million in unauthorized compensation and illicit stock sales. They have denied wrongdoing. The conglomerate has admitted overstating income from 1998 to 2001 by $1.15 billion.
The shareholder derivative suit didn’t name Tyco as a defendant, instead seeking damages on behalf of the company from a number of current and former directors and officers. The judge dismissed the claim, saying it was barred under Bermuda law. Tyco is registered in Bermuda.
The separate class action was brought on behalf of shareholders seeking damages against Tyco, Kozlowski and Swartz, other individuals and PricewaterhouseCoopers LLP, Tyco’s outside auditor.