Peregrine emerges from Chapter 11

By Peter Heap

New York, Aug. 7 - Peregrine Systems, Inc. said it emerged from Chapter 11 Thursday.

The restructuring was implemented through its fourth amended plan of reorganization, confirmed on July 18, with changes to reflect a consensus among all major constituencies, including the official committee of unsecured creditors and the official committee of equity security holders.

Under the reorganization, Peregrine will issue 15 million new shares of common stock; the old stock and the existing $270 million 5½% convertible subordinated notes due 2007 will be cancelled.

Holders of Peregrine's convertibles will receive cash equal to 30% of the $277 million principal and accrued interest on the bonds, $58.8 million of new 6½% senior notes due 2007 and 63% of the stock of the reorganized company.

Stockholders and claimants in securities litigation will receive 33% of the stock of the reorganized company. The division between the two groups will likely be decided in a settlement between the equity committee representing holders of the old stock and representatives of securities litigation claimants, Peregrine said.

The remaining 4% of the stock will be reserved for later distribution to either noteholders or stockholders and securities litigation claimants or both.

A further 2.65 million of the new shares have been reserved for the company's equity incentive plan.

The San Diego provider of consolidated asset and service management software filed for bankruptcy on Sept. 22, 2002 after accounting irregularities came to light, requiring a restatement of 11 quarters of financial results.

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