BOSTON (Bloomberg) — Bermuda-based Tyco International Ltd. won initial approval of a $3.2 billion settlement of lawsuits accusing the company of artificially inflating revenue during the tenure of former chief executive officer Dennis Kozlowski.US District Court Judge Paul Barbadoro in Concord, New Hampshire, on Friday preliminarily approved the settlement, which resolves investors' securities-fraud suits alleging Tyco overstated its income by more than $5 billion under Kozlowski's watch. The judge said he wanted more information on how the money would be divided among shareholders before he gave the accord final approval.

"I will be looking quite carefully at the plan of allocation to satisfy myself this plan is sensible," the judge said. "But at the end of the day, my job will have to be one of simple fairness, not mathematical precision." The accord came as officials of Tyco were in the process of dismantling the company built through acquisitions by Kozlowski, who is now in prison for fraud and larceny. Tyco, the world's biggest maker of security systems, spun off two units on June 29.

Tyco officials agreed to pay $2.98 billion to resolve investors' securities-fraud claims. PricewaterhouseCoopers LLC, the company's former outside auditor, agreed to add $225 million to the settlement because of its failure to uncover Tyco's fraudulent earnings reports.

Paul Fitzhenry, a Tyco spokesman, wasn't immediately available for comment on the judge's ruling. David Nestor, a Pricewaterhouse spokesman, declined to comment.

Kozlowski and former chief financial officer Mark Swartz are serving as long as 25 years in New York State prison for stealing more than $150 million through unauthorised bonuses and defrauding Tyco shareholders of millions more.

Investors alleged in their suits that the two orchestrated a scheme to manipulate the company's earnings and defraud shareholders. Kozlowski was forced to step down in 2002. Tyco agreed in April 2006 to pay $50 million to settle US Securities and Exchange Commission claims over the flawed accounting.

The shareholders sued after the company lost more than $100 billion in market value in the year before new chief executive officer Ed Breen was hired in July 2002.