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Peregrine Creditors' Committee Approves Settlement

20 October 1998

Peregrine Creditors' Committee Approves Settlement With Company and General Motors

    DETROIT, Oct. 20 -- Peregrine Incorporated's Informal
Unsecured Creditors' Committee today announced a successful end to
negotiations between Peregrine, the Committee and General Motors --
Peregrine's major customer -- to resolve the treatment of unsecured trade
creditors who were owed money at the time of the announcement of Peregrine's
sale last spring to Jay Alix-led Peregrine Acquisition, Inc.
    The Creditors' Committee is recommending the proposed settlement, under
which GM would fund up to $20 million for payments of trade suppliers' claims
that were "frozen" by Peregrine.  The settlement, if accepted by 90 percent of
the creditors, would constitute approval of an out-of-court plan of
reorganization for the company.  Trade suppliers under this settlement would
receive approximately one-third of the frozen debt owed to them.  The company
is paying for goods and services received after April 24, 1998 in the ordinary
course of business.
    In a letter to affected creditors, the Creditors' Committee said that it
"believes it is in the best interest of trade creditors to accept the plan"
and cited an extensive Arthur Andersen investigation of claims which concluded
that creditors would not receive "any significant dividend outside of the
context of the settlement."  The Committee also stated its belief that if a
moratorium on creditors' litigation against Peregrine is not honored through
the deadline for acceptance of the settlement, the result "may leave Peregrine
with no alternative other than to file for relief under Chapter 11 and
applicable Canadian law."  Ultimately, the letter said, there could be no
assurance that pursuit of legal claims would produce a resolution in excess
of, or even equal to, the proposed settlement.
    Creditors have until Nov. 27 to approve the proposed settlement.