A federal judge last week approved the $42.5 million settlement of a class-action securities lawsuit brought against Baxter (NYSE:BAX) over the recall of its Colleague infusion pump and a too-rosy assessment of its plasma business.
The lead plaintiff in the case, the National Elevator Industry Pension Fund, alleged in September 2010 that Deerfield Park, Ill.-based Baxter misled investors about problems with the Colleague pump, which the FDA eventually ordered Baxter to recall and destroy.
The lawsuit also alleged that Baxter concealed problems with its plasma business using inflated margins and the collapse of a merger between Talecris and CSL Limited, which artificially stimulated demand for Baxter’s plasma products.
The settlement, approved Jan. 22 by Judge John Tharp Jr. of the U.S. District Court for Northern Illinois, also calls for Baxter to cover legal fees amounting to 26% of the settlement, or nearly $11.1 million, plus more than $1.1 million in legal expenses.
