ADT 2007 Annual Report Download - page 123

violation of, aiding and abetting violation of, and vicarious liability under the New Jersey RICO statute;
against Tyco and certain of the individual defendants under Section 14(a) of the Securities Act of 1933
and Rule 14a-9 promulgated thereunder, and for conspiracy to violate the New Jersey RICO statute;
against Tyco, its former auditors, and certain of the individual defendants under Section 11 of the
Securities Act of 1933, and for violation of, and conspiracy to violate the New Jersey RICO statute;
and against our former auditors and certain of the individual defendants for aiding and abetting
violation of the New Jersey RICO statute. Finally, claims are asserted against the individual defendants
and our former auditors for aiding and abetting the individual defendants’ breaches of fiduciary duties.
Plaintiffs assert that the defendants violated the securities laws and otherwise engaged in fraudulent
acts by making materially false and misleading statements and omissions concerning, among other
things, the following: unauthorized and improper compensation of certain of our former executives;
their improper use of our funds for personal benefit and their improper self-dealing in real estate. The
plaintiffs seek unspecified monetary damages and other relief. On June 10, 2005, Tyco moved to dismiss
in part the amended complaint. On June 11, 2007, the court granted in part and denied in part Tyco’s
motion to dismiss. Many of the above plaintiffs’ claims remain pending. On July 24, 2007, the plaintiffs
moved for leave to amend their complaint again. Tyco responded in opposition to the motion on
August 10, 2007, and the court has not yet ruled on the plaintiffs’ motion.
As previously reported in our periodic filings, the Company appealed to the United States Court
of Appeals for the First Circuit the decision of the United States District Court for the District of New
Hampshire to remand Brazen v. Tyco International Ltd., et al. to the Circuit Court for Cook County,
Illinois and Hromyak v. Tyco International Ltd., et al., Goldfarb v. Tyco International Ltd., et al., Mandel v.
Tyco International Ltd., et al., Myers v. Tyco International Ltd., et al., Rappold v. Tyco International Ltd., et
al., and Schuldt v. Tyco International Ltd., et al. to the Circuit Court for Palm Beach County, Florida.
Plaintiffs moved to dismiss the Company’s appeal. On December 29, 2004, the United States Court of
Appeals for the First Circuit granted plaintiffs’ motion and dismissed the Company’s appeal. The
Company moved in the Circuit Court for Palm Beach County, Florida to stay and to strike the class
allegations in Goldfarb, Mandel, Myers, Rappold, and Schuldt. The Circuit Court granted Tyco’s motion
to dismiss Hromyak. The Florida District Court of Appeal affirmed the dismissal. These cases were
included in the proposed settlement of the Securities Class Action, which is contingent upon these
cases being dismissed.
As previously reported in our periodic filings, after filing an initial complaint on June 26, 2002,
plaintiff Lionel I. Brazen filed an amended class action complaint, on March 10, 2005, in the Circuit
Court for Cook County, Illinois purporting to represent a class of purchasers who exchanged shares of
Mallinckrodt, Inc. common stock for shares of Tyco common stock pursuant to the Joint Proxy
Statement and Prospectus, and the Registration Statement in which it was included, in connection with
the October 17, 2000 merger of Tyco and Mallinckrodt, Inc. Plaintiff names as defendants Tyco
International Ltd., and certain former Tyco executives and asserts causes of action under Section 11,
12(a)(2) and 15 of the Securities Act of 1933. The amended class action complaint alleges that the
defendants made statements in the Registration Statement and the Joint Proxy Statement and
Prospectus that were materially false and misleading and failed to disclose material adverse facts
regarding the business and operations of Tyco. The amended class action complaint seeks unspecified
monetary damages and other relief. On April 21, 2005, the Company moved in the Circuit Court for
Cook County, Illinois to dismiss or stay or, in the alternative, to strike the class allegations. On July 22,
2005, the Court denied the Company’s motion. On August 19, 2005, Tyco filed an interlocutory appeal
of the Circuit Court for Cook County Illinois’ July 22, 2005 memorandum and order, which was
subsequently denied. On January 6, 2006, the plaintiff, joined by an additional named plaintiff Nancy
Hammerslough, 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. On January 25, 2007, the Court denied
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