Mistrial Bid By Kozlowski Legal Team Thwarted

by Glen Shapiro, LawAndTax-News.com, New York

04 March 2004

Attorneys representing former Tyco chairman, Dennis Kozlowski called for a mistrial in the corruption and grand larceny trial of Mr Kozlowski and the company's former chief financial officer, Mark Swartz earlier this week.

Although the defense had rested its case, the prosecution team called David Boies, who conducted an internal investigation for Tyco in 2002, to rebut testimony given by Mr Swartz to the effect that a $12.5 million payment received by the former CFO was intended as a bonus. Mr Kozlowski received $25 million under the auspices of the same program.

According to Mr Boies, Mr Swartz was informed that the forgiving of the loan which he had previously taken through a company program was potentially a "serious problem". Boies also reportedly expressed concern that the payment had not been reported to the Internal Revenue Service or the Securities and Exchange Committee.

Following the revelations, Mr Kozlowski's legal team moved for a mistrial, arguing that the remarks made by Mr Boies concerning the payments made to their client and Mr Swartz were extremely prejudicial, and beyond the scope of what he had been expected to address.

However, the motion was denied by Manhattan Supreme Court Justice, Michael Obus who argued that Boies was testifying with regard to conversations held with Swartz. However, he reminded the jury that the observations made by Mr Boies did not constitute evidence in the case.

Taking the stand again to refute the claims, the former Tyco CFO suggested that Boies had expressed concern about the credit, but only because it had not been reported to the IRS.

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