Peregrine Systems

(PRGN.PK)

filed for Chapter 11 bankruptcy protection and plans to sell its Remedy unit to

BMC Software

(BMC)

for $350 million in cash.

Peregrine paid about $1.2 billion for the unit in August 2001.

The San Diego-based company has been under fire in recent months after the

Securities and Exchange Commission

launched a formal investigation into its accounting practices. Peregrine was forced to restate its financial records for 2000, 2001, and the first three quarters of 2002. It also restated $100 million in revenue as a result of the investigation. In June, the company cut 1,400 jobs, or nearly 50% of its workforce, and closed several of its plants.

The shares currently trade on the over-the-counter pink sheets for about 20 cents.