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SCO-Boies Fee Agreement and SCO Corrects Some SEC Filings
Thursday, November 04 2004 @ 05:39 PM EST

SCO and Boies Schiller & Flexner have finally finalized, as of October 31, their agreement to cap the legal expenses. Sort of cap them. In the vicinity of the moon, more or less. Here is the filing. The new Engagement Letter is here. There is still a contingency arrangement. In short, Boies' firm intends to be paid. Lawyers like to be paid. They prefer stone cold cash. Up front. Boies Schiller and the other subsidiary firms will take the current litigation through appeals. That means to me they won't take on anything new, not under this agreement anyway.

And SCO also makes some corrections in earlier filings.

Here's the meat of the deal, including the contingency:

Upon executing the Engagement Agreement, SCO paid the Law Firms approximately $12.6 million (in addition to $1.8 million previously paid) for outstanding legal fees and expenses. For future legal fees, the Engagement Agreement will require SCO to pay to the Law Firms $2.0 million per quarter for each successive quarter beginning September 1, 2004 and ending December 1, 2005 for a total amount of $12 million. SCO must also pay one or more contingency fees upon any amount it or its stockholders may receive as a recovery from the SCO Litigation, intellectual property licensing or from a sale of the company.

The contingency fee amounts payable to the Law Firms will be, subject to certain credits and adjustments described in the Engagement Agreement, as follows:

• 33% of any aggregate recovery amounts received up to $350 million;

• plus 25% of any aggregate recovery amounts above $350 million but less than or equal to $700 million;

• plus 20% of any aggregate recovery amounts in excess of $700 million.

The Engagement Agreement specifically provides that, except for the compensation obligations specifically described in the Engagement Agreement and summarized above, SCO will not be obligated to pay any legal fees, whether hourly, contingent or otherwise, to the Law Firms, or any other law firms that may be engaged by the Law Firms, in connection with the SCO Litigation through the end of the current litigation between SCO and IBM, including any appeals. However, SCO will remain obligated to pay any expert, consulting and other expenses (including out-of-pocket expenses of all law firms working on the SCO Litigation) related to the SCO Litigation. The Engagement Agreement also provides that SCO will deposit at least $5.0 million into an escrow fund to cover the payment of such expenses.

Here is the correction:

Item 8.01. Other Events.

SCO inadvertently indicated it was an "accelerated filer" on its Annual Report on Form 10-K for the fiscal year ended October 31, 2003, filed with the Securities and Exchange Commission on January 28, 2004, and on its subsequent Quarterly Reports on Form 10-Q for the first three quarters of fiscal 2004 filed with the SEC on March 16, June 14 and September 14, 2004, respectively. For the fiscal year ended October 31, 2003, SCO did not meet the requirements of an "accelerated filer" as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and, for the fiscal year ended October 31, 2004, SCO continued to not qualify as an "accelerated filer."

The engagement letter says that "This engagement letter does not govern the relationship SCO has or may have with Dorsey & Whitney LLP or other law firms related to litigation, corporate, securities, intellectual property, M&A, tax, employment and other legal services outside the scope of the SCO Litigation." Boies Schiller even got SCO to agree to arbitration in the "unlikely event" of a dispute between them. Don't mess with lawyers unless you are one. A good one. That's my advice. The agreement is signed by Darl McBride, his brother Kevin, David Boies, and Mitchell W. Berger, President of Berger Singerman. That is the firm I first noticed in February of 2003 in connection with the BayStar saga. Here is the engagement letter in full (and for comparison, the February 2003 version is found here, attached to the Dec. 5, 2003 8K):

***********************************

[LETTERHEAD]

October 31, 2004

 Mr. Darl McBride
Chief Executive Officer
[address]

Re:  Engagement Letter

Dear Mr. McBride:

We are pleased to confirm the terms of the retention of Boies, Schiller & Flexner LLP (“BSF”), Kevin McBride and Berger Singerman (together, the “Three Original Firms”) by The SCO Group, Inc. (together with its affiliates, “SCO”) as counsel to SCO in connection with the current litigation between SCO and International Business Machines Corporation (“IBM”), Novell, Inc., Red Hat, Inc., AutoZone, Inc. and DaimlerChrysler, Inc., including all related pending counterclaims and all related counterclaims that may be asserted in the future, all appeals in respect of such litigation and all corporate work, if any, directly related to the foregoing (together, the “SCO Litigation”).  As always the Three Original Firms shall conduct the litigation in a manner consistent with our professional responsibilities.  The terms of this engagement letter will not govern any matters other than the SCO Litigation that any of the Three Original Firms may undertake on behalf of SCO.

All aspects of the SCO Litigation, including the direction and allocation of work in connection with the SCO Litigation and the engagement of additional law firms on behalf of SCO to perform any work required in connection with the SCO Litigation, will be managed and directed by BSF in coordination with SCO’s general counsel.  Notwithstanding the foregoing, BSF shall only engage new law firms on behalf of SCO for the SCO Litigation after consultation with SCO’s general counsel.

In connection with the SCO Litigation, SCO shall pay to BSF by wire transfer in immediately available funds:

  (a)   Immediately upon execution of this engagement letter, $4,616,599.52 ($6,400,000 less $1,783,400.48 paid on September 28, 2004) in satisfaction of all outstanding legal fees and expenses of the Three Original Firms accrued through August 31, 2004.  

(b)    At the beginning of each quarterly period commencing with the quarterly period beginning on September 1, 2004 and ending with the quarterly period beginning on December 1, 2005, $2 million for each such quarterly period (for a total of $12 million), which shall be allocated to the hourly legal fees for work performed by all law firms engaged on behalf of SCO by BSF or with the written consent of BSF in connection with the SCO Litigation as determined by BSF pursuant to this engagement letter.  The first quarterly payment hereunder for the quarterly period beginning September 1, 2004 shall be paid immediately upon execution of this engagement letter by the parties hereto.

  (c)   Immediately upon the execution of this engagement letter, $7,956,000 of which amount $7,160,400 and $795,600 will be allocated to BSF and Berger Singerman, respectively.  

(d)    One or more contingency payments calculated in the manner set forth below on any recovery by SCO or its shareholders of monetary or non-monetary benefits including, without limitation, from (i) the SCO Litigation, (ii) any settlement of claims in the SCO Litigation, (iii) any agreement or transaction in connection with, or in lieu of, settlement of claims in the SCO Litigation and (iv) any licensing or other transaction related to SCO’s intellectual property other than any licensing or other transaction entered into in the ordinary course of business with SCO’s customers for their UNIX systems (each such recovery, a “Litigation Recovery”).  Each contingency payment in respect of a Litigation Recovery shall be due and payable at the time when SCO or its shareholders obtains or receives the benefit of a Litigation Recovery.  Such contingency payments shall be allocated to the law firms other than the Three Original Firms representing SCO in the SCO Litigation as determined by BSF pursuant to this engagement letter.  Such contingency payments, after payment of any accrued but unpaid legal fees of the Three Original Firms and allocation to the law firms other than the Three Original Firms, shall be allocated to the Three Original Firms, with 80%, 10% and 10% allocated to BSF, Kevin McBride and Berger Singerman, respectively.  Each contingency payment shall be calculated as follows:

  1.    A contingency payment on the amount of the aggregate Litigation Recoveries to date (taking into account all prior Litigation Recoveries paid pursuant to this paragraph (d)) up to $350 million equal to the product of the amount of the incremental Litigation Recovery for which a contingency payment has not been made multiplied by 33%, provided, that, to the extent not previously credited pursuant to paragraphs (d) or (e) of this engagement letter, all hourly legal fees paid at any time to the Three Original Firms will first be credited against and deducted from such product to determine the net contingency payment due pursuant to this subparagraph (1) plus

  2.    A contingency payment on the amount of the aggregate Litigation Recoveries to date (taking into account all prior Litigation Recoveries paid pursuant to this paragraph (d)) above $350 million but less than or equal to $700 million equal to the product of the amount of the incremental Litigation Recovery for which a contingency payment has not been made multiplied by 25%, provided, that, to the extent not previously credited pursuant to paragraphs (d) or (e) of this engagement letter, all hourly legal fees paid for work performed on or after September 1, 2004 by law firms other than the Three Original Firms engaged on behalf of SCO by BSF or with the written consent of BSF will first be credited against and deducted from such product to determine the net contingency payment due pursuant to this subparagraph (2) plus

  3.    A contingency payment on the amount of aggregate Litigation Recoveries to date (taking into account all prior Litigation Recoveries paid pursuant to this paragraph (d)) above $700 million equal to the product of the amount of the incremental Litigation Recovery for which a contingency payment has not been made multiplied by 20%.

  (e)   One or more contingency payments calculated in the manner set forth below on any recovery by SCO or its shareholders of monetary or non-monetary benefits including, without limitation, from (i) any disposition whether by sale, merger or otherwise of all or substantially all of SCO’s assets or all or substantially all of SCO’s outstanding shares of capital stock and (ii) any change of control of SCO, defined as any acquisition by any person or group of persons acting in concert of the ability to unilaterally (by such person or group of persons) effect decisions of SCO or rights to appoint 50% or more of the board of directors of SCO, provided that, no contingency payments shall be due solely as a result of or solely arising out of any debt, equity or other financing activities by SCO, provided further that, in the case of clause (ii) above, no such change of control shall be deemed to have occurred solely as a result of any existing shareholder of SCO acquiring additional common stock of SCO or SCO acquiring shares of its common stock through open market or private transactions in each case such that the existing shareholder’s percentage interest in SCO does not increase beyond such shareholder’s percentage ownership of SCO common stock immediately prior to the issuance of Series A Convertible Preferred Stock to BayStar Capital II, L.P. on October 16, 2003 (each such recovery, a “Transaction Recovery”).  The amount of a Transaction Recovery will equal (x) for purposes of clause (i) above, the fair market value of the aggregate monetary or non-monetary consideration paid to SCO or its shareholders, as applicable, including all cash, stock, property and assumed liabilities of SCO (other than any assumed liabilities pursuant to paragraph (d) or this paragraph (e) to the extent such amounts would otherwise be included in this clause (x)) and (y) for purposes of clause (ii) above, the implied enterprise value of SCO as of the date of the triggering event determined with reference to the triggering event, if applicable (other than any assumed liabilities pursuant to paragraph (d) or this paragraph (e) to the extent such amounts would otherwise be included in this clause (y)).  Each contingency payment in respect of a Transaction Recovery shall be due and payable at the time when the triggering event described in this paragraph (e) occurs whether such triggering event occurs in one or a series of transactions taken together.  Such contingency payments shall be allocated to the law firms other than the Three Original Firms representing SCO in the SCO Litigation as determined by BSF pursuant to this engagement letter.  Such contingency payments, after payment of any accrued but unpaid legal fees of the Three Original Firms and allocation to the law firms other than the Three Original Firms, shall be allocated to the Three Original Firms, with 80%, 10% and 10% allocated to BSF, Kevin McBride and Berger Singerman, respectively.  Each contingency payment shall be calculated as follows:

  1.  A contingency payment on the amount of aggregate Transaction Recoveries to date (taking into account all prior Transaction Recoveries paid pursuant to this paragraph (e)) up to $350 million equal to the product of the amount of the incremental Transaction Recovery for which a contingency payment has not been made multiplied by 33%, provided, that, to the extent not previously credited pursuant to paragraphs (d) or (e) of this engagement letter, all hourly legal fees paid at any time to the Three Original Firms will first be credited against and deducted from such product to determine the net contingency payment due pursuant to this subparagraph (1) plus

  2.   A contingency payment on the amount of aggregate Transaction Recoveries to date (taking into account all prior Transaction Recoveries paid pursuant to this paragraph (e)) above $350 million but less than or equal to $700 million equal to the product of the amount of the incremental Transaction Recovery for which a contingency payment has not been made in excess of $350 million but less than or equal to $700 million multiplied by 25%, provided, that, to the extent not previously credited pursuant to paragraphs (d) or (e) of this engagement letter, all hourly legal fees paid for work performed on or after September 1, 2004 by law firms other than the Three Original Firms engaged on behalf of SCO by BSF or with the written consent of BSF will first be credited against and deducted from such product to determine the net contingency payment due pursuant to this subparagraph (2) plus

  3.   A contingency payment on the amount of aggregate Transaction Recoveries to date (taking into account all prior Transaction Recoveries paid pursuant to this paragraph (e)) above $700 million equal to the product of the amount of the incremental Transaction Recovery for which a contingency payment has not been made in excess of $700 million multiplied by 20%.

  Except to the extent otherwise expressly provided in this engagement letter (i) no other legal fees, whether hourly, contingent or otherwise, shall be owing or payable to the Three Original Firms in connection with the SCO Litigation through the end of the current litigation between SCO and IBM, including any appeals and (ii) the Three Original Firms shall have no duties or obligations to SCO.  Subsequent to the end of the current litigation between SCO and IBM, including any appeals, the parties shall determine in good faith how to proceed with any remaining SCO Litigation, to the extent necessary.  Furthermore, the Three Original Firms expressly waive any right to receive the 400,000 shares of SCO common stock referred to in the letter agreement between SCO and BSF dated November 17, 2003.

  BSF shall be responsible for the negotiation of all legal fees to be paid to other law firms engaged to work on the SCO Litigation on behalf of SCO and shall have full authority to negotiate, on behalf of SCO, any fee arrangements deemed appropriate by BSF, including without limitation, any discounts, caps or contingency payments, provided that all legal fees related to the SCO Litigation incurred by law firms engaged on behalf of SCO by BSF or with the written consent of BSF on or after September 1, 2004 shall be paid from the quarterly payments of $2 million and any contingency payments shall be paid from the contingency payments in each case due pursuant to this engagement letter.  The Three Original Firms shall be responsible, so long as SCO has made the payments required herein on a timely basis, for the payment of any legal fees accrued for work after September 1, 2004 by other law firms engaged to work on the SCO Litigation on behalf of SCO by BSF or with the written consent of BSF in the event that such quarterly payments or contingent payments are insufficient to cover any such legal fees, with BSF, Kevin McBride and Berger Singerman each being severally and not jointly responsible for 80%, 10% and 10% of such legal fees, respectively (each a “Required Contribution”).  To the extent that any law firm fails to make a Required Contribution (a “Defaulting Firm”), such Defaulting Firm shall no longer be entitled to any contingency payment due to such Defaulting Firm pursuant to paragraphs (d) or (e) of this engagement letter.  In the event that there is a failure to make a Required Contribution the law firms that have made their Required Contributions shall have the right but not the obligation, (on a pro rata basis if more than one law firm makes such election) to make such Required Contribution on behalf of such Defaulting Firm.  Any such law firm making such election shall receive any contingency payment that would otherwise have been due to the Defaulting Firm pursuant to paragraphs (d) or (e) of this engagement letter but for the failure to make the Required Contribution (on a pro rata basis if more than one law firm makes such election).  If no law firm elects to make the Required Contribution on behalf of such Defaulting Firm, SCO may elect to make the Required Contribution on behalf of such Defaulting Firm.  If SCO makes the Required Contribution on behalf of the Defaulting Firm, SCO shall have the right to receive any contingency payment that would otherwise have been due to the Defaulting Firm pursuant to paragraphs (d) or (e) of this engagement letter but for the failure to make the Required Contribution.

  Promptly upon execution of this engagement letter, SCO shall deposit into an escrow account, with an escrow agent reasonably acceptable to BSF, at least $5 million for the payment of any expert, consulting and other expenses (including out-of-pocket expenses of all law firms working on the SCO Litigation) approved by BSF.  SCO shall be responsible for the payment of any expert, consulting or other expenses (including out-of-pocket expenses of all law firms working on the SCO Litigation) in the event the amount in escrow is insufficient to cover any such expert, consulting or other expenses.  In furtherance of this obligation, SCO shall use commercially reasonable efforts to manage its on-going business in a cash-flow positive or neutral manner consistent with applicable fiduciary duties to its shareholders.  The Three Original Firms shall use reasonable efforts to coordinate the incurrence of significant expenses with SCO’s general counsel.  

In the unlikely event that any dispute arises between the parties in connection with the terms of this engagement letter, the parties agree to submit to arbitration in accordance with the rules of American Arbitration Association in a mutually agreed upon venue.

  This engagement letter does not govern the relationship SCO has or may have with Dorsey & Whitney LLP or other law firms related to litigation, corporate, securities, intellectual property, M&A, tax, employment and other legal services outside the scope of the SCO Litigation.

  This engagement letter constitutes the entire agreement of the parties hereto and supersedes and replaces all prior and contemporaneous agreements, whether oral, written or implied.

  SCO acknowledges and agrees that the contingency payments are reasonable in relation to the services to be provided hereunder given the value of the services to SCO, the time already spent to date by the Three Original Firms, and the normal and customary fees and rates charged by the Three Original Firms.  SCO further acknowledges and agrees that the Three Original Firms have reviewed and explained all of the terms of this engagement letter with SCO, that the Three Original Firms have given SCO an opportunity to ask, and have answered, any questions SCO has had in connection with this engagement letter and that SCO has reviewed this engagement letter with other counsel.

  You are aware that as a result of the types of clients BSF advises and the types of engagements in which we are involved, we may be requested to act for other persons on matters which are not substantially related to the SCO Litigation where the interests of the other persons, and BSF’s representation of them, may be adverse to you.  We would, of course, not be relieved of any obligation we have to retain in confidence any confidential information obtained from you and to refrain from using or disclosing such information in connection with any other representation we may undertake.  

This engagement letter may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute the same engagement letter.  

If the terms of this retention are agreeable, please so indicate by signing below and returning this letter to Christopher Boies at Boies, Schiller & Flexner LLP, 333 Main Street, Armonk, New York 10504.  

Sincerely yours,

/s/ David Boies

Accepted and agreed:

/s/ Darl McBride
Darl McBride
Chief Executive Officer
The SCO Group, Inc.

/s/ Kevin McBride

/s/ Mitchell W. Berger
Mitchell W. Berger, President
Berger Singerman


  


SCO-Boies Fee Agreement and SCO Corrects Some SEC Filings | 380 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Off Topic and Interesting Links Here Please
Authored by: Anonymous on Thursday, November 04 2004 @ 05:58 PM EST
As above

[ Reply to This | # ]

An "accelerated filer"?
Authored by: frk3 on Thursday, November 04 2004 @ 05:59 PM EST

Sorry, but what is an "accelerated filer"? Definition any one?

[ Reply to This | # ]

What is an accelerated filer?
Authored by: Anonymous on Thursday, November 04 2004 @ 06:00 PM EST
title says it all

[ Reply to This | # ]

Out of Pocket Expenses?
Authored by: Anonymous on Thursday, November 04 2004 @ 06:30 PM EST
In agreements like this, I've occasionally wondered how broadly "out of
pocket" expenses gets construed. Clearly, it covers travel costs and court
fees. Does anyone know whether it also covers things like $1-per-page copying
fees, dinners while working late, and other such tack-ons?

[ Reply to This | # ]

Does this mean "we reserve the right to screw you"
Authored by: archivist on Thursday, November 04 2004 @ 06:47 PM EST
"We would, of course, not be relieved of any obligation we have to retain
in confidence any confidential information obtained from you and to refrain from
using or disclosing such information in connection with any other representation
we may undertake."

Apart from the fees? this does not say they won't USE the confidential
information.

[ Reply to This | # ]

If the lawyers spend the expense money, SCO has to make money!
Authored by: globularity on Thursday, November 04 2004 @ 06:53 PM EST
Just noticed this line "SCO shall be responsible for the payment of any expert, consulting or other expenses (including out-of-pocket expenses of all law firms working on the SCO Litigation) in the event the amount in escrow is insufficient to cover any such expert, consulting or other expenses. In furtherance of this obligation, SCO shall use commercially reasonable efforts to manage its on-going business in a cash-flow positive or neutral manner consistent with applicable fiduciary duties to its shareholders."

I would like to see SCOX trying to make some honest money, hardly likely with the talent pool thy have in senior management.


My A$0.02

[ Reply to This | # ]

SCO-Boies Fee Agreement and SCO Corrects Some SEC Filings
Authored by: jim Reiter on Thursday, November 04 2004 @ 07:01 PM EST
"We are pleased to confirm the terms of the retention of
Boies, Schiller & Flexner LLP ("BSF"), Kevin McBride and
Berger Singerman (together, the "Three Original Firms") by
The SCO Group, Inc. (together with its affiliates, "SCO")
as counsel to SCO in connection with the current
litigation between SCO and International Business Machines
Corporation ("IBM"), Novell, Inc., Red Hat, Inc.,
AutoZone, Inc. and DaimlerChrysler, Inc., including all
related pending counterclaims and all related
counterclaims that may be asserted in the future, all
appeals in respect of such litigation and all corporate
work, if any, directly related to the foregoing (together,
the "SCO Litigation")."

NO NEW LITIGATION for BSF.

[ Reply to This | # ]

SCO-Boies Fee Agreement and SCO Corrects Some SEC Filings
Authored by: Anonymous on Thursday, November 04 2004 @ 07:03 PM EST
Seems to me that this is generally good for "the Good Guys", since
Boies et al no longer gets hourly fees, etc, and their fees are set regardless
of what happens, except for any "winnings". So unless there is a clear
and easy path to win, there will be much less motivation on the part of Boies et
al to do much of anything. Indeed, the more they do, the more their fees are
diluted by time/effort spent. They will of course, do what they need to, but it
will no longer be of interest to them to put everything they've got into it,
time/effort-wise (unless a clear win is in sight).

[ Reply to This | # ]

What about IBM's attorney fees?
Authored by: MattZN on Thursday, November 04 2004 @ 07:04 PM EST
What about when IBM decides that SCO owes them attorney fees, when SCO loses? Doesn't that occur before the appeal? It seems to me that that could amount to nearly as much as SCO is paying to their attorneys.

-Matt

[ Reply to This | # ]

So that would be 15 lawyers at $200/hour
Authored by: Anonymous on Thursday, November 04 2004 @ 07:07 PM EST

The contract seems reasonable to me for carrying out the IBM case, maybe a bit
lite to carry both IBM and Novell.

So they want to get paid in cash and have a contingency sweetener. What else is
new?

[ Reply to This | # ]

Wow...
Authored by: Anonymous on Thursday, November 04 2004 @ 07:08 PM EST
I heard a saying once: "Start a pre-paid cafeteria and watch the sandwiches get smaller." I can see the temptation here for Boies to do just that: To put less effort and less hours into the case, and as a result to produce lesser quality work.

I also see another temptation. Two opposing temptations, actually. Either to finish the case in December 2005, or, alternately, to delay as much as possible and do as little as possible until then (no matter how much of a mess that makes of the case), so that the remainder of the case isn't covered by this agreement and requires even more money.

And I think the line about SCO's responsibility to manage its cash flow is interesting. Sounds like Boies suspects that SCO may not have enough money to make the payments all the way to December 2005 unless their (non-litigation) business stops losing money.

Which brings up the logical next question: Who's keeping track of how much money SCO has in the bank? Adjusted for this, where does it leave them? Inquiring minds want to know...

MSS

[ Reply to This | # ]

I fail to understand...
Authored by: _Arthur on Thursday, November 04 2004 @ 07:25 PM EST
Why BS&F is willing to absorb ALL the costs of SCO litigation,
for $2M/Qarter, when current costs are $6M/Quarter ???

I seem to recall that the Discovery phase is much less expensive than the Trial

phase.

Maybe BS&G has a plan to Stall the Novell case, as the Autozone and Red Hat

cases are currently stayed/stalled.
The Daimler case is dead and buried. or so BS&F hopes.

IBM can make the SCO case more expensive at will, by launching new PSJs, or
nuisance Motions, like SCO's.

The deal is silent on who will pay for Appeal, but Darl wasn't seriously
thinking on losing the case, or was he ?

_Arthur

[ Reply to This | # ]

Stock price
Authored by: Anonymous on Thursday, November 04 2004 @ 07:30 PM EST
The Yahoo Finance site has the time "3:15pm" for this announcement. Look what happened to the sto ck price right at that time. Well, as others have said, this is just noise (dead cat bounce) on the down-sloping curve.

[ Reply to This | # ]

SCO-Boies Fee Agreement and SCO Corrects Some SEC Filings
Authored by: Carson on Thursday, November 04 2004 @ 07:37 PM EST
This might seem a bit cynical but I noticed that the quality of Boies and Co.
increased while they were negotiating this. All SCO wanted was a capped legal
costs and contingences in writing, so they can trance about saying that there
lawyers believe in them. Boies on the other hand gets fix moneys and can reduce
the amount and quality of work they do. Win Win.

[ Reply to This | # ]

Kevin McBride
Authored by: tangomike on Thursday, November 04 2004 @ 07:48 PM EST
Hmmm. Haven't heard much of Kevin since last December. I thought I read
somewhere he'd gone off to California. Apparently he's still acting in some
capacity.

Why wouldn't TSCOG's in house counsel sign this?


---
The SCO Group's secret project to develop Artificial Stupidity has obviously
succeeded!

[ Reply to This | # ]

SCO-Boies Fee Agreement
Authored by: webster on Thursday, November 04 2004 @ 07:50 PM EST
Legal fees paid to date (LTD) will be credited toward any contingency. That
makes the contingency profit level three times the LTD. So presuming the
lawyers grind away to a $35 million fee, they won't get the gravy unless they
win/settle for more than $105 million.

And what if SCO gets spanked for stonewalling on code and losing the PSJ on
copyright? If IBM is awarded legal fees, what does that do to their plans?
Would SCO have to turn over some of that money we know they have for BSF?

---
webster

[ Reply to This | # ]

But what have they done for all that money???
Authored by: Anonymous on Thursday, November 04 2004 @ 07:51 PM EST
All those millions of dollars- what does SCO have to show for it,
besides long, windy, confusing, error-riding reams of motions and
filings?

[ Reply to This | # ]

What about all the other lawyers?
Authored by: Jude on Thursday, November 04 2004 @ 07:56 PM EST
We've seen a *lot* of lawyers' names on the SCO's filings, and many of them are
from other law firms. How are those lawyers getting paid? Are they Boies
subcontractors that get paid out of Boies' share, or are they also billing SCO?

$2 million in legal fess per quarter might not be anywhere near SCO's actual
burn rate.

[ Reply to This | # ]

SCO and BSF can not add either
Authored by: Anonymous on Thursday, November 04 2004 @ 08:08 PM EST
The SCO Grouping has a serious error in it.

I don't think SCO and BSF can add.

Here is why....

Do now to BSF $4,616,599.52
Do now to BSF + another $7,956,000.00
1st Q. pay due 1/9/2004 $2,000,000.00

Total $14,572.599.00

Section 1.01 of the sec filing says it is paying $12.6 million dollars. What
happen to the $2 miilion SCO owes BSF on 1 September 2004.

These guys can not do anything right.

[ Reply to This | # ]

So how much money do they have left?
Authored by: Anonymous on Thursday, November 04 2004 @ 08:30 PM EST

[From Yahoo Finance post by mersenne137]

July 30 Cash_________________$43,027
Sept 28 down payment__________(1,783)
Initial payment_______________(12,600)
Expense escrow_______________(5,000)

=====================================

Balance_____________________23,644
First Q Installment_____________(2,000)
2Q current liabilty______________(4,000).. est of 10.4MM-6.4MM)
======================================
Net November 2004 Cash______$17,644

2005 installments_____________(10,000)
Cash available for operations____$7,644

Any additional costs (eg restructuing from layoffs, loss on operations, etc)
would reduce free cash. SCOX was, however, close to cash flow neutral on UNIX
operations in 2Q.

2Q current liability had increased from previous quarters, booked 10MM this
represents unpaid legal bills, etc. Accrued compensation (3MM) which is a normal
roll over expense is not included. I assume a residual portion of the current
liability must be

[ Reply to This | # ]

A coincidence?
Authored by: Anonymous on Thursday, November 04 2004 @ 09:16 PM EST
The agreement letter mentions $1,783,400.48 paid [to Boies] on September 28, 2004

It is interesting to note that Edward Normand and Sean Eskovitz were added to TSCOG's legal team immedietly thereafter.

Following the debacle at the September 15 hearing, TSCOG was pretty desperate to get some improvement in their legal representation. At the same time, the lawyers were keen to start getting paid. It is at least a possible hypothesis that the above payment and beefed up legal representation are related.

[ Reply to This | # ]

Their optimism is so sweet...
Authored by: raynfala on Thursday, November 04 2004 @ 09:33 PM EST
I just had to laugh when I saw this part:
• 33% of any aggregate recovery amounts received up to $350 million;

• plus 25% of any aggregate recovery amounts above $350 million but less than or equal to $700 million;

• plus 20% of any aggregate recovery amounts in excess of $700 million

I think they could've stopped with just the first one... and struct off a digit or two from the dollar figure to save on toner.

$350 million? Please! If they don't end up paying for IBM's legal expenses, they'll have to consider themselves very fortunate!

As always, just another person's opinion. So there.

--Raynfala

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SCO-Boies Fee Agreement and SCO Corrects Some SEC Filings
Authored by: pitr256 on Thursday, November 04 2004 @ 09:49 PM EST
What I don't seem to understand and maybe it's cause I'm not a lawyer, but what
exactly have they got for the $12.5 Million dollars so far?

The stock price has tanked, they're the laughing stock of the entire industry,
they've lost one case, they're lossing every other case -- even the ones on hold
-- and even the most evil and vile hegemony of Microsoft wont have anything to
do with them.

Where did the $12.5 million get spent? Did it go straight to the lawyers pockets
and then poof! nothing?

I guess because IANAL, I don't understand how you can rack up 12.5 million
dollars of legal fees in a year and a half.

365 + 182.5 = 548 days
24 hr X 548 = 13152 hours
12,500,000 / 13152 = $950.45 an hour if they worked every single hour since the
day they started.

Sheesh... I need to go to freaking law school. Nah, lawyers suck.

[ Reply to This | # ]

Click the I Agree Button!
Authored by: kevinsnotalawyer on Thursday, November 04 2004 @ 09:55 PM EST
As I read this, my eyes started glazing over, and before I thought about it, I
was scrolling down, looking for the "I Agree" button!

It sounds too much like a license agreement for me to get all the way through
it. In a word--torturous.

---
Kevin

"When I say something, I put my name next to it." -- Anonymous

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SCO-Boies Fee Agreement and SCO Corrects Some SEC Filings
Authored by: blacklight on Friday, November 05 2004 @ 12:25 AM EST
"In the unlikely [my italics] event that any dispute arises between the parties in connection with the terms of this engagement letter, the parties agree to submit to arbitration in accordance with the rules of American Arbitration Association in a mutually agreed upon venue"

On one hand, I'd say that Boies should know better than to assume "unlikely" and to let SCOG hold Boies hostage with that "mutually agreed upon venue" clause. On the other hand, the lawyers are definitely holding SCOG by the short hairs: and if at some point in the future, the lawyers want that agreement renegotiated, that agreement will be renegotiated.

[ Reply to This | # ]

Total legal fees to date
Authored by: Anonymous on Friday, November 05 2004 @ 12:49 AM EST
I would like to clarify one point that I think has been overlooked by many of
the posters here.

All the legal fees referred to in this latest engagement letter cover ONLY
outstanding unpaid legal fees and expenses as of 31st August 2004, plus
additional fees incurred thereafter. TSCOG had, prior to 31st August 2004,
actually paid some legal costs. (I am too lazy to go back and count it up, and
do not trust my memory, but it was quite substantial.) It is not relevant to
their current fiscal situation, but is important to remember when trying to
calculate the total cost of the litigation to TSCOG.

[ Reply to This | # ]

Don't get it...
Authored by: Anonymous on Friday, November 05 2004 @ 01:09 AM EST
Why on earth are they spending all this money? It is already clear they will
lose on every single count of this lawsuit. I mean, it's pretty hard to win with
zero evidence, 99% of witnesses being on IBM's side and people here at Groklow
pulling the remains of their case to bits.

Darl?

[ Reply to This | # ]

Did SCO get a deal? Firet pass was for 30M not 12M
Authored by: Anonymous on Friday, November 05 2004 @ 01:46 AM EST
Do I corretly recall the first draft of this agrement was for 30M?

[ Reply to This | # ]

Boies works for free after Q1 2005
Authored by: Anonymous on Friday, November 05 2004 @ 01:55 AM EST
Asa I read the contract, after Q1 2005 Boies works for free. Boise agreed to
handle these including all appeals.
On these suits anyway.
If SCO sues any other endusers, they pay more.

[ Reply to This | # ]

SCO-Boies Fee Agreement and SCO Corrects Some SEC Filings
Authored by: Greebo on Friday, November 05 2004 @ 02:18 AM EST
I am not a Lawyer, and i'm also not an Accountant, so this letter is a bit confusing to me.

However, like most of the people who have commented so far, i am amazed at what SCO have got for their money so far, and how much cash Lawyers seem to suck up.

It's been pointed out before that a lot of SCO filings have errors. It also been pointed out that there are now a *lot* of lawyers working for SCO. Why?

What are they all Doing?

To my mind this is why a lot of people despise Lawyers. Yes, the law is complicated, and you need someone to unravel it for you, but who complicates it in the first place? Lawyers?

I've mentioned it before, but if Lawyers worked on the same payment basis as the rest of us (fixed wage, work until the job is done), and at similar rates, then we might see some of these nuisance lawsuits disappear.

Greebo

---
PJ has permission to use my posts for commercial use.

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Small error(?) in agreement
Authored by: Anonymous on Friday, November 05 2004 @ 05:21 AM EST
SCO must also pay one or more contingency fees upon any amount it [receives] or its stockholders may receive as a recovery from the SCO Litigation, intellectual property licensing or from a sale of the company.

Does that mean that whenever I buy SCOX shares from SCOX itself, the lawyers get 33% of the capital raised?

[ Reply to This | # ]

  • No error - Authored by: jdg on Friday, November 05 2004 @ 11:43 AM EST
"Licencing Fees"?
Authored by: Anonymous on Friday, November 05 2004 @ 08:37 AM EST
SCO must also pay one or more contingency fees upon any amount it or its stockholders may receive as a recovery from the SCO Litigation, intellectual property licensing or from a sale of the company.

Does SCO now owe 33% of the M$ FUD money?

(And, is this on top of the 95% they owe Novell?)

[ Reply to This | # ]

A world gone mad
Authored by: Anonymous on Friday, November 05 2004 @ 08:55 AM EST
First the investment bankers told SCOX to drop their software business and
concentrate on the lawsuits.

Now the lawyers are telling SCOX to concentrate on selling software.

I wonder if SCOX is noticing that the guys who know the lawsuit better than
anybody, their legal team, is telling them that their best of hope of paying
their legal bills is by selling software.

bkd

[ Reply to This | # ]

SCO-Boies Pay-In-Advance Agreement
Authored by: marbux on Friday, November 05 2004 @ 12:02 PM EST
1) If The SCO Group runs out of money and cannot make the payments for it's legal fees, what might happen?
A client's failure to pay attorney fees gives the law firm grounds to withdraw from further representation, although they are required to obtain permission from the court to do so. Such applications are ordinarily approved, in fact so perfunctorily often that many lawyers simply file a notice of withdrawal rather than a motion for permission to withdraw.

Should the firm withdraw, in most states the firm is entitled to retain the client's files under what's called an "attorney's retaining lien" until the unpaid fees are received. (Some states do not allow retaining liens, e.g., California.) The firm is also able to file what's called an "attorney lien" on any eventual recovery the client might obtain using other representation, blocking all counsel from being paid a share of the recovery until the attorney lien is resolved. In such situations, the courts will normally allocate the recovery according to the law firms' various uncompensated contributions to the recovery, what the court's refer to as suits in "quantum meruit."

Should SCO wind up unable to make its quarterly payments, I'd expect all firms that have a contingent interest in the outcome to reevaluate their situations in light of the breach of contract, consider the likelihood of success and the likely amount of the firm's recovery under both scenarios of continued and ending further representation of the client, and decide what to do at that point. Firms (if any) that have no contingent interest in the outcome and working purely for an hourly or set rate would almost certainly withdraw from further representation of SCO.

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What does SCOX get for $31 million? What did they get for $12 Million?
Authored by: BubbaCode on Friday, November 05 2004 @ 12:04 PM EST
Is it just me or does anyone else see how this is such a BAD deal for SCOX?

So far they have spent $12 Million and outside of the fact that they have not
gotten any return yet out their "investment", what did they get for
$12 Million?

Boies and the "Law Firms" have filed a some paper, shown up in court a
few times, and sent a few threaten letters. Over the last year they have had
five cases (Novell, IBM, Redhat, AutoZone, DC) now, four of which are basically
on hold after some breif action.

If you look at both the quanity and especially the quality of the lawyering
here, they are NOT worth $12 Million. Did they do $12 Million worth of work
here?

Divided $12M court apperances (which were NOT done by any of the top guys) and
you get around $1 M per hearing.

And now they are going to let them go all they up to $31 M?!!?

Think about this. What could have SCOX done with $31M in R&D investment
instead of laying off Engineers?

We should look at the Groklaw archives and do a little math like how much they
charged per hearing or per motion.

[ Reply to This | # ]

Two kinds of contingency, and two comments about them
Authored by: nartreb on Friday, November 05 2004 @ 12:35 PM EST
1) It may look like both SCO and Boies are still in dreamland when they talk
about litigation recoveries "in excess of $700 million". That part of
the contract is good PR for SCO, of course.
What's more interesting is that an identically-structured contingency fee
(payable immediately) kicks in if SCO undergoes a "change in control"
- ie, gets bought out or liquidated. In this case, the contingency fee is
calculated as a percentage of the "transaction recovery" ie, the total
cash value of SCO. I believe this also applies if SCO declares bankruptcy. I'm
trying to figure out who that benefits. If SCO is fearing a takeover attempt
(say, by IBM), it makes a good "poison pill." More probably, though,
this is a way for Boeis to hedge its bets and boost its upside. They know that
if Darl were to decide to give up on the IBM lawsuit he'd probably have to sell
the company - in which case Boies takes 30% of whatever it's worth. They also
know that in the event SCO wins the lawsuit, some major stockholders will
probably want to take their winnings and cash out of the company. Notice that
the contract is worded so that the two contingencies are not mutually exclusive
- Boies gets BOTH a percentage of any legal recovery AND a percentage of the
company.
2) Whats REALLY interesting is that the "transaction contingency"
doesn't have any expiration date. In theory, if SCO changes hands EVER, Boies
& co get up to 30%. (A judge might find otherwise based on the "intent
of the parties" as evidenced by the phrase "in connection the SCO
Litigation" elsewhere in the contract. Still, it's not clear for how long
after the litigation ends the change-of-control clause would be in force.) So
what happens after December 2005? Boeis still has the chance of earning a
contingency fee on a legal settlement, but will no longer be paid quarterly for
its time (unless they get a new agreement by then).
My guess is, when December 2005 rolls around, Boeis finally makes an honest
evaluation of whether their suit can actually succeed (or whether IBM would be
willing to pay them to go away). I'm hopeful that that value is zero. So Boeis
may give up the lawsuit at that point. Or they may try to continue to drag it
out in the hope that a "change of control" will occur while the stock
is still boosted by hopes of a legal victory. Only three things can end this
saga - swift judicial action (unlikely), SCO running out of cash and going
broke, or people learning the facts of the case (thanks to Groklaw) and selling
off their SCO stock.

[ Reply to This | # ]

Sun and No New Litigation?
Authored by: Anonymous on Friday, November 05 2004 @ 03:11 PM EST
What, if any, effect will this agreement have on SCO's threatenings toward Sun

and their allegeded desire to release Solaris 10 as open source?

[ Reply to This | # ]

M$ fud on steroids
Authored by: Anonymous on Friday, November 05 2004 @ 03:37 PM EST
Reading some M$ fud story:

"HP's indemnification covers only claims brought by SCO. HP uses its
indemnification provision to lock customers into buying both HP hardware and HP
support agreements. Plus, if you modify one line of your Linux code, you waive
your entire coverage."

HAHAHA, this one got me rolling on the floor laughing. If you modify one link of
your Windows code, you GO INTO PRISON (if you are just a user, that's it).

[ Reply to This | # ]

SCO-Boies Fee Agreement and SCO Corrects Some SEC Filings
Authored by: marbux on Friday, November 05 2004 @ 04:58 PM EST
From a plaintiffs' lawyer perspective, the Boies firm's deal looks very
attractive. I'll try to explain, but it's going to require a deeper
understanding of the dynamics of big bucks litigation than we've discussed
before.

First, you have to recognize that most corporate defendants aren't the
real parties in interest when they are sued. It's their insurance company or
companies who will be stuck with the bill if they lose the case, not the insured
company, except to the extent judgments exceed the policy limits. Insurance
companies pay the expense of defending cases, and defense lawyers have a
somewhat divided loyalty to the client and the insurance company that's paying
their fees. The lawsuit proceeds in the identity of the defendant, but it's
mostly the insurance company's neck on the line, not the defendant's.

The IBM
case is somewhat unusual because IBM has raised counterclaims. Normally,
insurance companies do not cover the expense of pursuing counterclaims and the
defendant company must fund that portion of a lawsuit. That suggests that IBM
and its insurers have probably reached an agreement where the insurers defend
the SCO lawsuit while IBM funds pursuit of the counterclaims. So IBM's expense
is not nearly so large as many might think upon first impression. And the
defense in the AZ, DC, and Novell cases is probably being provided entirely at
the insurers' expense. RedHat, as a plaintiff, is almost certainly paying for
its own prosecution of its case.

Insurance companies do not approach
litigation from the same standpoint as their insureds. While a defendant company
may have motives to pursue cases, insurance companies approach litigation with
an eye toward minimizing expense and risk. They may also have an interest in not
developing a reputation as push-overs who settle easily, but if they're up
against a law firm with a reputation for winning big cases, they're generally
inclined to settle if they can cut their exposure that way. So they're looking
at a calculus that balances the likelihood of a defendant's loss against
financial exposure, i.e., the policy limits plus the cost of defense. In this
case, they're looking at a law firm that put the anti-trust hurt on Microsoft,
which was salvaged only by a change in presidential administration, so Boies has
enough reputation to cause the other side to do some soul-searching about
potential exposure.

Insurance companies can seek to cut their exposure through
settlements for less than the policy limits. If they can negotiate a settlement
offer, they can then turn to the insured defendant company and say, "we want to
accept this offer. Do you agree?" If the insured company says no, the insurance
company can tender the amount of the negotiated settlement to the plaintiff and
walk away, free from further exposure. The formerly insured company then has to
pay for the remainder of its own defense and risk having to pay a judgment that
may be far more expensive than the amount tendered by the insurance company,
even if it's less than the original policy limits. (Any judgment would, however,
be reduced by the amount already paid by the insurance company.) In other words,
the defendant company has to go naked from that point on; it has to assume the
entire expense and risk of the litigation.

Insurance companies also have the
option even without a settlement of paying the plaintiff the policy limits and
walking away from the litigation, again leaving the defendant to pay for the
expense of litigation. Any amount recovered by the plaintiffs will be reduced by
the amount already received from the insurance company, but the defendant
company is liable for any excess.

The flip side of the insurance coin is that
if an insured company wants to accept a settlement offer less than the policy
limits but the insurance company refuses to settle, then the insurance company
is liable for the entire amount of any judgment, regardless of policy
limits.

The sum of such factors is that corporate defendants and their insurers
both have strong incentives to settle cases where the financial exposure is very
large. At the same time, it's usually not smart for defendants or their insurers
to settle a case before the likelihood of success and likely amount of damages
are more clear, so big bucks cases often don't settle until the last moment, or
even during an appeal.

Now let's look at the plaintiff's side of the courtroom.
The expense of litigation in big bucks cases is ordinarily borne by the
plaintiff's law firm in exchange for a contingent interest in a portion of the
client's eventual recovery, if any. Insurance companies rarely are paying for
any portion of the case. Successful plaintiff firms normally have a number of
clients pursuing different cases at any given time. In each case, the firm has a
contingent interest in the client's potential recovery of damages. Think of each
of those cases as the firm's investment portfolio.

Periodically, the firm will
review its portfolio using an equation for each case that multiplies its
perceived percentage likelihood of success times the best estimate of the firm's
recovery if they win, less the estimated cost to the firm of pursuing the case
to a conclusion. (Normally, this also includes a separate calculation of the
firm's likely weighted recovery if the case is referred to another law firm with
the original firm retaining a contingent interest as a referral fee, most
commonly 30 per cent of the second firm's recovery.) As either the likelihood of
success or estimated recovery change during the case's development, the estimate
of a given case's relative value to the portfolio will change. As part of the
periodic review, the managing partners will consult with the lawyer responsible
for each case to update the estimates.

At the same time, the firm has a
relatively steady influx of new potential clients, each of which has the
equation applied, so the firm can decide whether it's economically advantageous
to refer existing clients to other firms in order to take on the new
clients.

Now assume the firm also has the option to take on a client under a
retainer agreement requiring the client to pay a reduced hourly rate or a flat
fee for the representation, plus a contingent interest for the firm in the
client's potential recovery of damages. The estimated cost of pursuing the claim
to resolution suddenly is no longer a factor, i.e., all risk is eliminated, so
the equation becomes even simpler and the weighted estimated recovery value
mushrooms up as a result.

Add to your view the fact that most cases are in fact
settled rather than litigated to a conclusion. Even a small chance of a
resounding victory can be too much risk for defendants or their insurers who
actually fund and control the defense in most cases, providing the defense team
is not able to get rid of the case with pre-trial motions.

From the Boies
firm's point of view, the SCO litigation is virtually risk free compared to
contingency cases where they aren't paid by the client. The Boies firm is being
paid by SCO. Not as much as the firm might get if it was a pure contingency
arrangement, but enough to cover the law firm's expenses of the litigation,
which is the firm's only risk. There's virtually nothing but upside for the
Boies firm, so even a comparatively small recovery represents nothing but gain.
The odds are fairly good that DM's insurers will offer some amount to settle,
and it's not unlikely that even AZ's insurers will offer a nuisance settlement
amount. (The likely cost of defense probably isn't warranted if the case can be
settled for less.)

SCO has a better shot at Novell, and Novell's insurers may
well be inclined to settle if they can do so for substantially less than the
policy limits, particularly if SCO survives the pending summary judgment motion
and structures a settlement offer in a way that avoids Novell having to transfer
copyrights to SCO, which as a non-monetary item would probably allow Novell to
insist that its insurers continue defending it. (Such a settlement offer might
include SCO offering to formally assign to Novell all interest and claims it has
in Unix in return for money from Novell's insurers. And note that the Boies firm
has suddenly acquired an interest in SCO's IP.)

In the IBM case, much depends
on whether SCO's case can survive until trial. If SCO then still has any claims
left that could result in a big bucks award, IBM's insurers will probably want
to try to settle the defense case. The counterclaims really aren't a factor in
IBM's insurers' calculations. So it's conceivable that IBM would then be forced
to choose between settlement and going to trial naked of insurance, which might
affect IBM's evaluation of the importance of the counterclaims.

In the RedHat
case, it's likely that SCO's insurers are paying for its defense and retained
the Boies' firm to provide it because of the firm's familiarity with the issues.
So the Boies firm may have another revenue stream there that wouldn't be
addressed in the retainer agreement. But again, SCO and/or its insurers have all
the risk in that case. The Boies firm doesn't share it except to the extent that
it's acquired a secured interest in SCO and its IP through the retainer
agreement.

So the bottom line in the Boies firm's portfolio is that the SCO
litigation still looks like a pretty good deal, now sweetened even further by
secured interests in the company's IP and future ownership itself in addition to
the likelihood of success in the lawsuits. The way I read the retainer, even if
SCO's goes belly-up, the Boies firm would still have the status of a secured
creditor -- rather than of a stockholder under the old retainer agreement --
which is a far better place to be in bankruptcy proceedings. Stockholders are
the very last priority in bankruptcy, who are only entitled to any value
remaining after all creditors are paid. So the new retainer agreement gives the
Boies firm a much firmer value than the old retainer.

I'm also mindful of what
a hard bargain the Boies firm has driven. There's no longer any question that
SCO's board of directors have bet the company on this litigation. Talk about a
poison pill! Combined with SCO's slide in sales, SCOX is now virtually a pure
play in SCO's potential revenues from the lawsuits.

You're not seeing the true
dynamics of litigation if you don't have an eye on the insurance companies'
interests and the differing motivations of each side's lawyers. That's one
mistake successful plaintiffs' lawyers rarely make. And the Rules of Procedure
expressly provide that defendants are required to disclose what insurance
coverage they have, so that settlement negotiations are conducted with full
awareness by both sides of what insurance coverage is actually available to pay
a settlement or judgment. Fed. R. Civ. P. 26(a)(1)(D).

[ Reply to This | # ]

Will Bush's Victory Spell Bad News for Linux?
Authored by: Anonymous on Friday, November 05 2004 @ 05:25 PM EST
Just wondering what the consensus is regarding the influence the government
might have in the various lawsuits currently going on against Linux. If Gates
calls Bush up to cash in on Microsoft's heavy support for the Republican party,
can he influence the outcome of any of these cases somehow?

[ Reply to This | # ]

SCO-Boies Fee Agreement and SCO Corrects Some SEC Filings
Authored by: geoff lane on Friday, November 05 2004 @ 05:29 PM EST
At what point does Boies and Co become liable in a legal case because they own or control the actions of the company they are representing?

The agreement between SCOv2 and Boies ties them together and even seems to give Boies some control over the actions of the company. If Boies&Co is to benefit from a successful case isn't IBM going to argue that they should suffer from an unsuccessful case? Especially as the relationship between Boies and SCOv2 is now so complex.

---

[ Reply to This | # ]

OT: Microsoft XML formats
Authored by: Anonymous on Friday, November 05 2004 @ 06:05 PM EST
Microsoft pledged to keep its XML formats royalty-free forever. This is in reponse to the EU demand that it keep its data formats open. I don't know whether to trust this or not. On the one hand, Microsoft always cheats. On the other, it seems the EU has so much muscle and determination that it really might be forcing Microsoft to play it honest.

link

[ Reply to This | # ]

If you look for it -- You can get to $31 million
Authored by: Anonymous on Friday, November 05 2004 @ 09:24 PM EST
In the last TSCOG conference call Olson said that out of the $43 million cash
they had left $31 million went to the lawyers and $12 million stayed in the
business.

Here is how you get to $31 million for the lawyers

Fees thru 8/31 = $6,400,000
More fees paid on signing = $7,956,000
Quarterly fees to be paid = $12,000,000
Escrow for experts & expenses = $5,000,000

Grand Total= $31,356,000

So the question is how long will $12 million last if it's only used to pay
regular business expenses?? TSCOG may be able to limp along for three to five
years on $12 million.

[ Reply to This | # ]

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