Chicago, ILThere has been a breakthrough in an ERISA plan lawsuit brought against the health and science corporation Baxter, as a district judge has granted the company 404 (c) protection as it pertains to stock dropping.
In a ruling by US District Judge Joan B. Gottschall of the Northern District of Illinois, Baxter was found to be in compliance with its fiduciary duties under the Employee Retirement Income Security Act (ERISA) when it held on to its own devalued stock, enabling the corporation to enter into 4040(c) safe harbor - a legal motion akin to filing for bankruptcy.
Baxter's stock value had dipped when rumors circulated that the company would not meet earnings goals for the fiscal year.
In her ruling, Gottschall determined that Baxter has followed its own ERISA plan by providing for individual accounts, allowing participants the opportunity to exercise control over their accounts, providing a number of investment alternatives, informing enrollees of their options and providing additional safeguards for their employees.
The class action lawsuit was brought forth by Baxter employees who claim that that the company purposefully inflated its expected earnings statements in an attempt to devalue its own stock and buy out its employees.
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