Securities Litigation: H&R Block

In re H&R Block Securities Litigation
USDC WD Missouri
Disclosure; Restatement

Background

Company background

Litigation background

In re HR Block Securities Litigation
USDC WD Missouri (Kansas City) 4:06-cv-00236-ODS
District Judge Ortrie D. Smith
Filed 3.17.06

Lead plaintiffs

Horizon Asset Management

SEC disclosure

Form 10-Q 9.03.08 At page 31
Securities Litigation. On April 6, 2007, a putative class action styled In re H&R Block Securities Litigation was filed against the Company and certain of its officers in the United States District Court for the Western District of Missouri. The complaint alleged, among other things, deceptive, material and misleading financial statements, failure to prepare financial statements in accordance with generally accepted accounting principles and concealment of the potential for lawsuits stemming from the allegedly fraudulent nature of the Companys operations. The complaint sought unspecified damages and equitable relief. On October 5, 2007, the court dismissed the complaint and granted the plaintiffs leave to re-file the portion of the complaint pertaining to the Companys financial statements. On November 19, 2007, the plaintiffs re-filed the complaint, alleging, among other things, deceptive, material and misleading financial statements and failure to prepare financial statements in accordance with generally accepted accounting principles. The court dismissed the re-filed complaint on February 19, 2008. On March 11, 2008, the plaintiffs appealed the dismissal. In addition, plaintiffs in a shareholder derivative action that was consolidated into the securities litigation filed a separate appeal on March 18, 2008, contending that the derivative action was improperly consolidated. The derivative action is Iron Workers Local 16 Pension Fund v. H&R Block, et al., in the United States District Court for the Western District of Missouri, Case No. 06-cv-00466-ODS (instituted on June 8, 2006) and was brought against certain of our directors and officers purportedly on behalf of the Company. The derivative action alleges breach of fiduciary duty, abuse of control, gross mismanagement, waste, and unjust enrichment pertaining to (1) our restatement of financial results in fiscal year 2006 due to errors in determining our state effective income tax rate and (2) certain of our products and business activities. We believe the claims in these cases are without merit and intend to defend this litigation vigorously.

Financial Restatement Announcement

Over taxes; Weaknesses in internal control

Form 8-K 2.23.06

Press release
Primarily to adjustments relating to the expensing of certain student housing property-related expenditures previously capitalized and the timing of recognition of revenues and expenses previously reported

Motion to Dismiss Granted

Complaint