Peregrine files for bankruptcy and sells Remedy
Peregrine Systems has filed for bankruptcy in the USA. It has also launched a US$1 billion lawsuit against auditor, Arthur Andersen and sold its Remedy unit to BMC for US$350 million in cash, less than a third of what it paid for it.
After months of problems, software company, Peregrine Systems has filed for bankruptcy in the USA. It has also launched a US$1 billion lawsuit against auditor, Arthur Andersen and sold its Remedy unit to BMC for US$350 million in cash, less than a third of what it paid for it.
Peregrine filed for Chapter 11 protection in Sunday, which had been expected since April when it delayed its quarterly earnings report and fired Andersen. The company told the Security & Exchanges Commission that it had incorrectly reported US$100 million in revenue over the past three years and top executives quit.
The software company is now blaming Andersen for the mess, and launched a suit against Arthur Andersen Worldwide, Arthur Andersen Germany and the audit partner who examined the books, Daniel Stulac.
“The board trusted our former independent auditors, Arthur Andersen, and they failed to live up the responsibilities required in that relationship,” says Gary Greenfield, Peregrine’s CEO.
Selling Remedy relieves some of the pressure on Peregrine and ends years of longing for BMC, which first tried to buy the then independent company in 1997.
"BMC is very well positioned to deliver what today's business leaders demand - an integrated IT and service process view for running their business," says Bob Beauchamp, president and CEO, BMC Software.
"We have long recognized the strength and market leadership of Remedy, even under difficult circumstances, and the value that our complementary solutions bring customers. This acquisition is about fostering growth, and with the financial strength of BMC, customers can be assured that Remedy is better positioned now more than ever to continue to deliver value-added solutions to the market," he adds.
Greenfield says that the sale secures the future of both Remedy and it customers. He adds that Peregrine intends “to work closely with BMC to assure a smooth transition of all aspects of the Remedy business, and support those customers who use both Peregrine and Remedy products. We are confident that our customers and partners will be supportive of our efforts.”