Ex-Astra exec must repay $6.7M; State's top court rules against Bildman.

Byline: John J. Monahan

BOSTON - The state Supreme Judicial Court ruled yesterday that former Astra USA CEO and president Lars E. Bildman must repay the company $6.7 million in salary and bonuses.

The ruling overturns a lower court decision to reject the company's request to have the executive return $5.6 million in pay and $1.1 million in bonuses received between 1991 and 1996 because he was engaged in fraud and improper sexual harassment activities.

Mr. Bildman was at the center of a long-running fraud and sexual harassment investigation at Astra's Westboro headquarters in the 1990s.

The court also affirmed an earlier court ruling awarding Mr. Bildman $203,691 in damages related to a supplemental stock grant from the company.

The decisions by the state's highest court come 13 years after the company and its executive were thrust into national headlines with disclosures of numerous cases of sexual harassment, exorbitant spending on rented yachts and parties, and numerous federal charges of criminal fraud.

Those charges led to civil lawsuits against Mr. Bildman and Astra, a $9.8 million settlement with the Equal Employment Opportunity Commission to compensate sexual harassment victims of the company, and a 35-count criminal indictment of Mr. Bildman and others.

A seven-week criminal trial was cut short in 1998 when Mr. Bildman struck a deal with federal prosecutors, admitting he failed to report more than $1 million in income. He served a 21-month prison sentence and was released in November 1999.

In 2002, after a 32-day civil trial, a Suffolk County jury ruled against Mr. Bildman on numerous counts, finding that he defrauded the company, wasted assets, breached his fiduciary responsibilities, converted funds for private use and engaged in sexual harassment during his 15-year tenure with the company.

Astra USA, part of the London-based AstraZeneca Plc, had sought $15 million in damages, claiming he sexually harassed female employees, spent company money on prostitutes and home renovations, and concealed company documents.

The jury found that Mr. Bildman engaged in sexual harassment of Astra employees and that he retaliated against Astra employees who had exercised their rights to make complaints under Astra's sexual harassment policy. He was ordered to pay $1,040,812.

The judge rejected Astra's claim that he should be required to pay back salary and bonuses for failing to be an honest employee during the final five years with the company, a claim the company won on appeal.

The SJC cited the longstanding practice of Massachusetts courts to apply law from the state of a company's incorporation to its internal corporate affairs, in this case New York.

The SJC concluded that New York's "faithless servant" doctrine "requires that Bildman forfeit all of his salary and bonuses from Astra for the period of disloyalty" and that the lower court judge was without authority to rule otherwise.

ART: PHOTO

PHOTOG: T&G File Photo/RICK CINCLAIR

CUTLINE: Lars Bildman in 2002