Peregrine no longer bankrupt
- By Michael Hardy
- Aug 07, 2003
Peregrine Systems Inc. has emerged from Chapter 11 bankruptcy and plans a renewed push into the federal market.
The company specializes in consolidated asset and services management software, which agency managers use to track equipment and make service decisions based on current information. Peregrine officials pitch the software to government agencies as a tool to consolidate technology assets and use the best commercial practices.
U.S. Bankruptcy Court for the District of Delaware confirmed Peregrine's plan of reorganization July 18, and it became effective today. The company named a new seven-member board of directors.
Debts drove Peregrine to file for bankruptcy last September, after the company restated 11 quarters of revenue, reducing a claimed $1.34 billion in sales to $831 million. Peregrine reached a settlement with the Securities and Exchange Committee in June, agreeing to institute internal controls. SEC decided in July not to seek financial penalties.
With the emergence from bankruptcy, Peregrine officials plan to take the company in new directions in the government market.
"We're going to become more aggressive," said Gary Greenfield, who was named chief executive officer last year. "In the past year, it's always been 'Peregrine does this' with a star next to it [to indicate] that it's in bankruptcy. We're a much stronger company than we were a year ago."
The Bush administration's emphasis on applying commercial practices to government and data sharing plays to Peregrine's strengths, Greenfield said.
"Certainly homeland security has created a focal point for many organizations coming together into a single entity," he said. "But what has really changed in government is to start having some of the same initiatives that commercial businesses are having. There's interconnection between [agencies], and even within agencies."
Greenfield attributed the bankruptcy to the company's overspending in recent years. "It got ahead of itself," he said. "It's very simple. You've got to know where the return was going to come from. The company was spending too much."
SEC documents tell a darker story. In June, regulators formally accused Peregrine of illegal transactions in which the company would book sales to resellers with the tacit understanding that the resellers were not obligated to pay. Peregrine did this when it needed revenue on the books to meet its forecasts, SEC officials alleged.
SEC also accused the company of taking part in sales in which it essentially bought its own software on behalf of customers and routinely kept the books open past the end of a quarter to record sales for that period.