Theodora Oringher Law Firm Files Defamation Lawsuit on Behalf of Former Microsemi Senior Executives Against Microchip Technology, Inc., CEO Steven Sanghi and Senior Management

COSTA MESA, Calif., Oct. 16, 2018 /PRNewswire/ -- Four former senior executives from Microsemi Corporation have filed a defamation lawsuit against their merger partners Microchip Technology, Inc. (Nasdaq: MCHP), its CEO Steven Sanghi, and other members of Microchip's senior management. The suit seeks the retraction of numerous allegedly false and defamatory statements by Microchip following the closing of the merger between the two companies on May 29, 2018.

The Complaint has been filed on behalf of James J. Peterson, who served as Microsemi CEO for the past 18 years; Paul Pickle, who joined Microsemi 18 years ago, and most recently served as President and COO; Rick Goerner, who served as Microsemi's Executive Vice President, Worldwide Sales; and Philip Sansone, who was Microsemi's Vice President, Global Distribution Sales. 

Together with their colleagues, plaintiffs Peterson, Pickle, Goerner and Sansone presided over remarkable long-term growth, establishing Microsemi as a global leader in manufacturing and distributing high-performance integrated circuits. In 2017, the company reported record sales of $1.8 billion, with revenues expected to exceed $2 billion in 2018. Under the leadership of Mr. Peterson and Mr. Pickle, Microsemi achieved 44 straight quarters of meeting or exceeding earnings projections. 

The complaint asserts that Microchip's false and defamatory allegations have damaged the hard-earned reputations of the former Microsemi executives. Plaintiffs' main goals for this litigation are to educate the public about the truth, and to protect and restore their reputations.

Plaintiffs' complaint outlines the following facts:

• Microsemi provided voluminous data to Microchip and honored every single request for information. Well before the merger's closing, Microsemi provided comprehensive, detailed data regarding the company's financial performance and its planning and forecasting processes, including explicit data regarding Microsemi's distribution practices. Historic data going back three years was provided, detailing channel inventory levels by product line. Microchip was provided with ample information with which it could confirm that Microsemi properly reported revenue in accordance with GAAP standards.
  
  
• Microchip never requested additional information on any performance metrics. In addition to the specific data provided about inventory channels, Microsemi also gave Microchip access to the company's "data room" with over 15 gigabytes of information (more than 4,650 files). Information on any topic – including historic shipping levels, the amount of inventory in the channel at any given time, or product demand – was easily and readily available during the due diligence process months before the closing.
  
  
• Despite Microsemi's exhaustive and good-faith efforts to provide all company information and financial data, Microchip has made numerous defamatory allegations that have damaged Microsemi and its executives. These demonstrably false allegations include claims that Plaintiffs engaged in "channel stuffing" – a highly derogatory term in the industry; that Plaintiffs concealed information regarding sales, inventory levels, and other data until after the merger closed; and that Microsemi employed a "fake revenue process."

The complaint states that Microchip has used these false allegations to justify their decisions to reduce shipping, cut revenue-generating programs, and deny employees the incentive compensation they have earned. Further, it states that the company has also perpetuated a myth among analysts and investors that any "headwinds" Microchip faces are due to information they supposedly only learned after the merger closed.

Plaintiffs Peterson, Pickle, Goerner, and Sansone seek a full retraction of these accusations. Specifically, they insist on the acknowledgement of the following facts: 

1. Microsemi and its executives were comprehensive and truthful regarding every single request for information, including the disclosure of current and history inventory levels in the channel.
   
   
2. Microsemi did not ship inventory in excess of demand. All product shipped to distributors reflected ultimate demand; inventory held by distributors remained stable from quarter to quarter; and there were no abnormal returns by distributors. Inventory levels could not have surprised Microchip because all information was provided well in advance of the merger closing. 
   
   
3. Microsemi reported revenues properly and accurately; Microsemi's revenue process was not "fake."

The case was filed by the Theodora Oringher law firm, which specializes in high-stakes, complex litigation and trials. Firm founder Todd Theodora, and Jeffrey Reeves, are co-lead counsel on the matter. Mr. Theodora is one of the county's most well-known trial attorneys. After vigorously prosecuting a complex commercial matter against an international defendant corporation, Mr. Theodora recently obtained the largest award in a breach of contract case in California. Mr. Reeves spent 26 years with Gibson Dunn's Orange County office, including eight years as the managing partner of the office. He recently tried and won a case obtaining a complete defense verdict on behalf of his clients, the founder, CEO, and other senior executives of a well-established company, who were being sued for $44 million.

For further information about this case please refer to the October 9, 2018, Complaint filed in Orange County Superior Court, captioned James J. Peterson, et al. v. Steven Sanghi, et al., Case No. 30-2018-01023948 or view it here.

SOURCE Theodora Oringher