Tyco Execs Sue For Legal Fees
Former Tyco chief executive Dennis Kozlowski and Mark Swartz, the company’s one-time chief financial officer, asked a court to direct Twin City Fire Insurance to pay legal bills that they say have surpassed $US25 million.
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The first trial of Kozlowski, 57, and Swartz, 44, on charges of stealing $US170 million in unauthorized pay and $US430 million in profits from manipulated stock
ended in a mistrial in April. Their second trial is scheduled Jan. 18.
Court papers filed in Manhattan Supreme Court say <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />TwinCity, a unit of Hartford Financial Services Group, is obligated help cover their legal bills.
The pair has already exhausted the first $25 million of coverage provided by Federal Insurance Co. The TwinCity policy provides an additional $25 million in coverage.
The lawsuit says neither Federal, a unit of Chubb Corp., nor TwinCity has acknowledged its obligation to pay the executives’ defense costs. The suit asks the court to direct the insurance companies to pay. Sue Honeyman, a spokeswoman for TwinCity, said she could not comment on pending litigation.
A similar suit was filed last week against TwinCity by Mark A. Belnick, Tyco’s former general counsel, acquitted in July of charges he abused company loan programs and accepted an improper bonus of $17 million from Kozlowski.
And last month, TwinCity sued Belnick, Kozlowski and Swartz, asking a court to declare it is not responsible for their legal bills. Separately, Federal is appealing the March 5 court ruling earlier this year that ordered it to pay Kozlowski’s defense costs. The company contends the coverage is outside the terms of its policy.