A state court judge allowed Tyco International Ltd.’s former chief executive, L. Dennis Kozlowkski, and its former chief financial officer, Mark H. Swartz, to post hefty bail packages secured by either cash or Tyco stock.
Judge Michael J. Obus said prosecutors, who have raised concerns that the bonds are being secured by possible proceeds of crime, can still dispute the bail packages at a hearing Sept. 27.
The former executives were charged last week with stealing more than $170 million from the company. They were released but ordered to post steep bonds for Mr. Kozlwoski, $100 million, and for Mr. Swartz, $50 million by Thursday’s hearing.
Mr. Kozlowski’s lawyer, Stephen Kaufman, told Judge Obus at a the hearing that his client’s bond is to be secured by $10 million in cash from his ex-wife, Angela. She is “supportive” of Mr. Kozlowski, who has remarried since their July 2000 divorce, Mr. Kaufman said.
Mr. Swartz’s lawyer, Jim Mitchell, said his client would back his bond with 500,000 shares of Tyco that are now worth $6.7 million.
Prosecutor John Moscow told the judge that “if in fact bond is posted, we will seek to ascertain … the source of the funds. There are a number of questions.”
Judge Obus ordered Messrs. Kozlowski and Swartz to post their bonds by the end of the business day on Friday.
The former executives declined to comment to reporters as they left the hearing.
A third executive, Mark A. Belnick, the company’s former general counsel, was separately charged last week with falsifying business records. He was required to post a $1 million bond.
At Thursday’s hearing, his attorney, Reid Weingarten, asked that a trial date be set for early next year. “It’s a simple indictment,” he said. “It’s much, much smaller than the other charges in the Tyco investigation.”
Jude Obus provided a brief moment of levity at the hearing, saying, “if all my cases were as simple as this, I would be in big trouble.”
The judge declined to set a trial date after Mr. Moscow, the prosecutor, noted that “the grand jury is still sitting,” and more charges and defendants could be added to Mr. Belnick’s case.
The judge also declined to set a trial date for Messrs. Kozlowski and Swartz, but said a spring trial might be possible.
At a hearing earlier this week, attorneys for Messrs. Kozlowski and Swartz complained that their clients were having trouble posting bail, because their personal assets had been frozen, and that prosecutors were rejecting homes, bonds and other assets proffered by family members.
The indictment accuses the former executives of siphoning money for personal uses, such as yachts and mansions.
If convicted, Messrs. Kozlowski and Swartz each face up to 30 years in jail. Mr. Belnick could face up to four years in prison.