Convicted former CFO seeks $60 million from Tyco
NEW YORK (Reuters) - Former Tyco International (TYC.N) Chief Financial Officer Mark Swartz, who is serving a prison sentence for looting the company, has sued for $60 million in retirement and other money he says he is owed.
The lawsuit, which was made public on Monday, accuses Tyco of breach of contract and unjust enrichment for not paying him some $48 million from an executive retirement agreement, $9 million in reimbursement for New York taxes, and other money.
"We know of no basis on which Swartz could recover from the company," Tyco spokesman Paul Fitzhenry said in an email, although the company had not yet been served with the complaint.
Swartz was convicted of grand larceny and securities fraud in 2005, along with former Chief Executive Dennis Kozlowski. They are each serving sentences of 8-1/3 to 25 years.
In his lawsuit, filed in New York state Supreme Court, Swartz charges the company knew the Manhattan District Attorney intended to bring criminal charges against him when it approved the main contract at issue in the lawsuit.
"The directors and management of Tyco approved the subject agreement with actual knowledge that he was shortly to be indicted," the lawsuit said.
Tyco has a separate suit against Swartz pending in U.S. District Court in the Southern District of New York. That case, to fix the amount Swartz must pay Tyco, is scheduled for trial in September, Fitzhenry said.
Tyco also brought a similar suit in federal court against Kozlowski. In that case, the judge dismissed Kozlowski's counterclaims for pay and benefits after 1995. The remaining issues are scheduled for trial in August, Fitzhenry said.
Swartz was chief financial officer of the industrial conglomerate from 1995 through 2002. He was indicted in September 2002 and convicted in June 2005. Besides the prison sentence, he paid $72 million in court-ordered restitution and fines.
Since September, Swartz has been assigned to Lincoln Correctional Facility in New York city, a minimum-security facility where Kozlowski also is based, according to the state Department of Corrections.
Swartz is on a furlough schedule where he can leave on Wednesdays and return on Monday. He is scheduled to appear before the Parole Board in September 2013.
Kozlowski, whose purchase of a $6,000 shower curtain made him a symbol of corporate greed, was denied parole in April.
At the parole board hearing last month, Kozlowski admitted he had developed "a wrongful sense of entitlement and greed" that led him to steal from Tyco, according to a transcript.
Tyco is a Switzerland-based holding company that includes diversified manufacturing and service units, including making security systems.
The case is Mark H. Swartz v. Tyco International Ltd., 651533/2012, New York state Supreme Court (New York County).