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CGRN.US
id: 849

Capstone Green Energy (CGRN) Investor Settlement

The parties have reached an agreement to settle the case, but the terms are still being finalized.
C.D. California
Court
2:23-cv-08659
Case number
06/14/2021
Class period Start
09/22/2023
Class period End
Capstone Green Energy has reached a settlement with $CGRN investors over claims of inflating revenue through improper "bill-and-hold" transactions.

Overview

Between August and September 2023, Capstone disclosed significant financial reporting errors, leading $CGRN to drop by 30% and its eventual Chapter 11 bankruptcy filing. In October 2023, investors filed a lawsuit against Capstone, claiming the company had misled them about inflated revenue and hid financial information.


Timeline

  • August 15, 2023 – Capstone delayed filing its 10-Q due to an internal investigation; $CGRN fell 5%.
  • August 18, 2023 – NASDAQ notified Capstone of noncompliance with listing requirements; $CGRN dropped 30%.
  • September 22, 2023 – Capstone disclosed financial reporting errors related to revenue recognition; $CGRN declined further.
  • September 28, 2023 – Capstone filed for Chapter 11 bankruptcy; $CGRN fell 17%.
  • October 10, 2023 – Investors sued Capstone for hiding financial information and reporting inflated revenue.
  • January 2025 – Capstone agreed to a settlement with investors, pending court approval.

Background


In June 2021, Capstone started reporting revenue for undelivered products, creating an inflated financial outlook. For years, the company presented strong revenue growth, while failing to disclose that much of it came from improper "bill-and-hold" transactions rather than actual sales.

In August 2023, Capstone delayed its quarterly filing, citing an internal investigation by its Audit Committee. The investigation found material revenue recognition errors, rendering prior financial statements unreliable. This led to significant declines in $CGRN’s value.

By September 2023, Capstone’s financial instability worsened, and the company filed for Chapter 11 bankruptcy, causing $CGRN to drop another 17%.

On October 2023, investors filed a class-action lawsuit against Capstone, alleging financial misrepresentation and inflated revenue reporting.


What Can Investors Expect Now?


Capstone Green Energy has reached a settlement with $CGRN investors over claims of inflating revenue through improper "bill-and-hold" transactions.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.
Case Status
Tentative Settlement
Alleged Offence
Misleading Statements
Financial Misrepresentation
Failure to Disclose
Omissions
Suspected Party
Directors
Management
Security Type
Stocks
Trade Direction
Long
Filing date
10/13/2023
Lead Plaintiff Deadline
12/12/2023
Plaintiffs
Thomas Spitzer
Attorneys
Glancy Prongay & Murray LLP (Los Angeles, CA), The Law Offices of Frank R. Cruz (Los Angeles, CA)
Defendants
Robert C. Flexon, Darren R. Jamison, John J. Juric, Scott W. Robinson, Frederick S. Hencken III
Trades matching type
FIFO

Capstone Green Energy Corp

Capstone Green Energy Corporation develops, manufactures, markets, and services microturbine technology solutions for use in stationary distributed power generation and distribution networks applic...

    Ticker
    CGRN.US
    ISIN
    US14067D5086
    CIK
    1009759
    Sector
    Industrials
    Industry
    Specialty Industrial Machinery
    Country
    USA
    Address
    16640 Stagg Street, Van Nuys, CA, United States, 91406