ADT 2006 Annual Report Download - page 87

Ashcroft, Joshua M. Berman, Richard S. Bodman, John F. Fort, III, Stephen W. Foss, James S. Pasman
Jr., W. Peter Slusser and Frank E. Walsh, Jr. On August 2, 2005, Tyco filed a motion for a finding
pursuant to Supreme Court Rule 308(a), which was denied on August 16, 2005. On August 19, 2005,
Tyco filed an interlocutory appeal of the Circuit Court for Cook County Illinois’ July 22, 2005
memorandum and order. On December 27, 2005, the Appellate Court of Illinois, First Judicial District,
denied Tyco’s interlocutory appeal. On January 31, 2006, the Company filed a petition for leave to
appeal the decision of the appellate court, but that petition was denied. On January 6, 2006, the
plaintiff filed a renewed motion for class certification which was granted. On February 14, 2006, Tyco
filed its answer to the complaint. On July 5, 2006, plaintiffs filed a partial motion for summary
judgment which was denied on November 8, 2006. On November 22, 2006, plaintiffs filed a motion to
reconsider the denial of their motion for summary judgment. Briefing is ongoing.
As previously reported in our periodic filings, on April 29, 2005, an action was filed against Tyco in
the United States District Court for the Southern District of Florida, Stevenson v. Tyco
International Ltd., et. al. Plaintiff names as additional defendants our current Chief Executive Officer,
Edward Breen, our former Chief Financial Officer, David FitzPatrick, our current Executive Vice
President and General Counsel, William Lytton, current members of Tyco’s Board of Directors
including Dennis Blair, Bruce Gordon, John Krol, Carl McCall, Mackey McDonald, Brendan O’Neill,
Sandra Wijnberg, and Jerome York, as well as former members of Tyco’s Board of Directors, including
Michael Ashcroft, Joshua Berman, Richard Bodman, John Fort, Steven Foss, Wendy Lane, James
Pasman, Peter Slusser and Joseph Welch. The complaint asserts causes of action under Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The
complaint alleges that defendants made material misrepresentations that resulted in artificially deflated
stock prices. The Judicial Panel on Multidistrict Litigation has transferred this action to the United
States District Court for the District of New Hampshire.
On January 31, 2003 a civil action was filed in the United States District Court for the District of
New Jersey, Cirella v. Tyco International et al. Plaintiff names as defendants Tyco International Ltd.,
Dennis Kozlowski, Mark H. Swartz and Mark A. Belnick. Plaintiff Philip M. Cirella alleges that he was
a shareholder in CIT who received common shares of Tyco when it acquired CIT in 2000, and later
purchased additional Tyco shares with Marguerite Cirella. Plaintiffs assert a cause of action against all
defendants for violation of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and a
cause of action against the individual defendants for violation of Section 20(a) of the Exchange Act.
The complaint alleges that the defendants failed to disclose related-party transactions, including the
following: providing interest free loans, forgiving personal loans, purchasing personal properties, using
company funds to purchase personal items, selling individual Tyco shares while concealing information
from investors, and failing to disclose an ongoing criminal investigation of Kozlowski, all of which
resulted in an artificially inflated share price. Plaintiffs seek compensatory damages and costs against all
defendants and punitive exemplary damages against the individual defendants. The Judicial Panel on
Multidistrict Litigation has transferred the action to the United States District Court for the District of
New Hampshire.
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
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