Tyco International Ltd. (NYSE: TYC), a diversified manufacturing conglomerate, will have to pay $250 million to settle lawsuits.
The lawsuits were filed by holders of $3.7 billion of Tyco’s debt that occurred as a result of the company's 2007 split into three companies.
On June 29, 2007, Tyco completed the share distribution separating the company into three wholly independent, publicly traded companies, each with its own board of directors, CEO, management staff, and financial structure.
The three new companies became:
Covidien Ltd., formerly Tyco Healthcare;
Tyco Electronics Ltd;
Tyco International Ltd. (New), formerly Tyco Fire & Security and Tyco Engineered Products & Services (TFS/TEPS).
The holders were afraid of more debt as a result of the split that can lessen the potential payback of the old debtholders. They also feared that the buying-back terms could be changed.
To come down the holders the company offered a deal to buy back $5.6 billion in debt ahead of the breakup.
President Joe Biden will soon regurgitate on the public the words of George W. Bush uttered in 2002