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SCO Agrees With Itself (Technically with its New Subsidiary Cattleback) to Give Itself Some Bonuses - Updated
Wednesday, November 07 2007 @ 12:24 AM EST

All rise, please. The word fraud has just entered the courtroom. And it's SCO who has first uttered it. Of course, it denies it.

It has filed a document, proposing a settlement with itself (technically with its newborn subsidiary, Cattleback Holdings, born on July 17), regarding a sale of a patent which was transferred to the subsidiary without consideration quite recently, whereby they'd like the court to say it's OK that they did that and let them pay some unnamed employees some bonuses, prepetition don't you know, and the document tells all about why it isn't a fraudulent transfer.

Even if it is another asset sold off that Novell and the other sadsack creditors whom no one in that courtroom in Delaware cares one bit about, I gather, can't get full value from. No bonuses for creditors. What, are you mad? "All gone!" I imagine I hear Mr. Spector tell the court someday soon, "so where's the harm to Novell now?" Shazam! It all got spent on lawyers and financial advisers and now a fair chunk, if SCO gets its way, to the folks who found the buyer for the patent, after great labors for which it must be paid, Ocean Tomo, who call themselves "the leading Intellectual Capital Merchant Banc® firm that specializes in understanding and leveraging Intellectual Property assets." But this article about Intellectual Ventures, started by two ex-Microsoft executives, Edward Jung and Nathan Myhrvold, calls it a patent auctioneer:

Also complementary to Intellectual Ventures' operations is patent auctioneer Ocean Tomo. "An auction is a great way of setting prices. We’ve participated in Ocean Tomo auctions...as buyers and sellers," Jung said.

Small world, isn't it?

Now, SCO is worried that there might be some nitpicky types, like creditors and whatnot, who might argue that "a transfer for no consideration made by a chapter 11 debtor shortly before its entry into chapter 11 should be avoided as a fraudulent transfer." I might think that way myself, now that they mention it. "In lieu of filing a lawsuit against its wholly-owned subsidiary," SCO helpfully suggests, "the Debtor has agreed to the following resolution of the incipient dispute." Um. Agreed with whom? Who is Cattleback? Are there humans there? Other than Darl and his gang of cowboys? His wife? Who?

Here's the deal SCO offers, and I'm sure this was a hard-fought compromise after blazing gun battles with the Cattleback posse:

  • Cattleback gets paid for the patent and pays SCO $570,000, the full amount offered, (and may I inquire the last time a patent was worth that little if it had any value at all?) to SCO, and Cattleback will pay everything that was incurred by the Debtor for the development and marketing of the patent. With what? Did money get transferred to that subsidiary too?
  • SCO must pay Ocean Tomo, the folks that found the unnamed buyer, the balance that it owes them for that laborious task, and the balance they are owed is $60,500. That's the *balance* on a $570,000 deal? What did they get already?
  • SCO says it owes the inventor and unnamed "several employees" a cut, to the tune of $45,000 split between them, whoever they are. They have to pay themselves, unfortunately, since the marketing agreement says so. They are "obligated by the marketing agreement". Those are the breaks. Evidently SCO lost the poker hand, got into this marketing agreement, and now it can't escape, and SCO has to pay its employees money. Whoever they are. Drat.
  • That leaves $464,500 for SCO Group "in full and final satisfaction of any claims that the Debtor may have against" Cattleback. Like they are really fighting.

Hence the word fraud might start floating past in middle space... so before such a horrible thought takes root in anyone's brain, SCO explains why it is not a fraud:

  • It's cheaper than litigating the controversy between SCO and itself...er.. I mean Cattleback
  • the judge has discretion, and settlements are encouraged and the court should only look and see whether the settlement "falls below the lowest point in the range of reasonableness." Well. Not hard to leap over that bar, I'd say. They might just get this approved if that's all it takes.
  • True, a transfer made for no consideration within a year before bankruptcy -- let alone two months before -- is avoidable if the transfer was made with the intent to "hinder, delay or defraud a creditor" ... heaven forfend. Or if the transfer was made when the transferor was insolvent or would make him so. How about if he woke up and smelled the coffee, knew bankruptcy was almost inevitable, and set up a straw subsidiary to siphon off an asset so Novell couldn't get it? Well. There goes my wild imagination again. Skip that. SCO says it's paying itself the proceeds of a "market-based sale", so that's better than the lowest point in the range of reasonableness.
  • It was Ocean Tomo that advised SCO to set up Cattleback after all. It never entered SCO's pretty little head to defraud any creditor. No. This isn't a bit like that.
  • SCO was solvent in July so it can't be faulted on that account. True, and it still is, so why is it in bankruptcy court? A cynic might say for the same reason it set up the newborn subsidiary and transfered an asset without consideration. The wind was blowing all one way, and SCO stuck its finger in the air. Or maybe it heard Novell tell the judge in Utah that for SCO bankruptcy was inevitable and imminent and caught a clue. No, not at all. SCO was solvent, so no one can prove it's a fraud. No sir, "there is no evidence of actual intent nor any badge of fraud to substitute for such evidence that would support a recovery." Badge of fraud? That's a new phrase to me. My imagination takes wings. Surely there could be no more worthy recipient of such an honor. I didn't know they have badges for that. Well, whoever can design a badge of fraud, please send it to me, so we can start thinking of an award ceremony. Joke. Joke. Here's what it means. And here is a ruling where the court goes into detail. The short version is that because it's hard to know or prove intent, being inside your noggin, they look for outward indicia. Like the ones SCO mentions. Here's another it didn't list: that on the eve of bankruptcy, you gave your brother a lot of money. Stuff like that. It's like the Girl Scouts, I gather. One badge won't do it. But get enough badges, and you fly on up.
  • And nobody could make a constructive fraudulent transfer theory stick either, because SCO was solvent not only before but after the transfer, so any money it can get for the estate "is clearly a win."
So would the court please let them do this too? It's " Method and apparatus for monitoring computer systems and alerting users of actual or potential system errors", patent number 6,529,784. After recent events, I'd like to see someone invent a Method and apparatus for monitoring courtrooms and alerting judges of actual or potential lawyer errors issuing out of their mouths. Colloquially known as a dancing baloney meter. We sure could have used one of those at the hearing yesterday.

We reported the patent had issued back in 2003, to gales of laughter and suggestions of prior art. Of course, you may know of more.

The last entity on planet earth I'd want to hold a patent, good, bad or indifferent, would be SCO. However, I think the creditors perchance will hold the opinion that any patent worth $570,000 in a firesale would be worth a lot more if retained and used to sue victims right and left. Just saying. And isn't that SCO's line of work? They even need the court to approve this "agreement" or it'll have to sue itself.

I don't see why SCO needs to sell its patent. According to Mr. Spector, they are potentially going to be raking in the dough, millions and millions for errno.h and stuff. If they can just hold on.

Here are all the filings:

190 - Filed & Entered: 11/06/2007
Order on Application to Employ
Docket Text: Order Approving the Employment of Mesirow Financial Consulting, LLC as Financial Advisors to the Debtors. (Related Doc # [74]) Order Signed on 11/6/2007. (LCN, )

191 - Filed & Entered: 11/06/2007
Motion to File Under Seal
Docket Text: Order Authorizing SUSE to File Exhibits to Affidavit of Felix Imendoerffer Under Seal. (Related Doc # [143]) Order Signed on 11/6/2007. (LCN, )

192 - Filed & Entered: 11/06/2007
Order on Motion to Approve
Docket Text: Order Authorizing Retention of Professionals Utilized in the Ordinary Course of Business. (Related Doc # [138]) Order Signed on 11/6/2007. (Attachments: # (1) Exhibit A # (2) Exhibit B) (LCN, )

193 - Filed & Entered: 11/06/2007
Minute Entry
Docket Text: Minutes of Hearing held on: 11/06/2007
Subject: OMNIBUS. (vCal Hearing ID (57215)). (related document(s) [183]) (SS, ) Additional attachment(s) added on 11/6/2007 (SS, ).

194 - Filed & Entered: 11/06/2007
Motion to Approve Compromise (B)
Docket Text: Motion to Approve Compromise Debtors' Motion for Approval of Compromise of Incipient Controversy Filed by The SCO Group, Inc.. Hearing scheduled for 12/5/2007 at 10:00 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 11/28/2007. (Attachments: # (1) Notice # (2) Proposed Form of Order # (3) Certificate of Service and Service List) (Werkheiser, Rachel)

I didn't get all the certifications and notices, because it's getting too expensive and they're the same, over and over. But everything else is there.

Update: I received a donation to cover the extra documents. Thank you. And a comment had me running to look at SCO's SEC filings. SCO says that it set up Cattleback and transferred the patent to it without consideration in mid-July. Where is that to be found in SCO's SEC filings? Here's SCO's 10Q for the period ended July 31, 2007. Not one word that I can find about Cattleback's establishment or about transferring an asset to it.

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

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

In re:

The SCO GROUP, INC., et al.,1

Debtors.
Chapter 11

Case No. 07-11337 (KG)
(Jointly Administered)

Objection Deadline: November 28, 2007, at 4:00 p.m. (prevailing Eastern time)
Hearing: December 5, 2007 at 10:00 a.m. (prevailing Eastern time)

MOTION FOR APPROVAL OF COMPROMISE OF INCIPIENT CONTROVERSY

The above captioned Debtors seek approval of a compromise in settlement of a potential controversy between the Debtor, The SCO Group, Inc. ("Debtor") and one of its wholly-owned subsidiaries, Cattleback Intellectual Property Holdings, Inc. In support of this motion (the "Motion"), the Debtor states:

Jurisdiction and Background

1. The Court has jurisdiction over the matters subject of this Motion pursuant to 28 U.S.C. §§ 157 and 1334. The procedural predicates for the relief sought herein is Rule 9019 of the Federal Rules of Bankruptcy Procedure.

2. On September 14, 2007 (the "Petition Date"), the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 101-1532.

(1)

3. For greater detail regarding the background of the Debtors' business and events leading up to the filing of these cases, the Debtors refer the Court and parties to the Declaration of Darl C. McBride, Chief Executive Officer of the Debtors, in Support of First Day Motions (the "McBride Declaration") filed on the Petition Date and incorporated herein.

4. In June, 2007, the Debtor decided to sell U.S. Patent No. US 6,529,784 titled "Method and Apparatus for Monitoring Computer Systems and Alerting Users of Actual or Potential System Errors." On June 29,2007, the Debtor retained a professional intellectual property marketing firm, Ocean Tomo, LLC, to help it market the patent.

5. Ocean Tomo recommended that the Debtor set up a separate company to hold and market the patent, which advice the Debtor followed.

6. Accordingly, on July 17,2007, the Debtor formed a wholly-owned subsidiary which it called Cattleback Intellectual Property Holdings, Inc.

7. The Debtor then assigned the patent to Cattleback on July 18,2007.

8. Inasmuch as Cattleback was always a wholly-owned subsidiary of the Debtor, it paid no consideration for the transfer.

9. Ocean Tomo marketed the patent to almost 200 companies during August, 2007, with several companies showing interest and doing due diligence.

10. From September 7 - 12, Ocean Tomo received six bids for the patent.

11. Ultimately, Ocean Tomo and Cattleback settled upon a buyer for $570,000.

5 (2)

12. In the meantime, while marketing efforts were underway, the Debtor filed a petition for relief under Chapter 11 of the Bankruptcy Code.

The Settlement

13. Creditors could argue that a transfer for no consideration made by a chapter 11 debtor shortly before its entry into chapter 11 should be avoided as a fraudulent transfer. In lieu of filing a lawsuit against its wholly-owned subsidiary, the Debtor has agreed to the following resolution of the incipient dispute.

14. Cattleback will pay to the Debtor 100% of the net proceeds of its sale of the patent and will assume any obligations, if any, incurred by the Debtor for the development and marketing of the patent.

15. The Debtor is obligated under a marketing agreement to pay Ocean Tomo $60,500 as the balance of its fee for finding a buyer for the patent. In addition, the Debtor is obligated to the inventor of the product and to several employees for bonuses approved by the Debtor pre-petition in the aggregate amount of $45,000. These expenses will be paid by Cattleback and the balance of the sale proceeds ($464,500) will be turned over to the Debtor in full and final satisfaction of any claims that the Debtor may have against it.

Standards For Approval Of Compromises

16. Rule 9019(a) of the Federal Rules of Bankruptcy Procedure provides that, after notice and a hearing, a court may approve a proposed compromise or settlement of a controversy. The settlement of time-consuming and burdensome litigation, especially in the bankruptcy context, is encouraged and "generally favored in bankruptcy." In re World Health

6 (3)

Alternatives. Inc., 344 B.R. 291, 296 (Bankr. D. Del. 2006). See also In re Penn Central Transportation Co., 596 F.2d 1102 (3d Cir. 1979) ("administering reorganization proceedings in an economical and practical manner it will often be wise to arrange the settlement of claims"), quoting In re Protective Committee for Independent Stockholders of TMT Ferry. Inc. v. Anderson, 390 U.S. 414, 424 (1968).

17. The decision to approve a settlement "is within the sound discretion of the bankruptcy court." World Health Alternatives, 344 B.R. at 296. See also In re Neshaminy Office Building Assocs., 62 B.R. 798, 803 (B.D. Pa. 1986), cited with approval in Meyers v. Martin (In re Martin), 91 F.3d 389 (3d Cir. 1996). The bankruptcy court should not substitute its judgment for that of the debtor. See Neshaminy Office Building, 62 B.R. at 803. The responsibility of the court "is not to decide the numerous questions of law or fact raised. . . but rather to canvass the issues and see whether the settlement 'fall[s] below the lowest point in the range of reasonableness.'" In re W.T. Grant Co., 699 F.2d 599, 608 (2d Cir. 1983)(quoting Newman v. Stein, 464 F.2d 689,693 (2d Cir. 1972)). See also World Health Alternatives, 344 B.R. at 296 (stating that "the court does not have to be convinced that the settlement is the best possible compromise. Rather, the court must conclude that the settlement is within the reasonable range of litigation possibilities.") (internal citations and quotations omitted).

18. In determining the fairness and equity of a compromise in bankruptcy, the United States Court of Appeals for the Third Circuit has stated that it is important that the bankruptcy court "apprise[ ] itself of all facts necessary to form an intelligent and objective opinion of the probabilities of ultimate success should the claims be litigated, and estimated the

7 (4)

complexity, expense and likely duration of such litigation, and other factors relevant to a full and fair assessment of the [claims]." In re Penn Central Transportation Co., 596 F.2d 1127, 1153 (3d Cir. 1979). See also In re Marvel Entertainment Group. Inc., 222 B.R. 243 (D. Del. 1998) (quoting In re Louise's Inc., 211 B.R. 798, 801 (D. Del. 1997) (describing "the ultimate inquiry to be whether 'the compromise is fair, reasonable, and in the interest of the estate.' ").

19. The Third Circuit has enumerated four factors that should be considered in determining whether a settlement should be approved: "(1) the probability of success in litigation; (2) the likely difficulties in collection; (3) the complexity of the litigation involved and the expense, inconvenience and delay necessarily attending it; and (4) the paramount interest of the creditors." In re Martin, 91 F.3d at 393. Accord Will v. Northwestern Univ. (In re Nutraquest, Inc.), 434 F.3d 639,644 (3d Cir. 2006).

20. In passing on proposed settlements, the standard that courts applied under the former Bankruptcy Act is the same standard as courts should apply under the Bankruptcy Code. In re Carla Leather, Inc., 44 B.R. 457, 466 (Bankr. S.D.N.Y. 1984), aff'd, 50 B.R. 764 (S.D.N.Y. 1985). As stated by the Supreme Court in Protective Committee, supra, under the Act, to approve a proposed settlement, a court must have found that the settlement was "fair and equitable" based on an -

Educated estimate of the complexity, expense, and likely duration of . . . litigation, the possible difficulties of collecting on any judgment which might be obtained and all other factors relevant to a full and fair assessment of the wisdom of the proposed compromise.

8 (5)

390 U.S. at 424. See also In re Justice Oaks II, Ltd., 898 F.2d 1544, 1549 (11th Cir. 1990); In re Lion Capital Group, 49 B.R. 163 (Bankr. S.D.N.Y. 1985); Drexel v. Loomis, 35 F.2d 800 (8th Cir. 1929); Matter of Marshall, 33 B.R. 42 (Bankr. D. Conn. 1983).

21. Applying the foregoing standards, the Debtor believes that the compromise satisfies that four-part test relating to Rule 9019. The Debtor also believes that based upon the likelihood of success in litigation, and the expense, inconvenience and delay that would be caused by litigating, litigation would not be in the best interests of the estate. Therefore, it is the Debtor's belief, in exercising its business judgment, that after full and careful consideration of the issues and the merits of any litigation, the terms of the compromise (resulting in a benefit to the estate of $464,500) is in the best interests of the estate.

This Settlement Satisfies The Above Standards

22. A transfer made for no or inadequate consideration within one year before the transferor's bankruptcy is avoidable if either: (1) the transfer was made with the actual intent to hinder, delay or defraud a creditor; or (2) if the transfer was made when the transferor was insolvent or the transfer rendered the transferor insolvent. 11 U.S.C. § 548(a). Because the Debtor could not prove either of these theories, a settlement whereby the putative defendant provides the estate 100% of the net proceeds of the market-based sale of the transferred asset and indemnifies the estate for any expenses is far above the "lowest point in the range of reasonableness" as required by Rule 9019 and applicable law.

23. Here, the plaintiff would have an insurmountable burden to prove that the transfer of an asset that the transferor was itself trying to sell at market prices but placed into a

9 (6)

holding company on the advice of professional marketing firm was done with the actual intent to hinder, delay or defraud its creditors. In this case particularly, where the Debtor was plainly solvent on the date of transfer and was current with all of its creditors, there is no evidence of actual intent nor any badge of fraud to substitute for such evidence that would support a recovery.

24. Nor could a putative plaintiff prevail under a constructive fraudulent transfer theory. Again, the transferor was solvent on the date of transfer, both before and after the transfer. Therefore, any settlement at all that brings any amount of money to the estate is clearly a win for the estate.

[remainder of page intentionally left blank]

10 (7)

WHEREFORE, the Debtor requests the Court to enter an order approving the compromise and granting the Debtors such other and further relief as this Court deems just and proper.

Dated: November 6 , 2007

PACHULSKI STANG ZIEHL & JONES LLP
(signature)
Laura Davis Jones (Bar No. 2436)
James E. O'Neil (Bar No. 4042)
Rachel Lowy Werkheiser (Bar No. 3753) [address]
[phone]
[fax]
[email addresses]

and

BERGER SINGERMAN, P.A.
Paul Steven Singerman
Arthur J. Spector
Grace E. Robson
[address]
[phone]
[fax]
and
[address]
[phone]
[fax]
[email addresses]

Co-Counsel for the Debtors and Debtors-in-Possession

11 (8)

1 The Debtors and the last four digits of each of the Debtors' federal tax identification numbers are as follows: (a) The SCO Group, Inc., a Delaware corporation, Fed. Tax Id. #2823; and (b) SCO Operations, Inc., a Delaware corporation, Fed. Tax ID. #7393.

  


SCO Agrees With Itself (Technically with its New Subsidiary Cattleback) to Give Itself Some Bonuses - Updated | 390 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
SCO Agrees With Itself (Technically with its Subsidiary Cattleback) to Give Itself Some Bonuses
Authored by: Anonymous on Wednesday, November 07 2007 @ 12:42 AM EST
PJ its been a big day! Get some rest, please. You are writing faster than I
can read!

[ Reply to This | # ]

Corerections Here
Authored by: snakebitehurts on Wednesday, November 07 2007 @ 12:46 AM EST
I got the first one. LOL

[ Reply to This | # ]

SCO Fraud
Authored by: Anonymous on Wednesday, November 07 2007 @ 12:47 AM EST
Please, make the pain stop.

Is there anyone out there who can stop this fraudster, this huckster, this utter
lying, conniving, deceitful little toady that goes by the name SCO?

Please?

Anyone?

I'm begging you.

[ Reply to This | # ]

  • SCO Fraud - Authored by: Anonymous on Wednesday, November 07 2007 @ 07:56 AM EST
    • SCO Fraud - Authored by: Anonymous on Wednesday, November 07 2007 @ 01:52 PM EST
  • SCO Fraud - Authored by: Anonymous on Wednesday, November 07 2007 @ 03:30 PM EST
Newspicks discussed here
Authored by: atheist on Wednesday, November 07 2007 @ 12:49 AM EST
Make the subject match the newspick title please, and follow the instructions if
pasting links

[ Reply to This | # ]

Off Topic here
Authored by: atheist on Wednesday, November 07 2007 @ 12:50 AM EST
They've discovered 5 planets orbiting a star 41 light years away

[ Reply to This | # ]

This reminds me of an old puzzle
Authored by: Anonymous on Wednesday, November 07 2007 @ 12:52 AM EST
Three guys are going to share a hotel room for the night, and the desk clerk
charges them $30, i.e. $10 each (ok, so it's a *very* old joke). The manager
later tells him he made a mistake, the room is only $25, not $30, so go refund
their $5. Being too lazy to make change, and a little greedy, he gives them $1
each and pockets the extra $2. So each guy ended up paying $9, making $27 for
the room, plus the $2 the desk clerk kept makes $29. What happened to the extra
dollar?

At first I thought I'd put this in the off-topic thread, but actually it pretty
much describes SCO-Logic.

[ Reply to This | # ]

$570,000 petty cash
Authored by: Anonymous on Wednesday, November 07 2007 @ 12:58 AM EST
"Cattleback gets paid for the patent and pays SCO $570,000,
"the full amount offered, (and may I inquire the last time a
"patent was worth that little if it had any value at all?)"

They got Steve Ballmer in to throw the couch around the room,
and that's all the loose change that fell out...., oh and a
Badge of Fraud, but it was only a plastic one from a crackerjack box.

[ Reply to This | # ]

Secret Buyer?
Authored by: bstone on Wednesday, November 07 2007 @ 01:00 AM EST
What possible reason could they have to keep the name of the buyer secret? I'm
guessing the secret might be "Acacia".

I also wish at least one judge somewhere would check out the truthfulness of at
least one of their filings. In this case, I wonder what he would find if he
asked for the list of the "200" companies that the patent was
"marketed" to, and then asked them about it.

[ Reply to This | # ]

Intellectual (?) Property
Authored by: Anonymous on Wednesday, November 07 2007 @ 01:16 AM EST
"Tomo is a Japanese word for intelligent and friendly and reflects the Asian notion of an integrated, friendly group of related businesses."
Tomo is a Maori word for a hole in the ground, a limestone sinkhole, or a narrow gulch. In this context these items (3 page pdf) might have been handy to stem the flow of nonsense from SCO

[ Reply to This | # ]

Why aren't these people simply creditors?
Authored by: Anonymous on Wednesday, November 07 2007 @ 01:25 AM EST
I don't understand this.

They make new deals and they are free to spend money like crazy, yet owe nothing
to their existing creditors?

Isn't there supposed to be some control over what they spend?

Or is this judge and his court a complete pushover?

It would seem that any major deals, unless agreed to otherwise by existing
creditors and the court, should place any amounts due anyone into creditor
status and not paid.

This is beginning to look more like a ream job (you know, the big multibladed
kind machinists use) than a court where arguments creditors make have any
bearing whatsoever. Or is the point to show that your arguments are
meaningless, wait until you stop, and then say, look, nobody is objecting so we
must be right!

If this doesn't get shut down mighty quick, what is bankrupt is the morality of
the system. And that reflects badly on our entire country.

[ Reply to This | # ]

Where is lady justice? Broke and in the gutter pandering, with all her money paid to lawyers?
Authored by: Anonymous on Wednesday, November 07 2007 @ 01:46 AM EST
Where is lady justice? Broke and in the gutter pandering, with all her money
paid to lawyers?

In the US where rule of law is the word of the land (you hear all lawyers
trumpet this). Well, this SCO saga, and the bravado of the judge to rule in
ways "like HE, even knows or has any sense about what has been going on,
and how that newSCO (a comedy in the rename of Caldera it was too), and how
newSCO actually attacked everyone else first, including launching a lawsuit
AGAINST Novell for slander of title etc... The judge made a huge mistake in the
stay of the arbitration, as it was defensive, in part due to newSCO's launch of
the OFFENSIVE actions against NOVELL in the first place (the only mistake that
Novell has made, is NOT pointing out to this bankruptcy judge that it was newSCO
who went after Novell in the first place, even after approaching them to get the
copyrights transferred, that Novell said NO to, and that newSCO did this IN
POINT OF FACT, even BEFORE launching suits against IBM and the rest of the world
KNOWING that they did not have the copyrights, as otherwise why would they be
asking (quietly) Novell for them, almost as soon as Darl took over at newSCO to
head it's agressive actions against IBM, and then Novell...?

Novell should appeal this mistake by this bankruptcy judge, as he has not done
his homework well enough to make such a senseless ruling (Novell is not the
aggressor, newSCO has been, and is still, by virtue of taking this to
bankruptcy, newSCO is the aggressor, and by going to bankruptcy is making a
mockery of the "RULE OF LAW" ... showing now that only those with
money can be a citizen, and even if you have money, that the legal system is so
over taxed and lost, that judges like the one in the bankruptcy court, can't
take the time so figure out the P's an Q's and make a correct ruling.

Where is lady justice? She seem, due to this judge's ruling and maybe future
rulings to be lost and with no more than a penny in her pocket, due to what
seems to be a broken system, that no one can play in, unless you are rich.

And that is wrong.

Dickens, in "Bleak House", painted a picture of a broken legal system
in that day (a reflection of the truth that was in time corrected, due in part
to his writing about it and the public reading about it... where the system was
gamed to only make lawyers rich. The same is true more and more in the US
today.

Will the court find it's way back to being one of integrity and a quick and fair
trial...without these expensive games?

Most likely NO, and that is a sad future ending to all of this, no matter what
the case ends up like, in the end... when we look at the big picture, something
is broken... and lady justice, saddly is left dying in a ditch somewhere with
all the lawyers who are involved drinking their expensive imported fine wines,
in comfortable houses, while the rest of us "eat only the cake that they
want us to dream about".

PJ - you say wait for justice to prevail, but for anyone else but a large
corporation, who can afford to experience this path? And this is a very sad
thing. I feel sorry for lady justice now in ways that I can't begin to write
about.

Dickens would have loved this story, as it would have been both bread and butter
for him to apply his skill to.

Nemo


[ Reply to This | # ]

If it is a wholy owned subsiduary, what's the problem?
Authored by: Filias Cupio on Wednesday, November 07 2007 @ 02:58 AM EST
If SCO gives a $500,000 patent to Cattleback, that decreases the value of SCO by
$500,000 and increases the value of Cattleback. But SCO owns 100% of Cattleback,
which increases in value, so SCO come out even. Cattleback is an asset which
could be sold off to pay creditors.

So why is this a problem? Is it because Cattleback is not in chapter 11, and so
can give assets away without court approval? (I.e. SCO gives to Cattleback -
"it's OK, because we own Cattleback 100%", then Cattleback gives to a
fairy "it's OK, we're not bankrupt and don't need permission.")

Clearly, IANAL.

[ Reply to This | # ]

What other dodgy dealings are lurking?
Authored by: kh on Wednesday, November 07 2007 @ 04:21 AM EST
It makes me wonder what other things are lurking in SCO's accounts that they
didn't tell the BK court. Surely this should have been in the initial filings.

Are they just starting to realise that the BK court will shine a light on
various dodgy dealings they have been hiding?

[ Reply to This | # ]

SCO Qui s'excuse, s'accuse! NT
Authored by: Anonymous on Wednesday, November 07 2007 @ 04:21 AM EST
NT

[ Reply to This | # ]

OMG - They used the "F" Word
Authored by: SilverWave on Wednesday, November 07 2007 @ 04:46 AM EST
Now it gets interesting...



---
Software Patents are leeches on the creativity of mankind.

[ Reply to This | # ]

Isn't that patent related to Hipcheck?
Authored by: Khym Chanur on Wednesday, November 07 2007 @ 05:32 AM EST

"Method and apparatus for monitoring computer systems and alerting users of actual or potential system errors",

That sounds an awful lot like what Hipcheck does. Hipcheck, which SCO wants to sell to York while keeping a perpetual, irrevocable, etc license to prepare derivative works and sell it, plus SCO would get 75% of York's revenue from Hipcheck sales for the next three years (capped at $3 million dollars). Wouldn't it make a lot more sense for them to keep the patent, so that Hipcheck would have a monopoly on that market?

---
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 | # ]

SCO wants to dissipate its assets; like ISO, court's reputation is on the line
Authored by: Anonymous on Wednesday, November 07 2007 @ 07:03 AM EST

Sorry, we have no money to pay our creditors, so dismiss our petition
and let us go on to other things and stop bothering us and let bygones
be bygones.

SCO has mocked every court it's been in, and continues to do so.

It's baffling. It care nothing for its own good name, or anyone else's.

Does this happen a lot in bankruptcy, a petitioner trying to dissipate
its assets so it doesn't have to pay anything to anyone, and there
are no consequences?

The stakes, it seems to me, are the same for the bankruptcy court
as they were for ISO: can it salvage its own credibility? ISO managed
to save itself. Can the bankruptcy court?


[ Reply to This | # ]

Oh, Mr SCOG, just one question...
Authored by: Ian Al on Wednesday, November 07 2007 @ 07:07 AM EST
Do you think the US Trustee has a good sense of humour?

---
Regards
Ian Al

Linux: Genuine Advantage

[ Reply to This | # ]

Badge of fraud?
Authored by: Anonymous on Wednesday, November 07 2007 @ 07:14 AM EST

I can see it now:

Novell's lawyer:
Your honor, SCO indeed deserves the badge of fraud.
SCO's lawyer:
Badges? We don't need no steenking badges!

[ Reply to This | # ]

  • Badge of fraud? - Authored by: Anonymous on Wednesday, November 07 2007 @ 12:36 PM EST
SCO Causes Outrage at Groklaw
Authored by: DaveJakeman on Wednesday, November 07 2007 @ 07:19 AM EST
Well, I can see many here feel strongly about this.

Apart from the use of the F-word though -- which is interesting -- in my view,
this is not as outrageous as what happened in the hearing yesterday; or SCO's
proposal to sell off assets they don't own, arguing that it's OK, people do that
all the time...

Delaware seems to be living up to its reputation. The US Trustee seems to be on
the ball -- very much so -- but that judge...

---
Monopolistic Ignominious Corporation Requiring Office $tandard Only For
Themselves

[ Reply to This | # ]

Ocean Tomo is owed money!
Authored by: Anonymous on Wednesday, November 07 2007 @ 08:13 AM EST
We are told that SCO owes Ocean Tomo $60,500 because of a pre-petition marketing agreement.

So, why weren't they listed as one of the top 20 unsecured creditors back in September?

[ Reply to This | # ]

Using Open Source Audacity For Conversion ;-)
Authored by: TheBlueSkyRanger on Wednesday, November 07 2007 @ 08:14 AM EST
Hey, everybody!

If I shake my head anymore, I think my brain will become dislodged from the
spinal column.

I think what makes this so frustrating is, most people know they are doing
something wrong and try to hide it, or at least make an effort. There is an
acknowledgement that there is something wrong here. But SCO is acting like the
old, "If I'm not supposed to do it, then how come I can?" Just move
stuff around, mess with the legal system, and everything, just to get themselves
some fame, some standing, and some money.

One of the things I love in Pearls Before Swine was a strip where the crocs made
a deal with the Devil to get Zebra, and promptly found themselves in Hell. When
them complained, the Devil laughed and said, "Of course, I lied! I'm the
Devil, aren't I?" SCO seems to be doing everything it can to remind people
they can't be trusted. Would just LOVE to see their long term business
prospects.

Dobre utka,
The Blue Sky Ranger

[ Reply to This | # ]

SCO Will Totally Win In Delaware!
Authored by: Anonymous on Wednesday, November 07 2007 @ 08:30 AM EST
It's looking - more and more and more - that SCO knew exactly why Delaware was
the place to be. SCO will "win" everything it wants to win in
Delaware.

[ Reply to This | # ]

Public Pair transaction shows SCO paid late fee last year
Authored by: Anonymous on Wednesday, November 07 2007 @ 08:54 AM EST
Transfer has not been recorded, but the Public PAIR patent record shows that SCOX was late in its filing last year. It also negotiated a lower payment since it had changed from a "Large Entity" to a "Small Entity.

PATENT NUMBER 6,529,784
FEE AMT $450.00
SUR- CHARGE $65.00
PYMT DATE 10/02/06
U.S. APPLICATION NUMBER 09/514,488
PATENT ISSUE DATE 02/29/00
APPL. FILING DATE 03/04/03
PAYMENT YEAR 04
SMALL ENTITY? YES
ATTY DKT NUMBER 3412.2.5

[ Reply to This | # ]

SCO's Strategy
Authored by: Anonymous on Wednesday, November 07 2007 @ 09:00 AM EST
SCO's Strategy:

1. Sell the assets of the company (even if it doesn't own the assets) for a low

price (marketed to look like a high price: $36 mil = $10 mil + $10 mil in debt
+ $16 mil potential litigation wins) to a friend company (York) - while
stripping the assets of the ongoing litigation, so that the "real"
assets (the
"IP") are placed out of reach of creditors.
2. Use up the remaining money in litigation or payments to friends or
executives (e.g. the patent sale to its subsidiary).
3. Transition to Chapter 7 when there is no money left.
4. In Chapter 7, all the litigtion goes "poof!" since there are no
longer even
bones to pick by Novell, IBM, etc. Thus it gets a free pass out of bad
litigation. SCO gets to thumb its nose at its foes!
5. Form a new company - "SCO Phoenix".
6. Buy the assets back from York (who doesn't know what to do with them
anyway).
7. Sell "licenses" to obtain money from Microsoft and others willing
to use a
hired gun.
8. Start suing other companies again. The Phoenix rises anew!

For companies whose business model is litigation, this is a perfect way to use
and abuse the courts (if the bankruptcy court ends up blind).

Bankruptcy via Chapter 11 is then a way out should litigation turn out badly -
as in it's lawsuit against Novell - which would have bankrupted the company.

[ Reply to This | # ]

Implausible coincidenciality rates...
Authored by: Anonymous on Wednesday, November 07 2007 @ 09:25 AM EST
Intellectual Vultures Ventures, started by two ex-Microsoft executives, Edward Jung and Nathan Myhrvold
It's funny how it's raining IP-buying ex-MS execs all over this case...

[ Reply to This | # ]

    Capitalback, err, Cattleback
    Authored by: SpaceLifeForm on Wednesday, November 07 2007 @ 10:13 AM EST
    This is not about the money.
    This is about getting court approval for some other hidden activity.

    If the entire purpose of Cattleback was to hold and market the patent, as Ocean Tomo recommended (allegedly), then why does Cattleback have to continue to exist?

    14. Cattleback will pay to the Debtor 100% of the net proceeds of its sale of the patent and will assume any obligations, if any, incurred by the Debtor for the development and marketing of the patent.

    Why would SCOX have any obligations if the patent has been sold?

    ---

    You are being MICROattacked, from various angles, in a SOFT manner.

    [ Reply to This | # ]

    Cattleback Registration
    Authored by: joef on Wednesday, November 07 2007 @ 10:58 AM EST
    It's in Delaware: http://www.corp.delaware.gov/onlinestatus.shtml and search for cattleback. Sorry, I couldn't get the link to work after several tries!

    THIS IS NOT A STATEMENT OF GOOD STANDING File Number: 4389925 Incorporation Date / Formation Date: 07/16/2007 (mm/dd/yyyy) Entity Name: CATTLEBACK INTELLECTUAL PROPERTY HOLDINGS, INC. Entity Kind: CORPORATION Entity Type: GENERAL Residency: DOMESTIC State: DE REGISTERED AGENT INFORMATION Name: THE CORPORATION TRUST COMPANY Address: CORPORATION TRUST CENTER 1209 ORANGE STREET City: WILMINGTON County: NEW CASTLE State: DE Postal Code: 19801 Phone:
    Since they were formed in July of this year, wouldn't this transaction raise issues of hiding assets? Could the entire event of creating the subsidiary be nullified (avoided?) for being done just before filing for bankruptcy?

    [ Reply to This | # ]

    • One would think... - Authored by: Anonymous on Wednesday, November 07 2007 @ 11:46 AM EST
    SCO Agrees With Itself (Technically with its New Subsidiary Cattleback) to Give Itself Some Bonuses
    Authored by: Bill The Cat on Wednesday, November 07 2007 @ 11:33 AM EST
    I'd like to see someone invent a Method and apparatus for monitoring courtrooms and alerting judges of actual or potential lawyer errors issuing out of their mouths. Colloquially known as a dancing baloney meter. We sure could have used one of those at the hearing yesterday.

    This is just another aspect of our ethical legal system that causes me to lose 100% faith in that system. Lawyers are supposed to be above board, ethical and keep the legal system in good light. That may have been true long ago but today, that is not the case. This is why there are so many [anti] lawyer jokes floating around. Why so many people actually fear the legal system.

    Today's environment of "win at any cost" including lying, cheating, stealing and, yes, abusing the legal system is just a part of that. It gets worse day by day. Sure, there are a LOT of good lawyers out there but, the number of bad ones like Boies & Co. are grwoing in leaps and bounds.

    ---
    Bill The Cat

    [ Reply to This | # ]

    Cattleback as a play on words
    Authored by: Anonymous on Wednesday, November 07 2007 @ 11:42 AM EST
    The driver(s) at the back of all of these doings is utterly contemptuous
    intellect. To that intellect--and let's please handle with lead gloves reports
    of conversations with anyone at or near the center of SCO, whatever that might
    be, that conveyed how genuinely distressed such a person or persons may have
    appeared to have been at the turn events; Ted Bundy, for example, was an
    absolute charmer--business is a joke, fair play is joke, UNIX is a joke, Linux
    is a joke, customers are a joke, the court system is a joke; that is, to that
    intellect, *this is all _play_*, which is why it's so dangerous, capricious, and
    destructive. To that intellect, there is no such thing as loss; there's just
    another, and another, and another resource-sucking play, just another, always
    another, instance of make itself the center of attention and making the
    hypnotized suckers dance. Look back through all the coverage of this process and
    identify how many times the entity that is SCO has done things that to anyone
    interested in *actually* making money, *actually* interacting with community,
    *actually* succeeding and growing in any reasonably sunlit way, have seemed,
    well, insane? It seemed, it seems, insane because it *is* insane.

    So consider, please, the name Cattleback. A bull is a cattle, and the metabolic
    waste from a bull exits somewhere toward the rear--at the, er, back. *That name
    is itself more of the joke.*

    Profound mental illness is the driver behind all these doings. Stop imagining
    that evil genius, a brilliant chess player or players, lies/lie behind it;
    that's just our human tendency to project itself as an omnipotent deific
    container around its own lack of understanding. Those at the center of this
    conflagration *do not care* how the game comes out or who gets hurt or what gets
    lost in the process; the conflagration itself, prolonging it for one more day,
    one more hearing, is the goal.

    Of course, now have that we're in "the bankruptcy phase"--as if it's
    the life cycle of star or a beetle--we have indeed entrained entirely new
    subindustries of opportunists, parasitses and hangers-on--specialists trained in
    extracting profit, of commoditizing, the tiniest detectable gradient of
    misunderstanding, delay, deceit, and misery. But the core driver of these events
    is sick intellect, and to that intellect *all* of this, in any flavor, all day
    every day, is just fine and dandy.

    Were it not so, SCO would always have been about actually building widgets,
    hardware or software or otherwise, and selling same at a reasonable profit, and
    growing that business and taking it where it may go, and then going home to
    live life--*always* going home to live real life, which is actually why we do
    these things at all. But no. To a sufficiently sick intellect, that simple
    process, living life well, reproducing, and then dying well, is also a joke. To
    that intellect, why live such a sunlit, healthy life when you can do *this*?

    [ Reply to This | # ]

    The Whos on the hook for what thread
    Authored by: LaurenceTux on Wednesday, November 07 2007 @ 11:43 AM EST
    Has anybody looked to see (from public records) as to what amounts each of the
    various officers and such could be on the hook for?
    ie if Kimball and Gross go Boondock Saints on TSCOG and BSF
    Darl is on the hook for X million
    the former C?O folks are on the hook for X million
    BSF has folks on the hook for X million

    If you added up all of the "loose change" i wonder if we could get
    Novell paid off?

    Bonus round question is what CRIMINAL charges folks are maybe on the hook for.

    [ Reply to This | # ]

    SCO reorganization plan
    Authored by: Anonymous on Wednesday, November 07 2007 @ 11:57 AM EST
    Should the trustee be worried about SCO's reorganization plan? SCO is attempting
    a fire sale on the UNIX business, the existing cash flow. And now selling off
    the assetts of SCOme (the cattleback patent).

    So what is SCO's future as a business?

    An assetless lawsuit target appears to be SCO's only future.

    [ Reply to This | # ]

    Settlement favored in bankruptcy
    Authored by: Anonymous on Wednesday, November 07 2007 @ 11:59 AM EST
    The settlement of time-consuming and burdensome litigation, especially in the bankruptcy context, is encouraged and "generally favored in bankruptcy." In re World Health
    Gee, I can think of some "time-consuming and burdensome litigation" they might settle.

    [ Reply to This | # ]

    Enron and shell companies
    Authored by: Anonymous on Wednesday, November 07 2007 @ 01:27 PM EST
    Wasn't part of Enron's downfall the fact that it created shell companies and
    created the appearance of false revenues/profit by transferring assets and
    overvaluing them?

    [ Reply to This | # ]

    On the other hand
    Authored by: stites on Wednesday, November 07 2007 @ 01:38 PM EST

    Cattleback gets paid for the patent and pays SCO $570,000, the full amount offered, (and may I inquire the last time a patent was worth that little if it had any value at all?) to SCO, and Cattleback will pay everything that was incurred by the Debtor for the development and marketing of the patent.

    Suppose that the patent is actually worthless. Then this transaction could be viewed as yet another way that the PIPE Fairy could pump money into SCO and its employees.

    ------------------
    Steve Stites

    [ Reply to This | # ]

    I'm far too jaded with SCO fraud
    Authored by: vb on Wednesday, November 07 2007 @ 01:51 PM EST

    It seems like no matter what blatant fraud SCO does, I yawn.

    There must be a lot of others like me. It really should have been a bombshell
    yesterday when SCO admitted that they have been plotting with York since 2005.

    SCO has just been waiting for the right time, that causes the most litigation
    damage to IBM/Novell, to transfer their "Unix rights" to York.

    Even if they lose against IBM/Novell. York can carry the FUD torch for the next
    few years.

    [ Reply to This | # ]

    Merely asking for information...
    Authored by: Anonymous on Wednesday, November 07 2007 @ 03:13 PM EST
    it is important that the bankruptcy court "apprise[ ] itself of all facts necessary to form an intelligent and objective opinion of the probabilities of ultimate success should the claims be litigated, and estimated the complexity, expense and likely duration of such litigation, and other factors relevant to a full and fair assessment of the [claims]."
    Good idea. Maybe it should start with the likelyhood that there could be any such litigation at all. Being a 100% subsidary of SCO it should be fully controlled, no? Doesn't have SCO full control over Cattleback's board? BTW, who are Cattlebacks officers?

    Also, just to spread any residue suspect of fraud, shouldn't the full agreement with Ocean Tomo be disclosed to the BK court? Have a look at the other five proposals made by prospective buyers?

    And if Ocean Tomo suggested to establish a shell company, what was the rationale behind that? Is SCO sure that the idea was not to sell the whole shell company including the patent?

    And, just hypothetically, what would happen to the estate if SCO defaulted on the contract with Ocean Tomo and sold Cattleback completely? Then Ocean Tomo would be (a new, surprise, surprise) creditor, but the resulting cash might be more than the $464,500 proposed by SCO's "settlement".

    Hm, and the beneficiaries of those bonuses, wouldn't that be even more new creditors of SCO? So they would be payed in full? How nice for them. Those employees wouldn't include the former CFO or any other officers of SCO I hope?

    <sarcasm off>

    /Andreas

    [ Reply to This | # ]

    Recursive obsfucation
    Authored by: Anonymous on Wednesday, November 07 2007 @ 03:23 PM EST
    There are way too many questions raised by this. I would hope the judge starts
    asking them soon, and fully expect Novell to ask a few of them, but I'm sorta
    puzzled that a couple of the noticable defects haven't already been brought up
    here.

    The ones that glare out the most to me:

    SCO purports to be wanting to sell ME and Hipcheck to York (who tout the
    incredible revenue potential of this vital, patented technology in an growing
    market), yet we find out that the single patent behind this future wealth has
    already been sold... (The mere fact that York doesn't question this should
    raise eyebrows...)

    IIRC, ME (and it's valuable patent) was one of those nebulous companies that
    Ralph Yarro was moving around under the Canopy umbrella, which eventually landed
    in the SCO bin. Wasn't it a spin-off of a spin-off of something else? So who
    are these "inventors and developers" that SCO is now
    "obligated" to pay for this? Are they coincidentally SCO insiders?
    If not, why are they suddenly entitled to payment now, even though their patent
    was apparently sold/exchanged/traded at least once (possibly more) previously
    (or is SCO selling other property they don't own)?

    This whole York deal, and all of the other transactions we are now seeing appear
    to be nothing but mud thrown in the water to obsfucate all the nefarious
    scheming beneath the surface.

    [ Reply to This | # ]

    Everex to track pirate Windows installations in China - the REAL mistake
    Authored by: Anonymous on Wednesday, November 07 2007 @ 04:07 PM EST
    The real mistake with the Everex article is the assertion that they are going to be tracking how many systems will be using pirated Windows on those machines.

    A system which doesn't go to the Everex site for upgrades could be:

    - used for an off-internet application and just never updated

    - run by a user who distrusts Everex and turns off the auto-update

    - converted to a different Linux distro

    - converted to a purchased copy of Windows

    This "anyone who doesn't do what we expect must be breaking the law" viewpoint is really obnoxious.

    John Macdonald

    [ Reply to This | # ]

    cell phones in subways
    Authored by: Anonymous on Wednesday, November 07 2007 @ 04:32 PM EST
    A cellphone has not much security value in a subway. Unless your train happens
    to be in an outlying area where it runs above ground, you just have a brick with
    no signal most of the time. All you can do with the cellphone is to use it
    immediately after you get out of the subway - but that's likely to be too late.

    John Macdonald

    [ Reply to This | # ]

    BUTTERFLYING COMPANIES
    Authored by: Anonymous on Wednesday, November 07 2007 @ 04:43 PM EST
    BUTTERFLYING is the buzz word used by tax lawyers and accountants here in
    Canada. BUTTERFLYING is apparently legal in Canada; because a tax lawyer and a
    tax accountant who both advise the federal government tax department's lawyers
    and accountants - both said it's legal.

    In the above situation, there was $1,500,000 profit by the main company. By
    establishing a series of BUTTERFLIED companies (yes owned by wives, uncles,
    fathers and so on) a grand total of $15,000 was paid out in corporate tax that
    year!

    Yes it's called a LOOPHOLE. And LOOPHOLES are not accidently when it comes to
    taxes. All LOOPHOLES are well developed as well as being well paid for to the
    highest bidder through political campaign donations.

    Be interesting to see if an expert in USA taxes is brought into the picture by
    Nouvell et al.

    [ Reply to This | # ]

    backdating?
    Authored by: Anonymous on Wednesday, November 07 2007 @ 05:02 PM EST
    why do i get the feeling that in both cattleback and york, sco is doing 'oops we
    meant to say ... but forgot to, no problem here's what we meant to do.see all
    right now, so there should be no penalty.'

    [ Reply to This | # ]

    GROKLAW - " A Method and apparatus for monitoring litigation and alerting users of actual or
    Authored by: SirHumphrey on Wednesday, November 07 2007 @ 06:03 PM EST
    potential fraud",

    [ Reply to This | # ]

    SCO Agrees With Itself (its New Subsidiary Cattleback) to Give Itself Some Bonuses
    Authored by: dio gratia on Wednesday, November 07 2007 @ 09:02 PM EST
  • SCO must pay Ocean Tomo, the folks that found the unnamed buyer, the balance that it owes them for that laborious task, and the balance they are owed is $60,500. That's the *balance* on a $570,000 deal? What did they get already?
  • This is the infamous 15 percent commission. The prior payment shows up as having cleared in SCOs Statement of Financial Affairs, Payments to Creditors, schedule 3b, Filing #131, Attachment #1, with a clearing date of August 1, 2007, for the amount of $25,000. This gives a total of $85,500 which is coincidentally enough 15 percent of the sales price.
  • SCO says it owes the inventor and unnamed "several employees" a cut, to the tune of $45,000 split between them, whoever they are. They have to pay themselves, unfortunately, since the marketing agreement says so. They are "obligated by the marketing agreement". Those are the breaks. Evidently SCO lost the poker hand, got into this marketing agreement, and now it can't escape, and SCO has to pay its employees money. Whoever they are. Drat.
  • It's my understanding (as an inventor and not a lawyer) that at least a handful of cases in the last couple of decades have found that inventors are entitled to a share of the profits reaped from the benefit of their inventions above and beyond normal renumeration. I knew of a couple of engineers working for Lockheed Missiles and Space, who eventual were awarded some number of millions of dollars for something they patented called a spin decoupler, a spring wind up launching pedestal situated between a booster and spacecraft (satellite), that would impart spin and give a push to separate the spent booster from payload. The patent was found to have a value to Lockheed of something like $112 million dollars over it's life. Another case comes to mind more recently, where the inventor of the blue LED in Japan won a much bigger settlement.

    I can readily imagine that a terms of sale through Ocean Tomo would include a percentage of par payment (and probably a royalty schedule) for the inventors to preclude litigation on their part. The inventors can be readily identified from the patent. The terms of the deal could probably be viewed as above board, regardless of whether or not SCO is trying to divest assets to assure escape into Chapter 7.

    [ Reply to This | # ]

    We're not trying to defraud the court! Honest!
    Authored by: sschlimgen on Wednesday, November 07 2007 @ 10:04 PM EST
    The language in this reminds me of that motion where they reminded Wells that
    she had at one time said they'd accted in good faith - as if that one time good
    behavior could be carried forward to cover all future misdeeds.

    ---
    Meandering through life like a drunk on a unicycle.

    [ Reply to This | # ]

    These latest events...
    Authored by: Anonymous on Wednesday, November 07 2007 @ 10:33 PM EST
    It has now become clear for me (sorry if you saw it before I did) that this
    entire fiaSCO has been about damaging Linux companies and spreading FUD. Up
    until yesterday I still had some reservations because I'm the type of person who
    is willing to give anybody the "benefit of the doubt". No more! It's
    quite clear now that the SCO management's only agenda is to create the largest
    crater they can. They want to pull everybody down into it and drain as much as
    they can from all involved. It's quite obvious that they have no intention
    whatsoever of continuing to operate a business in the traditional sense.
    They've squandered all the assets of two decent companies (oldSCO and Caldera)
    and have nothing to show for it other than a massive cyst on IBM, Novell, and
    Linux in general. It is now quite clear to me that somebody in Redmond is
    pulling the strings. Nobody in their right mind would take these actions if
    they wanted their company to be an ongoing concern.

    [ Reply to This | # ]

    SCO Agrees With Itself (Technically with its New Subsidiary Cattleback) to Give Itself Some Bon
    Authored by: Anonymous on Thursday, November 08 2007 @ 08:40 AM EST
    Cease and desist with using the phrase "Dancing Baloney Meter" as we
    have filed for it's patent nearly a year ago. We would also like to inform you
    that we have patented the method of patenting methods. With this new patent we
    will strike at everyone. Suing them all for having a patent itself. We don't
    even have to prove it for a few years. We can incorporate, Make a IPO on the
    stock, Juice the stock up with out and out lies, and ride the gravy train for
    nearly 5 years, 6 if we patent methods of "Chatting on a cellular phone
    while avoiding a three car pile up.".

    [ Reply to This | # ]

    My Ghast is Flabbered
    Authored by: elderlycynic on Thursday, November 08 2007 @ 11:32 AM EST
    SCO's take on the relationship between themselves and their
    wholly owned subsidiary is rather different from their take on
    that between Novell and SUSE.

    One has to admire that abount of brazen cheek.

    [ Reply to This | # ]

    Blazing Saddles
    Authored by: Anonymous on Thursday, November 08 2007 @ 05:14 PM EST
    The above captioned Debtors seek approval of a compromise in settlement of a potential controversy between the Debtor, The SCO Group, Inc. ("Debtor") and one of its wholly-owned subsidiaries, Cattleback Intellectual Property Holdings, Inc.

    So Darl "SCO" McBride was holding a gun to the head of Darl "Cattleback" McBride? Is this filing a derivative work based on the Mel Brooks classic?

    [ Reply to This | # ]

    Why there was no mention of cattleback in the 10Q
    Authored by: darkonc on Friday, November 09 2007 @ 12:59 PM EST
    Obviously the patent had no significant value until after cattleback found a buyer for it.

    If that wasn't the case SCO would have never given it away ... or spent time and money setting up the company to give it away to ... or spent time and energy finding a 'mysterious buyer' for it. (the mysterious buyer just materialized out of thin air -- honest!).

    Move along folk. This isn't the fraud you were looking for <waves hands>.

    ---
    Powerful, committed communication. Touching the jewel within each person and bringing it to life..

    [ Reply to This | # ]

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