Opinion ID: 198674
Heading Depth: 4
Heading Rank: 1

Heading: The Merisel Transactions

Text: 104 The Merisel allegations involve one $130,078 transaction in August 1995 and two transactions in late September 1995 totaling $548,192. Plaintiffs claim that the August transaction, for which FTP issued an invoice, was not a true sale but a stock rotation, in which FTP replaced outdated products in Merisel's inventory at no charge. Plaintiffs point to a credit issued to Merisel by FTP in mid-October for the full amount. Less detail is provided concerning the September transactions. To support their contention that those transactions were improperly booked contingent sales, plaintiffs proffer three items: the $548,192 posted to accounts receivable on September 29; the fact that $494,872 remained unpaid as of December 31; and the agreement between Merisel and FTP, which states that Merisel will pay FTP for all copies of FTP's products sub-licensed by Merisel and its dealers. 105 A possible -- though far from necessary -- conclusion is that the August transaction was an exchange of new products for old improperly booked as a sale, as the original Merisel purchase order contains the notation [o]ffsetting order f. stockrotation (sic). The September transactions, on the other hand, are described in insufficient detail to support plaintiffs' allegations. The mere existence of an overdue receivable does not support an inference that the original transaction was booked as a sale in violation of GAAP. 106