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Case Status:    SETTLED
On or around 04/06/2011 (Ongoing date of last review)

Filing Date: May 06, 2002

The original complaint alleges that the defendants violated section 10(b) of the Securities Exchange Act of 1934 ("the Exchange Act"), and Rule 10b-5 promulgated there under, and Section 20(a) of the Exchange Act, by making materially false and misleading statements regarding Peregrine and its audit activities. Before the market opened on Monday, May 6, 2002, Peregrine shocked the market by announcing that its board of directors had authorized an internal investigation into accounting inaccuracies, totaling as much as $100 million. The Company disclosed that these transactions and other accounting matters to be investigated may impact financial results for periods in fiscal 2002 and prior. Simultaneously the board of directors announced that Peregrine's Chairman of the Board and Chief Executive Officer and its Chief Financial Officer had both resigned all of their positions with the Company. The complaint filed on June 24, 2002, was filed on behalf of Peregrine employees who purchased Peregrine stock through employee stock purchase programs during the period from 29 June 1999 through 6 May 2002. The Press Release dated June 21, 2002, was brought forward on behalf of those persons who recieves Peregrine stock in exchange for their stock in Remedy Corporation , in connection with its acquisition by the Company on or around August 27, 2001. This complaint alleges that the defendants violated Sections 11 and 15 of the Securities Act of 1933 by making materially false and misleading statements regarding Peregrine's revenue and income for fiscal year 2000 and certain fiscal periods in 2001 in the Registration Statement and Prospectus issued in connection with the Company's acquisition of Remedy. On May 23, 2002, the Company shocked the market by announcing that it was restating up to $ 100 million of previously recognized revenues for fiscal years 2000, 2001 and the first three quarters of 2002, based on information resulting from its ongoing internal investigation into accounting "errors and irregularities." Peregrine also reported that the SEC has begun an investigation into the Company's accounting practices.

Several class actions were consolidated pursuant to an Order of the Court entered on July 23, 2002. By Order dated January 30, 2003, the Court appointed the Loran Group as the Lead Plaintiff for securities fraud claims arising under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“1934 Act”) and Heywood Waga as Lead Plaintiff for claims on behalf of persons who held shares of either Harbinger Corporation (“Harbinger”) or Remedy Corporation (“Remedy”) and who acquired Peregrine registered common stock in connection with Peregrine’s acquisition of these companies (the “Subclasses”). The Court further appointed the law firm of Gold Bennett Cera & Sidener LLP as Lead Counsel for the Section 10(b) claims and the law firms of Abraham Fruchter & Twersky LLP, and Stull, Stull & Brody as Lead Counsel for the claims brought on behalf of the Harbinger and Remedy Subclasses. On April 5, 2004, Lead Plaintiffs filed a First Amended Consolidated Class Action Complaint For Violations Of The Federal Securities Laws (the "Complaint"). Because Peregrine had filed for bankruptcy in September 2002, it was no longer named as a defendant in the Complaint. The Court, in an Order dated March 30, 2005, granted in part and denied in part, motions to dismiss filed by various defendants, including certain of the Settling Defendants. Specifically, the Court dismissed the Sections 10(b) and 20(a) claims against Arthur Andersen, Watrous and Savoy, dismissed the Sections 14(a) and 15 claims against Watrous and Savoy, refused to dismiss the Section 11 claims against Watrous and Savoy, and refused to dismiss the Sections 11 and 14(a) claims against Arthur Andersen. Thereafter, the Court entered a Rule 54(b) judgment as to the Section 10(b) claims. Lead Plaintiff the Loran Group is appealing the dismissal of those claims. Various defendants, including Watrous and Savoy, subsequently sought to have the Section 11 claims dismissed based on new Supreme Court authority concerning loss causation. Those motions were denied by the Court in December 2005.

According to the Notice of Pendency of Class Action dated July 31, 2006, several partial settlements have been established, in the aggregate principal amount of $56,292,922, to settle claims with certain defendants: Arthur Andersen, Douglas S. Powanda, a former officer of Peregrine, William D. Savoy, a former director of Peregrine, and Thomas G. Watrous, also a former director of Peregrine. The Non-Settling Defendants are Stephen P. Gardner, Matthew C. Gless, Steven S. Spitzer, Ilse Cappel, John J. Moores, Richard T. Nelson, Frederic B. Luddy, Charles E. Noell III, Norris van den Berg, Richard A. Hosley II, Christopher A. Cole, Rodney T. Dammeyer, KPMG LLP, BearingPoint, Inc. and Larry Rodda. A hearing will be held before the Honorable Roger T. Benitez, in the United States Courthouse, 880 Front Street, Suite 4290, San Diego, CA 92101-8900, at 9:00 a.m., on November 8, 2006 (the “Settlement Fairness Hearing”) to determine whether the Andersen Settlement, the Powanda Settlement, the Savoy Settlement, and the Watrous Settlement, are fair, reasonable and adequate, to consider the proposed Plan of Allocation of Settlement Proceeds, and to consider the application of Lead Counsel for an award of attorneys’ fees and reimbursement of expenses.

On November 15, 2006, District Court Judge Roger T. Benitez approved the plan of allocation and signed several Order and Final Judgments approving the partial settlements and dismissing the action against the settling defendants. The Court also awarded attorneys’ fees in the amount of 25% of the settlement funds as well as in the funds recovered by Lead Counsel in Peregrine's bankruptcy case and reimbursement of expenses in the amount $655,926.34

On January 8, 2009, the U.S. Court of Appeals for the Ninth Circuit issued the Order remanding the case for the limited purposes of seeking settlement approval with the Appellant Loran Group and certain settling Appellees John J. Moores, Charles E. Noell III, Christopher A. Cole, Norris van den Berg, Richard A. Hosley II, Rodney F. Dammeyer, Richard T. Nelson, and Frederic B. Luddy. As to Appellees BearingPoint, Inc., KPMG LLP, and Larry Rodda, the stay previously entered by this court is vacated. As to those Appellees, this case is resubmitted for decision.

According to an article dated January 26, 2009, the U.S. Court of Appeals for the Ninth Circuit has affirmed the dismissal of claims against the company’s financial advisory firm, KPMG LLP, which was accused of participating in the scheme. On Friday, the Ninth Circuit issued an opinion affirming the U.S. District Court for the Southern District of California’s dismissal with prejudice of claims against KPMG and spin-off company BearingPoint in the long-standing suit filed by investors against 17 individuals and four business entities over the accounting misdeeds at Peregrine.

On February 9, 2009, a joint motion for preliminary approval of the proposed settlements was filed. That day, two Stipulation and Agreement of Settlements were filed with the Settling Defendants. The first Stipulation establishes a settlement fund in the amount of $55,950,000 and settles claims against six individual defendants. The second Stipulation establishes a settlement fund in the amount of $125,000 and settles claims against four individual defendants. The non-settling defendants are KPMG LLP, BearingPoint, Inc. and one individual defendant.

On July 13, 2009, Judge Roger T. Benitez preliminarily approved the settlements. The Settlement Fairness Hearing is set for October 16, 2009. On October 22, 2009, Judge Roger T. Benitez signed the Order Awarding Attorneys' Fees and Reimbursement of Expenses. According to the Order, the Court awards Lead Counsel attorneys’ fees 20% of these Settlement Funds or $12,233,260. The Court further awards reimbursement of expenses in the amount of $179,741.33. On November 3, 2009, Judge Benitez signed two Final Order and Judgments for the two pending partial settlements.

On August 16, 2010, the plaintiffs filed a motion to dismiss two individual defendants from the action. The motion was granted on September 13, 2010.

COMPANY INFORMATION:

Sector: Technology
Industry: Software & Programming
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: PRGN
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. California
DOCKET #: 02-CV-00870
JUDGE: Hon. Napoleon A. Jones Jr.
DATE FILED: 05/06/2002
CLASS PERIOD START: 04/01/2000
CLASS PERIOD END: 05/06/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Finkelstein & Krinsk LLP
    501 West Broadway, Suit 1250, Finkelstein & Krinsk LLP, CA 92101
    877.493.5366 619.238.5425 ·
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COURT: S.D. California
DOCKET #: 02-CV-00870
JUDGE: Hon. Napoleon A. Jones Jr.
DATE FILED: 04/05/2004
CLASS PERIOD START: 07/22/1999
CLASS PERIOD END: 05/03/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Abraham & Associates
    One Penn Plaza, Suite 1910, Abraham & Associates, NY 10119
    212.714.2444 212.714.2444 · Larryl@abrahamlaw.com
  2. Gold Bennett Cera & Sidener LLP
    595 Market Street, Suite 2300, Gold Bennett Cera & Sidener LLP, CA 94105-2835
    800.778.1822 415.777.5189 · info@gbcsf.com
  3. Stull, Stull & Brody (Los Angeles)
    10940 Wilshire Boulevard - Suite 2300, Stull, Stull & Brody (Los Angeles), CA 90024
    310.209.2468 ·
No Document Title Filing Date
No Document Title Filing Date
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