After years of legal wrangling, Tyco will pay a record $2.975 billion to shareholders who say the company used faulty accounting practices to defraud them. The settlement by Tyco, which became a poster child for executive excess in the wake of the Enron scandal, represents the largest amount ever offered by a single firm in a corporate-fraud case.
The company had maintained that it was as much as victim of former CEO Dennis Kozlowski as shareholders were. But today's settlement, which ends a federal class-action suit, suggests that the company is willing to pay a high price to move past its legal troubles. Plaintiffs' lawyers interpreted the move more aggressively. Said one lead attorney: "We beat them up.”