In Re Peerless Systems, Corp. Securities Litig.

ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS THE AMENDED AND CONSOLIDATED COMPLAINT

This matter came on regularly for a hearing on Defendants’ motions to dismiss the Amended and Consolidated Complaint. Jeffrey Krinsk of Finkelstein & Krinsk appeared for the Plaintiffs. Nina Locker and Ellen Solomon of Wilson Sonsini Goodrich & Rosati appeared for Defendants.

BACKGROUND

Plaintiffs bring this action on behalf of purchasers of shares of Peerless Systems Corporation (hereinafter referred to as “Peerless” or “Company”) securities from June 11,1999, through May 25, 2000, inclusive (“Class Period”). (Amended and Consolidated Complaint (“AC”) ¶ 1.) Peerless is a leading provider of software-based embedded imaging and networking systems to original equipment manufacturers (“OEM”) of digital document products. (AC ¶ 10.) During the Class Period, Defendant Edward A. Gavaldon (“Gavaldon”) was the Chairman, Chief Executive Officer, and President of the Company, and Defendant Thomas B. Ruffolo (“Ruffolo”) was its Vice President. (AC ¶¶ 11-12.)

Plaintiffs contend that Defendants artificially inflated the price of Peerless stock to maximize the use of the stock as “currency” to acquire two…