February 10, 2009

Back At The Start

The parties in the Baxter International securities litigation deserve credit for perseverance. First, there was a dismissal based on the PSLRA's safe harbor for forward-looking statements. Then came a Seventh Circuit decision overturning the dismissal and controversially limiting the application of the safe harbor. That was followed by a denial of class certification, another Seventh Circuit decision upholding the denial, and then the continuation of the case on a non-class basis.

Seven years later, the case is back were it started -- and perhaps, with the benefit of hindsight, never should have left. In Asher v. Baxter Int'l, Inc., 2009 WL 260979 (N.D. Ill. Feb. 4, 2009), the court granted summary judgment to the defendants on the basis that the plaintiffs "failed to indentify any evidence that Baxter's forward-looking financial projections lacked either good faith or a reasonable basis in fact." One more appeal?

Holding: Defendants' motion for summary judgment granted.

Quote of note: "Although the court has gone into great detail analyzing why this evidence fails to meet the plaintiffs' burden of production, the analysis boils down to this: the financial reports and other documents and testimony cited simply do not establish that the defendants ignored relevant information when reaffirming and revising Baxter's financial commitments. Moreover, the commitments were in line with previous years' commitments, which Baxter had met for eight straight years. Although the plaintiffs have identified financial challenges that Baxter faced during 2002, the mere existence of financial challenges does not establish that sales growth is unachievable."

Posted by Lyle Roberts at February 10, 2009 10:10 PM | TrackBack
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