A judge reportedly ruled that former



Chairman Dennis Kozlowski would be allowed to remain free on bail with $10 million put up by his ex-wife, following a hearing on whether the money was gained as part of the fraud with which he was charged.

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Manhattan Supreme Court Judge Michael Obus accepted the bail and set a hearing date for Nov. 7. The judge made the decision after hearing arguments from prosecutors on whether the money from Kozlowski's ex-wife was obtained as part of the alleged fraud, which led prosecutors to freeze his assets. During the hearing, prosecutors questioned whether some $30 million that Kozlowski gave his ex-wife was transferred to her before he knew his assets would be frozen.

Defense attorneys said the funds were from legitimate sources, including the sale of property in New Hampshire and a Tyco employee fund.

Obus said that Tyco's former Chief Financial Officer Mark Swartz, who was also indicted this month on fraud charges, would have to return on Oct. 11 for another bail hearing.