On February 11, 2026, Judge Edward M. Chen of the United States District Court for the Northern District of California granted a motion to dismiss with prejudice a proposed securities class action against a solar energy company (the “Company”) and its former CEO and CFO (collectively, the “Defendants”), alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5.
Menon v. Maxeon Solar Techs., Ltd., No. 24-cv-03869-EMC (N.D. Cal. Feb. 11, 2026). We
previously covered the Court’s dismissal of plaintiff’s First Amended Complaint, filed in June 2024, without prejudice.
The Company manufactures and sells solar panels and related components. Plaintiff’s Second Amended Complaint (the “SAC”) alleged that the Company faced such serious cash flow problems that its ability to continue as a “going concern” for another 12 months was threatened. Plaintiff further alleged that Defendants were aware of the financial crisis by 2023 and failed to disclose certain factors that would have illustrated the extent of the Company’s potential financial troubles—specifically, that the Company was going to reach the peak prepayment amortization schedule for certain large customers; that lenders refused to extend credit without shareholder guarantees; and that two large customers’ projects were delayed. Plaintiff also alleged that Defendants failed to disclose the Company would likely require liquidity support from a foreign shareholder, which could jeopardize a critical loan from the U.S. Department of Energy due to “foreign influence.”
Defendants argued that plaintiff failed to allege that the challenged statements were materially false or misleading. The Court agreed.
First, the Court rejected plaintiff’s claim that Defendants’ failure to disclose that the Company was at the peak of its prepayment schedule was actionable because plaintiff failed to explain why the Company’s amortization schedule was so significant that it would impact the Company’s ability to continue as a going concern. Second, the Court rejected plaintiff’s argument that the Company’s failure to disclose that lenders were requiring shareholder guarantees was actionable because plaintiff failed to demonstrate that the tightened lending requirements were impacting cash flow or posing an existential threat to the Company’s finances. Third, the Court rejected plaintiff’s argument that the Company’s failure to disclose that it might need liquidity financing from a foreign shareholder—which would threaten a Department of Energy loan for a new factory—was actionable, finding that Defendants’ statements on the subject were neither false nor misleading. Last, the Court rejected plaintiff’s argument that Defendants’ statements failing to disclose the loss of two large customers and the Company’s absorption of related inventory causes was actionable. The Court found that Defendants’ disclosure that the Company was “highly focused on liquidity-management to enable a return to profitability” was mere corporate puffery and did not create an obligation for the Company to disclose the loss of the two customers.
Finding that plaintiff failed to plead any actionable misstatements or omissions, the Court dismissed the Complaint with prejudice.
