PhillyInc

If there’s a breeze on this hot summer day, it’s the giant sigh of relief from Horsham, home of Astea International Inc. (NASDAQ: ATEA), a business software company founded in 1979 and still run by Zack B. Bergreen. A federal judge in Philly, William Yohn, threw out a class action shareholders’ suit filed in 2006 against Astea, accusing it of overstating the company’s financial health, even as officers sold parts of their stakes. When the company later announced it needed to restate earnings, its shares dropped nearly 30 percent.

The company’s president and general counsel, John Tobin, told us that it was a mistake, not a scam. “We’re not proud to have to have any accounting error.” As to the nefarious motives alleged in the lawsuit, he said: “That’s not correct.”

The suit was filed in April 2006 on behalf of holders of Astea’s common stock between May 11, 2005 and March 31, 2006, when the company announced the restatement. Officers sold shares in November 2005.

Tobin said the best news for Astea is that the suit was thrown out before the discovery stage, where it can cost hundreds of thousands to defend pre-trial. “That’s when your costs of litigation start skyrocketing. They just want the leverage and that’s why it’s great to have it dismissed at this point.”

Among the lawyers representing plaintiffs were Robert Roseman and David Felderman of Spector Roseman and Kodroff P.C. in Philadelphia. Defending Astea before U.S. District Judge William Yohn was Pepper Hamilton LLP. in Philadelphia.

- Jane M. Von Bergen