Former Entellium executives Paul Johnston and Parrish Jones are discussing a plea agreement with federal prosecutors in order to reduce prison sentences in the wire fraud case. "My expectation is that there would be a resolution of the case in the next month," said Emily Langlie, a spokeswoman for the U.S. Attorney's Office.

However, Langlie noted that the information document filed Nov. 26 [PDF: 4 pages] does not guarantee that a deal will be struck and that the case could still head to trial.  Wire fraud is punishable by as much as 20 years in prison. But those who enter plea agreements are often given reduced sentences for "acceptance of responsibility," Langlie said.

Attorneys for Jones -- who served as the company's finance chief -- have asked the court to waive his right to a speedy indictment so that they can pursue negotiations with prosecutors. They have asked that a possible indictment be extended until December 29.

"After multiple discussions with Assistant U.S. Attorney Carl Blackstone, counsel and Mr. Jones believe that the parties have reached an agreement to resolve the case," court documents say filed by Jones' high-profile legal team. [PDF: 4 pages]

Jones and Johnston allegedly inflated revenue at the maker of customer relationship management software between 2006 and 2008. They reported revenue of $15.4 million for the period, when in fact it stood at  $3.7 million, according to court documents. Prosecutors have alleged that Johnston -- who remains in prison awaiting resolution of the case -- used corporate funds like a "personal piggy bank."

Entellium is on the brink of being sold, with TechFlash reporting Sunday that financial software giant Intuit has made an offer for the assets. Sources say an acquisition of the company may be accompanied by a bankruptcy filing.

Meanwhile, other litigation is piling up against the company. Four companies -- an executive recruiter, a Wed design firm, a computer leasing company and a furniture retailer -- have sued Entellium over the past 40 days for not paying bills.

Also, a former employee has sued the company over not receiving severance after he was laid off.

Entellium, which was founded in 2004 and maintained operations in Malaysia, raised more than $40 million from Ignition Partners, Sigma Partners, Intel Capital and others.