Stockholders v Baxter International, Inc.
Baxter International Fails to Report Improperly Recognized $40 Million in Revenues
Several class actions have been filed against global medical products and services company Baxter International, Inc., (NYSE:BAX) and certain of its officers and directors by stockholders who purchased the company's common stock between April 19, 2001, and July 21, 2004. Also included, are all those who acquired Baxter's shares through its acquisitions of Autros, Fusion Medical, ESI Lederle, Acambis, Alpha-1, Cook Pharmaceutical, and Icodextrin, and present and former employees who purchased stock through Baxter's Retirement Savings Plans. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.
The action alleges that the defendants failed to disclose that Baxter's financial results during the applicable period were materially overstated because the company had improperly recognized $40 million in revenues and maintained inadequate and incorrect provisions for bad debts relating to its Brazilian operations. As a result, Baxter's financial results, including its net income figures, were materially and artificially inflated and in violation of Generally Accepted Accounting Principles.
On July 22, 2004, Baxter announced that it planned to restate its financial results for the years 2001 through 2003, and for the first quarter of 2004. The restatement was the result of incorrect revenue recognition and inadequate provisions for bad debts in Brazil, which would result in a
decrease in net income over the restatement period by an amount expected to be no more than $40 million, or $0.07 per diluted share. On this news, Baxter fell $1.48 per share, or 4.59%, to close at $30.79 per share.
If you purchased securities issued by Baxter during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by September 27, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve you in this action, or you may choose to do nothing, and remain in the class as a silent member.
