Pembridge Capital Management nominates three to Peerless Systems board in proxy battle

By Lisa Kerner

Charlotte, N.C., May 2 - Pembridge Capital Management LLC nominated Timothy Brog, Rimmy Malhotra and Eric S. Newman for election to the Peerless Systems Corp. board of directors at the upcoming 2007 annual meeting of stockholders.

"We are obviously troubled by the massive destruction of shareholder value during a time of tremendous expansion in Peerless' core markets," Brog, Pembridge's portfolio manager, said in a company news release.

"For too long the company's board of directors has failed to maximize shareholder value."

In addition, Pembridge formed the Peerless Full Value Committee to file preliminary proxy statements with the Securities and Exchange Commission and to solicit support from other shareholders.

The company's common stock reached $11.00 per share 10 years ago and sank 83% to a 52-week low of $1.86 on March 14. During the same time, the company's book value per share dropped 65% to $0.94 from $2.68, according to the release.

Pembridge noted that also during the past decade, the number of Peerless' fully diluted outstanding shares "has sky rocketed as its board has issued equity without restraint and thereby [reduced] value."

The Pembridge board nominees are committed to exploring "all strategic alternatives to maximize shareholder value, including the sale of all or part of the company, a large special dividend, a significant repurchase of Peerless common stock either in the open market or as part of a self-tender, and other alternatives they might find to be value enhancing," the release stated.

Peerless is based in El Segundo, Calif., and provides software-based imaging systems for digital document products.

New York-based Pembridge is the management company for Pembridge Value Opportunity Fund LP, a Delaware limited partnership.

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