Tyco Slapped for Franchise Costs of "The Club" Auto Anti-Theft Device

Company owes inventor $32.6 million following years of non-payment for franchise


PHILADELPHIA (AP) - Tyco International Inc. owes a western Pennsylvania businessman more than $32 million in franchise fees from the company's Sensormatic subsidiary, a federal appeals court has ruled.

James Winner Jr., of Sharon, inventor of The Club auto anti-theft device sold by Winner International, bought the Sensormatic franchise rights for Pennsylvania and Delaware in 1967. Sensormatic makes theft detection systems used by retailers.

Winner's lawyer, Joseph Katarincic, said his client agreed to lease the franchise back to the company for 20 years. Sensormatic, which has since become a Tyco subsidiary, had the option after that period to buy it back.

The company missed the deadline to buy back the franchise, but stopped paying the lease fee to Winner anyway, Katarincic said.

Earlier this week, the 3rd U.S. Circuit Court of Appeals agreed that Winner was owed $32.6 million in franchise fees and interest for December 1998 to March 2004, and that he continues to own the franchise.

"We're evaluating all further legal options," Tyco spokesman David Polk said.