As summarized by the Company’s FORM 10-K for the fiscal year ended September 30, 2005, as previously reported in our periodic filings, an action was filed on January 20, 2004 in the United States District Court for the Southern District of New York, Ballard v. Tyco International Ltd., et al. Plaintiffs are former AMP shareholders who received Tyco stock in connection with Tyco's merger with AMP. Plaintiffs name as defendants Tyco International Ltd., PricewaterhouseCoopers LLP, former officers L. Dennis Kozlowski, Mark Swartz, Mark Belnick and former directors Frank Walsh and Michael Ashcroft. The complaint asserts causes of action under Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934, Sections 11 and 12 (a)(2) of the Securities Act of 1933, common law fraud and negligent misrepresentation. The complaint seeks an award of compensatory and exemplary damages. On March 15, 2004, the Judicial Panel on Multidistrict Litigation transferred Ballard to the United States District Court for the District of New Hampshire. On June 10, 2004, the Court entered an order consolidating Ballard with the Securities Action. On July 12, 2004, the Company moved to dismiss the complaint. On July 19, 2004, plaintiffs moved for reconsideration of the consolidation order. On April 22, 2005, the Court granted PricewaterhouseCoopers LLP's motion to dismiss. On July 11, 2005, the Court denied the Company's motion to dismiss. On July 12, 2005, the Court granted plaintiffs' motion for reconsideration. On August 5, 2005, the Company answered the plaintiffs' complaint.
According to a press release dated June 13, 2007, a judge has refused to dismiss lawsuits by three smaller groups of former Tyco International Ltd. shareholders, a month after the company agreed to settle most shareholder claims arising from mismanagement and looting by former top executives. On May 15, Tyco agreed to set up a $2.975 billion cash fund to settle most of the shareholder claims arising from actions by ex-Chief Executive L. Dennis Kozlowski and other top officers convicted of looting Tyco and inflating its value. Still alive are lawsuits by the state of New Jersey, former shareholders of AMP Inc. and former shareholders of a one-time Tyco subsidiary, TyCom Inc. U.S. District Judge Paul Barbadoro on Tuesday dismissed some counts and defendants, but kept alive most of their claims against Tyco, its former executives and directors and the company's former auditor, PricewaterhouseCoopers LLP. … Another lawsuit involves former shareholders in AMP Inc. who received Tyco stock in exchange for their AMP shares when the two companies merged in April 1999. Barbadoro dismissed some claims against former Tyco board member Michael A. Ashcroft on Tuesday. All the lawsuits, including the massive shareholder lawsuit settled last month, were consolidated in the U.S. District Court for New Hampshire. All allege that Tyco executives colluded in a giant accounting fraud scheme to misrepresent the value of Tyco and companies it acquired under Kozlowski's leadership. Losses were estimated at $1 billion to $2 billion. PricewaterhouseCoopers, which did not participate in last month's settlement, is still a defendant in most of the lawsuits.
According to a press release dated August 8, 2008, Tyco International Ltd. entered into an Agreement in Principle with the trustee of various trusts that brought claims against the Company alleging, among other things, securities fraud in connection with the Company's 1999 acquisition of AMP, Inc., the company said in it's Aug. 5 Form 10-Q filing with the U.S. Securities and Exchange Commission. A definitive Settlement Agreement and Release was executed on June 10, 2008. The Settlement Agreement sets forth the terms pursuant to which the parties will settle all claims between them that are raised or could have been raised in the previously disclosed litigation entitled "Ballard v. Tyco International Ltd." The Settlement Agreement calls for the Company to make a payment of $36 million to the plaintiffs, which payment is subject to the sharing formula contained in the Separation and Distribution Agreement. Pursuant to the sharing formula, the Company's portion of the settlement amount was approximately $10 million, with Tyco Electronics and Covidien responsible for approximately $11 million and $15 million, respectively. The Company recorded receivables from each of Covidien and Tyco Electronics for their respective shares of the settlement amount in the third quarter of 2008. This resulted in a net charge to selling, general and administrative expenses for Tyco's share of the settlement of approximately $10 million. The parties have submitted an agreed upon order of dismissal with the Court.
According to an Order filed on November 17, 2008, the court recommends that the Judicial Panel on Multidistrict Litigation remand Rosemary Stumpf and Newby v. Neil R. Garvey, et al., 03-cv-1352-B, Ballard v. Tyco International, Ltd., et al., 04-cv-1336-B, Hall v. Tyco, et al., 05-cv-1336-B, and Jasin v. Tyco, et al., 05-cv-1337-B to the courts in which they were originally filed. On December 15, 2008, the Court entered the Conditional Remand Order and the case was remanded from the District Court of New Hampshire back to the District Court for the Southern District of New York.
On August 5, 2009, plaintiff’s claims against one of the individual defendants was dismissed with prejudice.