US judge allows Openwave options suit to go ahead

By Paritosh Bansal

NEW YORK, Nov 1 (Reuters) - A U.S. judge has ruled that a shareholder lawsuit against Openwave Systems Inc (OPWV.O: Quote, Profile, Research, Stock Buzz) and former and current officials over their roles in an alleged scheme to backdate stock options can go forward.

U.S. District Judge Denise Cote, in an opinion dated Oct. 31, denied the defendants' request to throw out the entire case, saying certain claims against the company and nine individuals, including two former chief executives and two former chief financial officers, could proceed.

The lead plaintiff, an Arkansas pension fund, had alleged "with specificity" that four former executives, including ex-CEO Donald Listwin and ex-CFO Alan Black, had received backdated options, Cote wrote.

Cote let stand another count that names ex-CEO David Peterschmidt and ex-CFO Harold Covert among others in connection with their positions of control at the company.

Cote also let certain claims proceed against three directors who were on the compensation committee of Openwave's board. Two of them are still on the board, according to information on the company's Web site.

"This is a groundbreaking decision because there are very few decisions in this area going one way or another," said Chad Johnson, lawyer for the plaintiffs.

"This is a detailed and well-reasoned decision," added Johnson, of the firm Bernstein Litowitz Berger & Grossmann. "It will be, I suspect, looked at by courts across the country who are considering similar cases."

An Openwave representative could not be reached immediately for comment.