Company background

• News-stock chart
• Company website

Litigation background

• Higginbotham v. Baxter Intl Inc, et al
• USDC ND Illinois (Chicago) 1:04-cv-04909
• Honorable William T. Hart
• Filed 7.27.04
• Suit was triggered by Baxter's July 2004 announcement restating three years of earnings because of improper accounting practices at its Brazilian subsidiary
• Plaintiffs claims were based on claims that Baxter committed securities fraud by filing its 10-K report in March 2004 and its first quarter 10-Q in May 2004 without disclosing the need for a restatement

Complaint

• First amended complaint  1.10.05
• Second amended complaint  9.28.05

Restatement is primarily the result of incorrect revenue recognition and inadequate provisions for bad debts in Brazil during that period, which will 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

• Press release  7.22.04
• EDGAR filings

Defendant's motion to dismiss

• Defendant filings

• Motion  2.10.05
• Brief  2.15.05
• Reply brief  3.23.05

• Plaintiffs opposition

• Brief  3.09.05

Plaintiff's motion to alter judgment

• Plaintiff filings

• Motion  6.13.05
• Brief  6.13.05
• Reply brief  7.20.05

• Defendant's opposition

• Brief  7.06.05

Defendant's motion for reconsideration

• Defendant filings

• Motion  10.11.05
• Brief  10.25.05
• Reply brief  11.02.05

• Plaintiffs opposition

• Brief  10.26.05

Opinion

• Opinion  5.25.05  2005 US Dist LEXIS 12006 / 2005 WL 127221

• Dismissed action

• Opinion  9.23.05  2005 US Dist LEXIS 21349 / 2005 WL 2368795

• Reinstated action

• Opinion  12.22.05  2005 US Dist LEXIS 38011 / 2005 WL 354252

• Dismissed action with prejudice
• Notice of appeal  1.26.06

Affirms district court's dismissal

• Opinion  7.27.07  2007 WL 2142298

• Seventh Circuit docket 06-1312

• Held that the allegations failed to raise a strong inference that the defendants knew of, or recklessly disregarded, the accounting errors when Baxter filed its 10-K and 10-Q
• Discounted use of confidential witnesses post-Tellabs

• One upshot of the approach that Tellabs announced is
  that we must discount allegations that the complaint
  attributes to five "confidential witnesses"one ex-employee of the Brazilian subsidiary, two ex-employees of
  Baxters headquarters, and two consultants. It is hard to
  see how information from anonymous sources could be
  deemed "compelling" or how we could take account of
  plausible opposing inferences. Perhaps these confidential
  sources have axes to grind. Perhaps they are lying. Perhaps they dont even exist.
• At page 3

• Commentary

• Wachtell Lipton  7.30.07
• Fried Frank  8.01.07

Lead plaintiff

• Berger & Montague
• Glancy Binkow

Company defense

• Skadden Arps

Scienter: Post-Tellabs

Rule 10b Private Actions