“We need to find people who can stand the increased scrutiny that boards are getting these days, especially if they’re coming back after a bankruptcy.” —Jim Jenkins, Mellon HBV

Mutch, the only member of the second board to survive a series of resignations and who is now CEO of Peregrine, says his primary motivation was the challenge of trying to restore Peregrine’s position in the San Diego technology community. “If I could be helpful,” he says, “it would be wonderful.” Just as interesting, he confesses, was the chance to learn, first-hand, how a company makes its way through the bankruptcy process. But it would be tricky: When the second board met for the first time on St. Patrick’s Day in 2003, “we had to start from scratch,” Mutch recalls. “We had to form a board structure, decide who is going to be chair, who is going to be on what committee, on day one, without much more understanding of the people we were working with than we could get from their resumes.”

All too soon, board number 2 encountered one of the major challenges for many directors of post-Chapter 11 companies: finding a way to work with the company’s creditors. At the urging of Greenfield, who believed Peregrine had a stronger future as an independent entity, the board rejected a bid from Hewlett-Packard to buy the company for $250 million, which was more than creditors believed the company was worth.  The relationship between Greenfield and the creditors soured, and when creditors won two-thirds of the equity in the final bankruptcy settlement, they demanded control of the board. Until then, Greenfield says, “the thinking had been that this board would serve as the nucleus” of a new, permanent board of directors, but creditors saw things differently. Even as cleanup began after the company’s “Back to the Black” party on a hot Thursday night last August, creditors announced the formation of board number 3, dominated by their own members. Greenfield resigned, and Mutch succeeded him.