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Boies Schiller Asks Bankruptcy Court To Let It Be SCO's Special Litigation Counsel
Friday, October 12 2007 @ 06:34 PM EDT

The formal notice [PDF] that SCO wants Boies Schiller to be its special litigation counsel has now been filed. It wishes to be appointed to handle going forward: the arbitration in Switzerland, SCO v. IBM, SCO v. Novell, Red Hat v. SCO, SCO v. Autozone, SCO v. DaimlerChrysler, and Wayne R. Gray v. Novell, Inc., The SCO Group, Inc. and X/Open Company - that's another Daniel Wallace-type of skirmish only about a disputed domain name.

What a list. So, SCO, how's it working out for you, suing Linux? May it be equally successful for any patrons and imitators.

Any objections must be filed and received by the Bankruptcy Court by 4 PM on October 29th. If anyone objects to Boies Schiller's appointment, the matter will be added to the hearing agenda for November 6. It's SCO's funeral, and if they are happy, why would anyone else care if Boies Schiller represents them? Well, there might be creditors, like Novell for example, or the US Trustee even, who notice that SCO's money has been funneling down a legal rat hole, and they might not want such a pricey firm to continue. Boies Schiller says it's working for contingency, expenses, and in a couple of matters, such as in the arbitration, for 50% of its regular fee, although it doesn't say what that regular fee might be. And of course SCO still has to cover the firm's expenses. Like flying to Switzerland. So when do you say, enough is enough? A trustee might think that since SCO also is paying a Swiss firm to represent it in the arbitration, perhaps that might be enough for a firm filing for Chapter 11 bankruptcy.

But then, that's just me. I'm thrifty by nature. For all I know no one will object, and this will be rubber-stamped. But Stuart Singer, in his declaration in support [PDF], reveals that in the last year prior to SCO filing for bankruptcy, SCO has paid them $887,523.55. There might be some who would view that as Novell's money, if SCO claims that it already spent all the Sun and Microsoft agreement monies from 2003. I can imagine Novell wanting it back.

And don't forget that in Darl's Declaration in Support of First Day Pleading, he stated that SCO wanted BSF to continue to represent SCO in all the usual litigation, but he also listed that they would handle "adversary proceedings" which is a term I associate with bankruptcy proceedings. Some of us, watching the SCO saga, may have concluded that Boies Schiller has managed to drag out this litigation longer than another law firm might have, and it could be that some creditors would prefer that not happen in the bankruptcy. Just saying. The day SCO filed for Chapter 11 protection, it listed a debt to BSF of another $287,256.39, which Singer indicates is owed for expenses. If the firm gets what it says is owed, that's $1,174,779.94. A million dollars is a lot of money when you've failed across the board, as SCO pretty much has. I know. There's an appeal. Well. Maybe. Someday. But even with that, some might argue that at a certain point, you need to stop the bleeding and at least get into a reduced spending mode. And the thing about bankruptcy is, you can't control how you spend your money any more. You have to persuade the court that it should be spent the way you want it to be. And that is what Mr. Singer's declaration is trying to achieve.

Here are all the new documents filed today:

114 - Filed: 10/10/2007
Entered: 10/12/2007 Notice of Appearance(B)
Docket Text: Notice of Appearance & Request for Service Filed by Alan P. Petrofsky. (TAS, )

115 - Filed & Entered: 10/12/2007
Application to Employ (B)
(1) Notice # (2) Declaration of Stuart H. Singer # (3) Exhibit A to Declaration of Stuart H. Singer # (4) Proposed Form of Order # (5) Certificate of Service and Service List) (O'Neill, James)

First, we learn from the Singer Declaration, the arrangement that SCO and Boies Schiller signed revising the agreement in October of 2004, attached as Exhibit A, meant that from then on Boies Schiller paid the other lawyers, like Kevin McBride and Berger Silverman. SCO paid expenses. In the arbitration, Boies Schiller agreed to represent SCO at half the normal rate but all expenses were to be covered by SCO, including paying the Swiss lawyers. But Boies Schiller would like a change in the terms, a change not noted in the Notice but only in the Declaration, paragraph 7:

7. BSF has consented to continue to provide such services to the Debtors on the terms set forth in the Engagement Agreement (with one modification noted below) with respect to the matters covered thereunder, and on the same basis it had represented Debtor pre-petition with respect to the SuSE Arbitration and Gray Litigation. For example, under the contingency fee provisions of the Engagement Agreement, Debtors would pay the Law Firms 33% of any recovery up to $350 million "less all hourly fees paid at any time to the Three Original Firms." BSF has consented to be engaged to continue providing professional services in these matters on the terms set forth in the Engagement Agreement, except as the sole remaining of the three Law Firms continuing to provide servers, it requests that it be entitled to the full contingency fee payable to the Law Firms (except for such amount, approximately 7.5%, to which Kevin McBride currently holds interest).

8. Prior to the Petition Date, BSF paid fees to Hatch, James, and Dodge (Utah local counsel) and Dorsey & Whitney (with respect to intellectual property assistance only), and will continue to be responsible for such fees, for work authorized to be conducted in connection with the SCO Litigation. Upon disclosure and any necessary court approval, BSF may seek to share part of its contingency interest with the other firms that it is required to compensate under the terms of the Engagement Agreement.

Is that clear to you? Will they share or won't they? I take it they won't unless they come back to the court and get an order. Good luck, other law firms. To hear BSF tell it, it has no conflicts representing SCO:

9. BSF represents no interest adverse to the Debtors or their estates with respect to the matters upon which BSF is to be employed. BSF is currently representing the Debtors with respect to each of these matters, and there has been no suggestion that BSF represents any interests adverse to the Debtors in connection with these matters. BSF is a creditor with respect to certain amounts for fees and expenses outstanding at the time SCO filed its Chapter 11 petition. In the one-year preceding the Petition Date, according to BSF records, BSF has received payments from SCO in the amount of $887,523.55.

The other filing is apparently a pro se thing of some kind from a security holder. Here's the first rule it invokes, and the second. I'm not aware of any security holder committee having been set up yet, but that doesn't mean it hasn't happened and I just don't know about it.


  


Boies Schiller Asks Bankruptcy Court To Let It Be SCO's Special Litigation Counsel | 186 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Boies Schiller Asks Bankruptcy Court To Let It Be SCO's Special Litigation Counsel
Authored by: Anonymous on Friday, October 12 2007 @ 06:42 PM EDT
In for a penny, in for a pound!

[ Reply to This | # ]

Corrections
Authored by: Anonymous on Friday, October 12 2007 @ 06:49 PM EDT
Please give a hint in your title. Thanks.

---
--Bill P, not a lawyer. Question the answers, especially if I give some.

[ Reply to This | # ]

Off Topic
Authored by: Anonymous on Friday, October 12 2007 @ 06:50 PM EDT
As usual.

---
--Bill P, not a lawyer. Question the answers, especially if I give some.

[ Reply to This | # ]

so who owes SCO some money?
Authored by: Alan Bell on Friday, October 12 2007 @ 06:50 PM EDT
we have had a lot of fun looking at the list of entities SCO has not paid, but
surely there should be a corresponding list of SCO's debtors as well as their
creditors? It might be instructive to find out who SCO think still owes them
money, and what the debtors think their position is. If there are people who are
just sitting with unpaid invoices in aged debtors the creditors committee might
need to do something about collecting the debt, which might bring to a head some
disputed payments.

[ Reply to This | # ]

[NP] News Picks Discussion
Authored by: mupi on Friday, October 12 2007 @ 06:50 PM EDT
News Picks discussion here...

[ Reply to This | # ]

sudden bubble in stock price...
Authored by: eggplant37 on Friday, October 12 2007 @ 07:00 PM EDT
So, is this story the explanation of the sudden 40% increase in stock price, from $0.18 at open to $0.30 this morning? See Yahoo!'s SCOX board for more info.

[ Reply to This | # ]

Boies Schiller Asks Bankruptcy Court To Let It Be SCO's Special Litigation Counsel
Authored by: mupi on Friday, October 12 2007 @ 07:06 PM EDT
"reveals that from the moment SCO started its legal anschluss against
Linux, SCO has paid them $887,523.55"

According to point 9 quoted, the 887,523.55 is only the amount paid in the last
year. So that amount may well be higher if you go further back than one year;
and I think that the amount beyond one year is pretty safe, relatively speaking,
at least from the point of view of the bankruptcy estate...

I am going to submit this as a correction also...

[ Reply to This | # ]

Did I read that right?
Authored by: Anonymous on Friday, October 12 2007 @ 07:08 PM EDT
Has BSF been paying the other law firms, while their own fees are capped? Does
that mean that BSF is not only not getting paid for additional work, but
actually losing money as the case drags on and the other firms do more work?

Or are other firms' fees part of BSF's expenses that they do still charge SCO
for?

MSS2

[ Reply to This | # ]

"I can imagine Novell wanting it back. "
Authored by: Anonymous on Friday, October 12 2007 @ 07:08 PM EDT
That was a funny one, PJ.
I can imagine it too.
"Novell wanting it back".
ROFLMAO

[ Reply to This | # ]

The SCO Group, Inc. and X/Open Company
Authored by: Khym Chanur on Friday, October 12 2007 @ 08:57 PM EDT

When did this happen? Searching both Groklaw and the web doesn't give any hits about a domain name dispute.

---
Give a man a match, and he'll be warm for a minute, but set him on fire, and he'll be warm for the rest of his life. (Paraphrased from Terry Pratchett)

[ Reply to This | # ]

You know PJ......
Authored by: Anonymous on Friday, October 12 2007 @ 09:47 PM EDT
I don't know who you used to work for, but, if whoever they
use now is up to your standards,

I *really* don't want them suing me!



Man! I wouldn't be able to get away with anything!

[ Reply to This | # ]

Isn't BSF a stockholder?
Authored by: Anonymous on Saturday, October 13 2007 @ 12:37 AM EDT
I seem to recall that as part of their compensation for taking the case, BSF
acquired a significant amount of stock. Wouldn't that would make them debtor in
equity and hence unqualified to due to conflict of interest as an officer of the
court?

[ Reply to This | # ]

Reopening Fraudulent transactions in bankruptcy
Authored by: Anonymous on Saturday, October 13 2007 @ 01:01 AM EDT
In most jurisdictions, it is possible to reopen and declare as fraudulent
transactions within 2 or 3 years of filing for bankruptcy. Would not the fat
bonuses and thick cheques for legal costs fall within this category?

[ Reply to This | # ]

BK #116 - get it before it's gone!
Authored by: fudisbad on Saturday, October 13 2007 @ 01:05 AM EDT
From the Epiq bankruptcy docket (click on dockets, then click on images for the documents you want to download):

116 10/12/2007 Motion to Authorize to (I) Continue Prepetition Severance Policy Applicable to All Employees and (II) Pay Severance and Accured Benefits to Employees Terminated Postpetition Filed by The SCO Group, Inc.. (Attachments: # (1) Proposed Form of Order) (ONeill, James)

117 10/12/2007 Motion to Shorten Time on Debtors Motion for Authorization to (I) Continue Prepetition Severance Policy Applicable to All Employees and (II) Pay Severance and Accrued Benefits to Employees Terminated Postpetition and to Fix a Hearing Date [Requested Hearing Date: 10/25/07 @ 4:00 p.m at USBC, 824 Market Street, 6th Fl., Courtroom #3][Requested Objection Deadline: 10/22/07 at 4:00 P.M.] (related document(s)[116] ) Filed by The SCO Group, Inc.. (Attachments: # (1) Proposed Form of Order) (ONeill, James)

118 10/12/2007 Motion to Seal (RE: related document(s)[116] Motion to Authorize (B), Motion to Authorize (B)). Documents and Data Subject to Debtors Motion for Authorization to (I) Continue Prepetition Severance Policy Applicable to All Employees and (II) Pay Severance and Accrued Benefits to Employees Terminated Postpetition [Hearing: 10/25/07 @ 4:00 P.M. at USBC, 824 Market Street, 6th Fl., Courtroom #3][Objection Deadline: 10/22/07 @ 4:00 P.M.] Filed by The SCO Group, Inc.. (Attachments: # (1) Proposed Form of Order) (ONeill, James)

119 10/12/2007 Motion to Shorten Time on Debtors Motion to File Under Seal Documents and Data Subject to Debtors Motion for Authorization to (I) Continue Prepetition Severance Policy Applicable to All Employees and (II) Pay Severance and Accrued Benefits to Employees Terminated Postpetition and to Fix a Hearing Date (related document(s)[118] ) Filed by The SCO Group, Inc.. Hearing scheduled for 10/25/2007 at 04:00 PM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 10/22/2007. (Attachments: # (1) Proposed Form of Order) (ONeill, James)

It looks like SCOX(.pk) wants to give Bert Young a big redundancy payout and not tell anyone about it. It also wants to sack 16 employees (that's more than 10% of their workforce).

---
"SCO’s failure to provide code for the methods and concepts it claims were misappropriated is [...] a violation of this court’s orders." - Judge Brooke Wells

[ Reply to This | # ]

DaimlerChrysler
Authored by: jmc on Saturday, October 13 2007 @ 03:02 AM EDT
Do they still regard that suit as live?

Surely they lost that nearly 3 years ago (apart from having to pay D-C's costs
if they started again)?

[ Reply to This | # ]

Boies Schiller Asks Bankruptcy Court To Let It Be SCO's Special Litigation Counsel
Authored by: Ian Al on Saturday, October 13 2007 @ 04:06 AM EDT
A trustee might think that since SCO also is paying a Swiss firm to represent it in the arbitration
Come on PJ. You've already reported SCOG wailing that they are 'between lawyers' in the arbitration at the moment. If you are referring to the SCOG dictionary definition of 'paying' I think you should tell us.

Anyway, have you thought that Novell might be very keen to pay for BS&F to represent SCOG in the arbitration. It's a bit like buying the right result.

---
Regards
Ian Al

Linux: Genuine Advantage

[ Reply to This | # ]

So what happened to the $31 Million SCO paid to B&S?
Authored by: kh on Saturday, October 13 2007 @ 05:01 AM EDT
http://www.gr oklaw.net/article.php?story=20041105143229594

Is that the elephant in the corner?

[ Reply to This | # ]

Conflict of interest?
Authored by: Anonymous on Saturday, October 13 2007 @ 05:16 AM EDT
if BSF is owed or being paid money by SCO for other litigation, (or not being
paid money if fees are capped), or if they are acting on behalf of SCO in some
other, perhaps conflicting, interest with regard to other litigation, isn't that
a conflict of interest?

[ Reply to This | # ]

Boies Schiller Asks Bankruptcy Court To Let It Be SCO's Special Litigation Counsel
Authored by: GriffMG on Saturday, October 13 2007 @ 06:07 AM EDT
Looks to me as SCO has been using a fairly creative method of paying a McBride
in a semi-offbook way.

Could this be called syphoning?

---
Keep B-) ing

[ Reply to This | # ]

Hows it going for you? - Boies Schiller Asks Bankruptcy Court To Let It Be SCO's Special Liti..
Authored by: Anonymous on Saturday, October 13 2007 @ 10:20 AM EDT
Question PJ asks of SCO concerning their litigation.

Question for PJ, regarding the suit of IP Innovation LLC against Red Hat and
Novell.

Just how strong is their case?

It is my understanding, that up until now, everyone IP Innovation LLC has sued,
have settled, without going to court.

My guess is that Red Hat will fight, and not cave.

It appears from reading some of the posts, there may be prior art that will
invalidate the patents. How big is IP Innovation LLC? Is there such a thing as
abuse of the patent system, the same way there is abuse of the Copyright system?
Would Red Hat have the basis for counterclaims that would put IP Innovation LLC
out of business?

[ Reply to This | # ]

BSF is a creditor - Boies Schiller Asks Bankruptcy Court To Let It Be SCO's Special Litiga...
Authored by: Anonymous on Saturday, October 13 2007 @ 10:28 AM EDT
BSF is a creditor to the extent that fees owed to BSF prior to the filing of
bankruptcy and not paid are a credit from BSF to SCO. BSF has to stand in line
with all the other creditors.

In my personal opinion, I should not have a creditor representing me in a
bankruptcy proceeding.

BSF represents no interest adverse to the Debtors or their estates with respect
to the matters upon which BSF is to be employed. BSF is currently representing
the Debtors with respect to each of these matters, and there has been no
suggestion that BSF represents any interests adverse to the Debtors in
connection with these matters. BSF is a creditor with respect to certain amounts
for fees and expenses outstanding at the time SCO filed its Chapter 11 petition.
In the one-year preceding the Petition Date, according to BSF records, BSF has
received payments from SCO in the amount of $887,523.55.

[ Reply to This | # ]

Lets Us All Write A Feature Film Script About SCO + Gates et al
Authored by: Anonymous on Saturday, October 13 2007 @ 10:50 AM EDT
Since this SCO (+ Gates + others?) issue has a lot to do with the world of
collaborative development (FOSS/FLOSS); let "us" write a feature film
script about this whole issue.

First of all "we" would just the develop the basic plot line (and the
sub plots) and the characters that go with the plot. Under the current flow of
events "we" would need to decide whether a comedy is the best way to
structure the script or instead structure the script in the now playing
"Michael Clayton" (evil lawyers, evil corporate rats - doing evil
things).

I am not a Geek!! What the best USABLE way to handle the collaborative online
script writing. A WIKI? Or? Or?

Naturally it will be a docudrama; which means "we" can add as much
fictional material to the script as "we" wish. (Just like DMcB always
does!)

I have all the equipment to shoot and edit "our" production. The
production can be shot in "Dogma 5" style (Google it). I would
volunteer to direct and edit. I assume that "others" would also
volunteer - including the required actors. Maybe even get a "star" to
volunteer for the lead role (Woody Harrelson?).

"Our" docudrama could be shot anywhere. When completed it would be put
into various competitions and then premiered on the web (YouTube or better
place).

It would/could be put under the appropriate "open" license.

[ Reply to This | # ]

Patents on component parts
Authored by: Anonymous on Saturday, October 13 2007 @ 11:17 AM EDT
Isn't there a case before the courts now regarding a company that being sued for
using patented sub components. They are arguing that the manufacturer of the
sub component has already paid the licence fee for the patent and that they
shouldn't have to pay again. Seems this would be similar to the Distro just
packaging components from others.

Couldn't the common carrier rules also apply since the Distros just pass on
others packages?

[ Reply to This | # ]

Fee cap question
Authored by: kh on Saturday, October 13 2007 @ 12:11 PM EDT
Does the fee cap mean that Boies Shiller gets all the $31 Million?

What I mean is: what if their fees don't come to $31 Mill? Do they get to keep
the rest gratis or do they have to give some back? It is theirs outright?

[ Reply to This | # ]

So, SCO, how's it working out for you, suing Linux? May it be equally successful for any patrons
Authored by: Anonymous on Saturday, October 13 2007 @ 07:37 PM EDT
In The Article it asks: "So, SCO, how's it working out for you, suing
Linux? May it be equally successful for any patrons and imitators."

How's it working out for them?

For their execs it worked out very well. They got big cash bonuses.

For their sponsors (microsoft) it worked out very well. It put a cloud over
Linux for years.

I hope the imitators will be *much* less successful - though from the noise
Microsoft's making, I don't think they will be.

[ Reply to This | # ]

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