In re Maxwell Technologies, Inc., Securities Litigation
Opinion
Lead Opinion
Benitez, J.
ORDER GRANTING MOTION TO DISMISS
Before this Court is a Motion to Dismiss filed by Defendants Maxwell Technologies, Inc. (Maxwell), David J. Schramm, and Kevin S. Royal. (Docket No. 50). For the reasons stated below, the Motion is GRANTED.
BACKGROUND
Maxwell Technologies is a Delaware corporation based in San Diego, CA. Maxwell develops, manufactures, and markets energy storage and power delivery products, with a primary focus on ultracapacitors. Schramm served as CEO and President of Maxwell from July 2007 to December 31, 2013, and reached an agreement to serve as an advisor for two additional years. Royal has been the Senior Vice President, CFO, Treasurer, and Secretary of Maxwell since April 2001.
On March 7, 2013, Maxwell announced that it was restating its financial statements for 2011 and the first three quarters of 2012. Maxwell’s sales organization made secret arrangements with certain distributors for special payment terms. The distributors would not have to pay Maxwell until the distributor was paid by the customers. Under Maxwell’s revenue recognition policy, revenue is only to be recognized where certain conditions are met, including that the collectability of the…