The San Diego, California-based asset-management software vendor filed for Chapter 11 bankruptcy protection in September 2002 after a run of revenue-recognition irregularities, two changes of auditors, and the purging of all its top executives.

The company described the agreement with its unsecured creditors as a significant milestone in moving Peregrine’s Chapter 11 reorganization forward to completion. It is subject to court approval and the filing of audited financial statements for 2002, 2001 and 2000 by the company no later than Friday, February 28.

Under the terms of the deal, which was filed with the US Bankruptcy Court in Delaware on Tuesday, Peregrine’s current chairman John Moores, as well as outside board members Christopher Cole, Charles Noell and Thomas Watrous, will resign on March 1, making way for a new five-member board.

The company’s CEO, Gary Greenfield, will remain on the board, while Thomas Weatherford, the former chief financial officer of Business Objects SA, will be elected to the board. Greenfield and Weatherford will then have until March 14 to name the three other new board members, with retired bankruptcy judge Erwin Katz serving as a consultant in the interim.

Greenfield joined Peregrine in June 2002 after former chairman and CEO Steve Gardner quit the company along with its CFO Matt Glass in May 2002. This followed the discovery by auditors KPMG of revenue-recognition irregularities that led the company to restate its revenue by approximately $250m, covering the first three quarters of fiscal 2002, as well as the whole of 2000 and 2001.

KPMG replaced Arthur Andersen in April 2002 after the accountants were disgraced by the Enron affair. Peregrine later appointed PricewaterhouseCoopers as its third auditor in three months, citing a conflict of interests with KPMG due to a number of existing contracts with KPMG Consulting, and filed a lawsuit for more than $1bn against Arthur Andersen.

The deal between Peregrine and the Creditors Committee also sees them naming retired bankruptcy judge Ralph Mabey as mediator to settle any disputes that may arise as the company attempts to emerge from bankruptcy protection. The company’s financial arrangements are also under investigation by the Securities and Exchange Commission and the US Department of Justice.

Source: Computerwire