A securities class action settlement was recently proposed for a suit previously filed against Maxwell Technologies, Inc.
Based in San Diego, California, Maxwell Technologies designs, manufactures and markets products that provide energy storage and power delivery. The company specifically creates these products for use in many applications, including wireless communications, automotive, backup power, heavy transportation and renewable energy.
The legal claim was brought forth to represent all individuals or organizations that bought or otherwise acquired the company's common shares between April 29, 2011, and March 19, 2013. These dates are inclusive, and represent the class period. The people and entities that came to own the aforementioned securities during the class period are known as the settlement class.
The securities class action involved allegations the company's financial department did not account for payments made to distributors for the entirety of fiscal year 2011 and the majority of the following fiscal year, and that Maxwell Technologies deceived investors as a result, according to Law360.
Summary notice released
On Nov. 24, 2014, Saxena White P.A. released a summary notice, which provided several details on the status of the shareholder lawsuit. The notice indicated the U.S. District Court for the Southern District of California had issued an order, certifying the litigation, with case number 3:13-cv-00580-BEN-RBB, as a class action on behalf of the settlement class.
The notice contained several key documents, including:
I) The Settlement Fairness Hearing
II) The Certification of Settlement Class, the Pendency of Class Action and Proposed Settlement
III) A motion to reimburse litigation expenses and attorney's fees
Request for settlement
The aforementioned court granted the litigation class action status pursuant to Rule 23 of the Federal Rules of Civil Procedure. The court made this decision after a request was made in October to approve the proposed $3.3 million settlement, according to Law360. The pension fund which brought forth the consolidated securities class action against the defendant asked the federal judge to accept the proposed amount.
Before the pension fund requested this approval, Maxwell Technologies attempted to have the lawsuit dismissed, the media outlet reported. After this request failed, the company worked with the pension fund to reach the proposed settlement amount and then asked that the court approve the agreement.
The law firm notified interested parties that a hearing had been scheduled for Feb. 5, 2015, at the U.S. District Court, Southern District of California. The announcement revealed that the Honorable Roger Benitez would preside over the hearing, which would take place at 9 a.m. in Courtroom 5A of the Edward J. Schwartz U.S. Courthouse.
The hearing was scheduled to determine several matters, including whether the court should approve the proposed settlement – outlined in the Stipulation of Settlement dated Oct. 6, 2014 – as being reasonable, fair and adequate, and also whether the securities class action should be dismissed as set forth in the Stipulation agreement.
In addition, the hearing was scheduled to determine whether the court should approve the applications for fees and expenses, and whether the plan to allocate the proceeds of the settlement was reasonable, fair and adequate.
How this affects shareholders
The law firm further went on to note that the securities class action could impact shareholder rights. More specifically, members of the settlement class might be entitled to receive some of the proceeds of the settlement fund. Eligible investors can submit written requests to Maxwell Technologies if they want to obtain key documents including the Proof of Claim Form and the Notice.