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Searching for Cattleback - Updated - The Acrylis Connection
Thursday, November 08 2007 @ 01:30 PM EST

I thought I'd bring you up-to-date on my search for any mention of the Cattleback Holdings patent transfer in SCO's SEC filings.

I already mentioned that I couldn't find any mention of Cattleback in SCO's 10Q for the period ending July 31, 2007. That's where I'd expect to find it, since SCO says that it decided to sell the patent in June, set up Cattleback as a wholly owned subsidiary in the middle of July, and put the patent, for no consideration, that they now wish to sell into Cattleback immediately thereafter, on July 18. So I figured it would be in that 10Q if anywhere.

It's not there, so I went looking through all of SCO's SEC filings beginning with July and working up to the present to see if I could find a word about SCO allegedly transferring a patent to a newly formed subsidiary, Cattleback Holdings. I can't find it mentioned anywhere.

I don't know what the SEC reporting requirements are, by the way, on something like this. I just know that if I were a shareholder, I'd want to know about the company setting up a subsidiary and transferring a patent without consideration they say is worth $500,000+ to that subsidiary, even if I thought it was a good idea. I'd just want the information. I'd want to know who runs Cattleback too. If I were a creditor, obviously, I'd really want to know. So you can check my work and verify it for yourself, here: look for yourself, as it's always possible I overlooked something.

Here's the latest 8K, in which SCO reports on the proposed sale of its Unix business:

On October 22, 2007, the Company entered into an agreement whereby a purchaser intends to acquire substantially all assets used by the Company in connection with its SCO UNIX Business and certain related claims in litigation, and to provide financing to the Company, pursuant to Section 363 and 364 of the Bankruptcy Code. On October 23, 2007, the Company filed a motion with the Bankruptcy Court relating to this proposal. The motion, which is on file with the Bankruptcy Court, describes the details of the proposed transaction.

Not a word about the patent or Cattleback. So I thought maybe they mentioned it in an earlier 8K, so I started to read them all. Here's their 8K report on August 13th, three days after the devastating ruling against SCO in Utah and almost a month after the alleged transfer. Not one word. And here's the 8K about the bankruptcy filing, filed on September 14, 2007:

Item 1.03. Bankruptcy or Receivership.

On September 14, 2007, The SCO Group, Inc. and its wholly-owned subsidiary, SCO Operations, Inc. (collectively, the “Company”) filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court, District of Delaware. This Court has jurisdiction over this proceeding as of the date of the filing of the petition. In connection with this proceeding, the Company has filed motions with the Court requesting permission to go forward on a “business as usual” basis as a debtor in possession. Accordingly, the Company continues to have jurisdiction over its assets and business subject to the supervision and orders of the Court. The Company will continue operating and will file a plan of reorganization with the Court.

To do what? And is setting up a new subsidiary, transferring a patent to it without consideration, and without telling anyone, business as usual, particularly if it happens on the eve of bankruptcy?

One of our eyewitnesses at the recent hearing says this about Mr. Spector's representations to the court:

Mr. Spector said that SCO never said that they would keep the Unix business forever. He believes the reorganization plan can go forward without deciding the SUSE issues or the issues in Utah. There are companies out there that would be willing to take a risk in buying the assets without resolution of these issues. Unix is a legacy system that someone else might find profitable. But Unix may not be part of SCO's plans going forward.

Well, which is it? What exactly is the business going to be? We need to wait for the transcript to form permanent conclusions, of course. By the way, aren't SCO's mobile products based on Unix also? If Unix is no longer part of SCO's plans, then its only plans would be the litigation lottery? No? Is that a business plan? I can't understand SCO's explanation of the sale of the assets, but it does seem like they are keeping something to do with Me Inc. And finally here's a notification of late filing, signed by Bert Young on September 17th, which even talked about SCO's unhappy performance ending in July:

Revenue for the three and nine months ended July 31, 2007 decreased by approximately 37% and 24%, respectively, from the three and nine months ended July 31, 2006. The decrease in revenue for the three and nine months ended July 31, 2007 was attributable to continued competitive pressures on the Company’s UNIX products and services as well as from continuing negative publicity related to our lawsuits with Novell and IBM which has adversely impacted our customers’ buying decisions.

The net loss for the three and nine months ended July 31, 2007 improved over the net loss for the three and nine months ended July 31, 2006 as a result of decreased operating costs and a decrease in cost of SCOsource licensing revenue, which were offset by a decrease in revenue as mentioned above .

In short, I have been unable to find any SEC filing that informed shareholders that a patent was transferred to a wholly owned subsidiary without consideration, or even that Cattleback was established.

Update: They filed another 8K today. You'll find the attached exhibits here. Still nothing that I can see.

On the other hand, if you go to the USPTO website, you do find a patent assignment from SCO Group to Cattleback on July 18. And here we find that the patent was obtained by Caldera from Acrylis in January of 2002. The inventors who assigned their interest to Acrylis are listed on that page also, Alan Cantos, Neil Mager, Keith Erskine, Mike Vilot, and Alison Whittier. Were they paid on that sale? If not, why would they be paid on the proposed one? Or is SCO obligated to pay Acrylis? Are they employees of SCO? So what development costs might SCO have been referring to? You can follow all the steps in the early part of the chain if you go here and trace patent application 09/514,488. I gather that the patent was initially refused, and so it may be that Caldera did some work on the patent and/or the application.

You remember Acrylis. We first saw it mentioned by Mike Anderer in the infamous 2003 memo about Microsoft helping SCO that surfaced in March of 2004, where Anderer references an Acrylis-Red Hat examination. Caldera had paid a million dollars to Acrylis in May of 2001 for the assets it acquired:

On May 3, 2001, the Company acquired the WhatifLinux technology from Acrylis, Inc. WhatifLinux technology provides Open Source users and system administrators with Internet-delivered tools and services for faster, more reliable software management. In consideration for the assets acquired from Acrylis, the Company issued 1.25 million shares of common stock and paid $1.0 million in cash.

The shares were valued at $1.95, so that's another 2.4 million.

Let's guess. Here's mine: SCO realized some time around June that the copyright infringement hustle was about over. Utah was on to them, and they had nothing to put on the table worth anything. So what to do? They had had this patent. Could it be resurrected and give new life to the FUD cloud litigation for the future? Let's also guess that York is fronting for someone, Acacia-like at least, who plans to bring a bogo patent infringement action based on this patent that they earlier discounted as having no use for that purpose. You think? That might explain York's eagerness to actually pay for lawyers to show up in Bankruptcy Court to try to get the deal approved. And it would take years to prove the patent was useless against Linux.

And that research and development question leads to something interesting, from Caldera's 10K for the fiscal year ended October 31, 2001:

The increase in research and development expenses from fiscal 2000 to fiscal 2001 was attributable to increased personnel and related costs as a result of the acquisitions of the WhatiIfLinux technology from Acrylis and operations from Tarantella as our personnel focused on the development of Linux and UNIX operating systems....

WRITE-DOWN OF GOODWILL AND INTANGIBLES.

During the fourth quarter of fiscal 2001 we determined that various assets related to the operations acquired from Tarantella and Acrylis were impaired and that the book value as of October 31, 2001 exceeded the current estimates of fair value. As a result, we recorded a $73.7 million write-down of goodwill and intangible assets. The asset write-down is the result of significant unanticipated decreases in actual and forecasted revenue of the acquired operations, a significant decline in market valuations and general economic conditions, particularly in the information technology sector, a weakening of certain partner relationships, the loss of certain key executives and other factors.

Yet here in this 10K for the period ending July 31, 2003, we see what SCO, then Caldera, thought the Acrylis technology was worth. A lot. I can't explain it, folks. I'm just putting bread crumbs on the path for those who follow.

And finally as a reminder, here's what Darl McBride told the US Trustee Joseph McMahon on the record at the 341 meeting about the Acrylis patent:

McMahon: Can you explain to me what Cattleback is and what the patent is?

Darl McBride: The patent's a systems management patent that we acquired when we bought a company back in, I believe it was 2001, called Acrylis. We bought it for the technology. It's an online updating technology and it had this Pending Patent in 2001 that actually issued in 2003. Even though it issued in 2003, because of all the other things we had going on, there wasn't a lot of attention paid to it until earlier this year, where we started looking at our Intellectual Property portfolio and figured out this patent was sitting there and we had some initial workup on it, and established that there was some value there.

I see OSI has removed the Anderer memo, so the link in my article back then no longer resolves, which sadly does not surprise me, but we published the memo contemporaneously also. Here it is again, for the record, and as you can see with your own eyes, Mr. Anderer reports that "there is no upside here" to the Acrylis patent, as it reads to me. In any case, to say they didn't pay much attention to it in 2003 doesn't seem to match the memo. You will see that Anderer says that BayStar invested in SCO because of Microsoft, which BayStar's Larry Goldfarb agreed was true, although Microsoft denies it, in a declaration [PDF] in the SCO v. IBM litigation. Goldfarb said one of his contacts at Microsoft was Rich Emerson:

6. Sometime in 2003, I was approached by Richard Emerson (Microsoft's senior vice president for corporate development and stratedy) about investing in SCO, a company about which I knew little or nothing at the time. Mr. Emerson stated that Microsoft wished to promote SCO and its pending lawsuit about IBM and the Linux operating system. But Microsoft did not want to be seen as attacking IBM or Linux. For that reason, Microsoft wanted to further its interest through independent investors like BayStar.

7. I did some research on SCO, and had conversations with Mr. Emerson about it as well. In the course of my research about SCO, I became concerned that SCO might be merely a litigation company. As a result, Mr. Emerson and I discussed a variety of investment structures wherein Microsoft would "backstop," or guarantee in some way, BayStar's investment. In addition, I had discussions with Kenneth Lustig, Microsoft's managing director of intellectual property and Tivanka Ellawala, from Microsoft's corporate development department regarding the SCO deal. As part of these discussions, Microsoft assured me that it would in some way guarantee BayStar's investment in SCO. However, Microsoft would not agree to put anything in writing on this point.

8. The other managing members of BayStar and I met with Darl McBride of SCO and heard his pitch about SCO's business and SCO's lawsuit against IBM. We also discussed SCO's lawsuit with David Boies from SCO's outside law firm, Boies, Schiller & Flexner LLP. Mr. Boies informed me that he believed that IBM would settle the case fairly quickly.

9. As a result of Microsoft's and SCO's assurances, the other managing members of BayStar and I voted unanimously to make the $50 million investment in SCO. the transaction was completed on October 16, 2003.

Emerson left Microsoft in September of 2003 and went to Evercore, where he's in the Private Equity group. Evercore also does counseling of companies in Chapter 11 bankruptcies, and here's a SEC filing where we find it listed as getting shares in a company, Motient Corp., where Evercore Partners was the financial advisor to the creditors' committee in its reorganization:

Motient's Chapter 11 Filing and Plan of Reorganization

Under our Plan of Reorganization, all then-outstanding shares of our pre-reorganization common stock and all unexercised options and warrants to purchase our pre-reorganization common stock were cancelled. The holders of $335.0 million in senior notes exchanged their notes plus accrued interest for 25,000,000 shares of our new common stock. Some of our other creditors received an aggregate of 97,256 shares of our new common stock in settlement for amounts owed to them. These shares were issued upon completion of the bankruptcy claims process; however, the value of these shares has been recorded in the financial statements as if they had been issued on the effective date of the reorganization. Holders of our pre-reorganization common stock received warrants to purchase an aggregate of approximately 1,496,512 shares of new common stock. The warrants never became exercisable by their terms, and were cancelled on May 1, 2004. All warrants issued to the holders of our pre-reorganization common stock, including those shares held by our 401(k) savings plan, have been recorded in the financial statements as if they had been issued on the effective date of the reorganization. Also, in July 2002, we issued to Evercore Partners LP, financial advisor to the creditors' committee in our reorganization, a warrant to purchase up to 343,450 shares of common stock, at an exercise price of $3.95 per share. The warrant was dated May 1, 2002, and has a term of five years. If the average closing price of our common stock for thirty consecutive trading days is equal to or greater than $20.00, we may require Evercore to exercise the warrant, provided that our common stock is then trading in an established public market. The value of this warrant has been recorded in the financial statements as if it had been issued on May 1, 2002.

And, oddly enough, the following January, York became an investor in that company, or more accurately in a subsidiary:

On January 27, 2003, our wholly-owned subsidiary, Motient Communications, closed a $12.5 million term credit agreement with a group of lenders, including several of our existing stockholders. The lenders include the following entities or their affiliates: M&E Advisors, L.L.C., Bay Harbour Partners, York Capital and Lampe Conway & Co. York Capital is affiliated with James G. Dinan and JGD Management Corp. JGD Management Corp., James G. Dinan, James D. Dondero and Highland Capital Management each hold 5% or more of our common stock. The lenders also include Gary Singer, directly or through one or more entities. Gary Singer is the brother of Steven G. Singer, one of our directors.

Emerson is also on the Board of Directors for Clearwire, and his bio there indicates he is now a Senior Managing Director of Evercore Partners. And as we earlier pointed out, Baystar has Acacia in its portfolio, Acacia being the parent company of the folks suing Novell and Red Hat recently over alleged patent infringement. It was Egan Orian at the Inquirer that pointed out this interesting tidbit:

As a matter of fact, JGD Management Corp., doing business as York Capital Management, shares its street address at 1118 East Green Street in Pasadena, California 91106, with Arrowhead Research Corp. The CEO and Chairman of Arrowhead Research is R. Bruce Stewart, who also founded Acacia Research Corp. Acacia Research is the parent of IP Innovation, the company that recently filed patent infringement lawsuits against Linux distributors Red Hat and Novell. Suddenly all of this ties together and becomes clearer.
And just to bring it full circle, two of the founders of IP Innovation are ex-Microsoft executives.

So with that background, let's look at the memo. Here it is. Decide for yourself what you think is going on:

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

--- From the mailbox of chris sontag

From: Mike Anderer
Sent: Sunday, October 12, 2003
To: csontag at sco.com
CC: Bob Bench
Subject: Conversation Friday

Chris:

I know you were going totalk to Bob later Friday, but I figured I would outline the issues.

1) Baystar is easy as they were just a Microsoft referral and would be 2%

2) Any licensing deal would be at 5%

3) Much of the other work would go from 2% to 3% as I have engaged in direct, but this would require according to Bob either Darl or you signing off on the fact that this ane was not a referral.

4) On the patent side for IPX, where foes that fit it. I am working with the lawyers to get these moved from provisional to more complete in the next week. I think it will spawn at least 3 patents. Ed and I are the inventors on these. What do we fo here

5) The RedHat, Acrylis examiniation, there is no upside here is this billable seperatly. I bought a PC and loaded up RedHat and will take that over and work through it with the Lawfirm. What do we do here?

I realize the last negotiations are not as much fun, but Microsoft will have brough in $86 million for us including Baystar. The next deal we should be able to get from $16-20, but it will be brutial as it is for go to makerket work and some licences. I know we can do this , if everyone stays on board and still wants to do a deal. I just want to get this deal and move away from corp dev and out into the marketing andfield dollars....In this market we can get $3-5 million in incremental deals and not have to go through the gauntlet which will get tougher next week with the SR VP's.

We should line up some small acquisitions here to jump start this if we do it. We shoudl also do this ASAP. Microsoft also indicated there was a lot more money out there and they would clearly rather use Baystar"like" entities to help us get signifigantly more money if we want to grow further or do acquisitions

This Microsoft deal is the Ante to the poker game...We should get this done and go after several $2-3 Million deals from the expense side of their company.

The will help us a lot and if we execute we could exit and Unix componients we have build potentially back to Microsoft or MCS. I think they are on track and may not be able to push much more this round, but there are other ways to get money from them, their partners, investment bank referrals, etc..

Do kepp in mind that they have brough us between $82 million and $86 million if this deal is between $4million per quarter where Rich is at, or it turns into %5 million wjich is the lowest number Chris had interest in.

There will be more, lons, partnerships, etc..but we need to just get this one done. It is too high profile, it is also critical, but they are not the people to pitch. We should get what we can from them ad then work the other and larger areas of the company and groups where they have real budget and need for our help.

.Let me know your thoughts.

-Mike


  


Searching for Cattleback - Updated - The Acrylis Connection | 302 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here please.
Authored by: billyskank on Thursday, November 08 2007 @ 01:36 PM EST
I'll see if somebody posts the off-topic thread in the next 45 seconds. :)

---
It's not the software that's free; it's you.

[ Reply to This | # ]

Off topic thread postings here.
Authored by: billyskank on Thursday, November 08 2007 @ 01:37 PM EST
Let's have your unrelated matters!

---
It's not the software that's free; it's you.

[ Reply to This | # ]

Do companies just pop into existance...
Authored by: Anonymous on Thursday, November 08 2007 @ 01:39 PM EST
...out of thin air? SCO created this subsidiary "company" on advice
of York for the sole purpose of "selling" the patent. This is a
"shell" company by every definition of the word. It has no assets
other than the patent, it has no headquarters, all of the officers are (likely)
also SCO officers. Is any of this legal?

[ Reply to This | # ]

Comments on NewsPicks here.
Authored by: billyskank on Thursday, November 08 2007 @ 01:49 PM EST
Thank you.

---
It's not the software that's free; it's you.

[ Reply to This | # ]

Searching for Cattleback
Authored by: Jamis on Thursday, November 08 2007 @ 01:56 PM EST
I find it most curious that nearly every search hit for Cattleback Holdings
comes up with a tie to Groklaw. I used several different search engines too.

[ Reply to This | # ]

There are two separate issues here
Authored by: Anonymous on Thursday, November 08 2007 @ 01:59 PM EST

Should SCO have reported the transfer in its SEC filings, and was the transfer improper because it was made "without consideration?"

Leaving aside the first issue, the second one is a red herring. The consideration that SCO received for transferring a patent to Cattleback was a sole interest in Cattleback's revenue. What other consideration could there have been? When Cattleback sold the patent, the net proceeds were passed through to SCO. That's how all holding companies work. There may be problems with the transfer for other reasons, but lack of "consideration" isn't one of them.

[ Reply to This | # ]

Dowsing for Cattleback
Authored by: WhiteFang on Thursday, November 08 2007 @ 02:04 PM EST
I'm reminded of phrases like:

"Where's the beef?", "Find the Pea!" or even "Are we
there yet?"

{shakes head}

Given the massive public exposure, the amount of suspicious manuevering on the
part of SCOX still hasn't ceased to amaze me.

---
"When listening to MS, always remember the tongue speaking is forked." -
gormanly

[ Reply to This | # ]

  • Maneuverings - Authored by: Anonymous on Thursday, November 08 2007 @ 02:18 PM EST
CATTLEBACK INTELLECTUAL PROPERTY HOLDINGS, INC.
Authored by: Anonymous on Thursday, November 08 2007 @ 02:06 PM EST

A Delaware corporation search yields this:

CATTLEBACK INTELLECTUAL PROPERTY HOLDINGS, INC.
Incorporation Date / Formation Date: 07/16/2007
File Number: 4389925

Registered agent is THE CORPORATION TRUST COMPANY, a mail-handling operation for Delaware corporations.

For $20, you can find out who the company officers are.

[ Reply to This | # ]

Good Points, It makes you wonder if the Investors Really care..
Authored by: Anonymous on Thursday, November 08 2007 @ 02:07 PM EST
If they cared they should have said something by now. I wonder if the investors
are all in with SCO. Perhaps if one of us invested in SCO and filed a lawsuit
against SCO. I don't think any of the current investors care about what SCO is
doing.

[ Reply to This | # ]

We may be looking at this backwards
Authored by: Anonymous on Thursday, November 08 2007 @ 02:58 PM EST
We've been looking at this as an attempted asset raid - as a way of selling a patent that is worth more than $500K for only $500K, so that somebody gets a sweetheart deal and Novell doesn't get their money.

But what if that's not the game? What if the patent is worth less than $500K?

What if the patent's worth $0?

I'm starting to wonder if the game isn't more along these lines: Keep the Novell case stayed, because SCO's in bankruptcy. Or else don't pay Novell, because SCO doesn't have enough money to do so. But get the IBM case moving again, and use the Cattleback sale to keep funding the lawsuit. And keep Novell from getting the money from the Cattleback sale, because Cattleback is a separate, non-bankrupt subsidiary.

Back in the real universe, there are several reasons why this scheme is quite unlikely to fly. But if this scenario is correct, then the PIPE fairy is probably the purchaser.

MSS2

[ Reply to This | # ]

Misleading 1st Day Declaration by Darl
Authored by: DaveJakeman on Thursday, November 08 2007 @ 02:58 PM EST

In SCO's admission to the court [PDF], they refer to Cattleback by its full and proper title, namely: "Cattleback Intellectual Property Holdings, Inc."

In Darl's 1st Day Declaration [PDF], he refers to it only as "Cattleback Holdings, Inc."

In his declaration, if Darl had included the "Intellectual Property" part of the title, that would have been a dead giveaway, wouldn't it? One get's the distinct impression SCO were deliberately trying to hide this and their admission has been flush out by the US Trustee's inquiries.

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

[ Reply to This | # ]

Well, which is it?
Authored by: Yossarian on Thursday, November 08 2007 @ 02:59 PM EST
Both.

SCO is so small that it can be a particle and a wave in
the same time.

[ Reply to This | # ]

So, do I get a check?
Authored by: keith.erskine on Thursday, November 08 2007 @ 03:00 PM EST
So here I am, writing test plans for my new startup, and I decide to see what's
up with my old company Caldera, er, SCO. And don't you know, I see that they're
selling MY PATENT.

OK, it's not MY patent, it was OUR patent (one of the other inventors is a
co-founder with me). The only thing I ever got out of it was the experience
filing it (which is good experience!!) and a nice mention of the accomplishment
on my resume.

So PJ, it says they're going to pay off the inventors? Really?? :)

Best Regards, and Thanks for making my day different....Keith Erskine

[ Reply to This | # ]

What's in a name
Authored by: Anonymous on Thursday, November 08 2007 @ 03:08 PM EST
I'm amused by the name "Cattleback." Anyone remember McBride's
remark, "We went out one day and our Unix cows were missing"? I'm
thinking that patents are how he's currectly hoping to get his cattle back.

[ Reply to This | # ]

Potential problem here
Authored by: Wardo on Thursday, November 08 2007 @ 03:10 PM EST

According to the USPTO, the patent (6,529,784) is assigned to "Caldera Systems, Inc. (Orem, UT)".

There are a couple possibilities here, primarily that the changes in ownership from Caldera to SCO to Cattleback were not registered in the online version linked to above. The second possibility I see is that the patent wasn't legally transferred, something tSCOg has overlooked in the past. Third possibility is the range somewhere in between.

My memory for names is fuzzy, so I don't recall if Caldera Systems was the company that became tSCOg, or renamed itself and went about it's own business after selling the UNIX business to tSCOg's predecessor. That wouldn't get tSCOg out of an official transfer document to give the patent to Cattleback though...

Or, am I just looking in the wrong place for the transfer of assignee? Do changes in assignment have to be registered with the USPTO? ISTR that the requirement for Novell to trasfer was a written instrument specifying which patents were transferring. But I don't have a sure grasp about a requirement to tell the patent office about the transfer.

Wardo

tried to make a clickie to the patent, but the forum reinterpreted one of the query special characters...

---
caveat lector...
Wardo = new user(lawyer = FALSE,badTypist = TRUE,badSpeller = TRUE);

[ Reply to This | # ]

Cattleback , obviously a reference...
Authored by: Anonymous on Thursday, November 08 2007 @ 03:17 PM EST
...to how darl and his brother got their cattleback when they were
misappropriated which is kinda darl's raison d'etre or so it would seem. i
wonder about how the real story goes.

i'm guessing that darl and friends are going to try to get their cattleback once
again.

[ Reply to This | # ]

Your Speculation
Authored by: rsteinmetz70112 on Thursday, November 08 2007 @ 04:06 PM EST
I think your speculation that York is fronting for someone may be correct, if
they could pull off the purchase as proposed the litigation could just keep
sailing along, although York actually has real money and if there were a
judgment against them in future cases, York could afford to pay.

I seriously doubt York would go to all of this trouble for a $500,000 patent.
Patent trolls can get bogus patents many places, going after SCO's one forlorn
patent seems excessive, and the amount of money involved seems too little to
float the SS Litigation very long. There just doesn't seem much point.

I think York was looking to pick up SCO's OpenServer business on the cheap and
make a few buck on a resale or in the alternate get some fees from the eventual
sale of SCO's real assets. Typical Wall Street bottom feeding.

---
Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

  • I wonder - Authored by: Anonymous on Thursday, November 08 2007 @ 06:38 PM EST
  • Your Speculation - Authored by: Anonymous on Thursday, November 08 2007 @ 07:31 PM EST
Where did Cattleback get their start up money
Authored by: Chris Lingard on Thursday, November 08 2007 @ 04:17 PM EST

Suddenly this subsidiary appears that has $500000 to pay for SCO's one and only patent. The company is new, has no sales or income. There is no record of shares issued to raise the companies capital.

Have SCO salted away millions prior to the bankruptcy and the payment for the patent is just a front. And these would be millions on Novell's money.

[ Reply to This | # ]

Death of a salesman
Authored by: Anonymous on Thursday, November 08 2007 @ 06:32 PM EST
This is a Stats_for_all post from Y! SCOX, I am reprinting this because it relates to Acrylis. A suicide after the unraveling of a Southern California investment scheme points back to Caldera and Reg Broughton.

On March 10, 2003, four former business associates of Reg Broughton filed suit against *Caldera International, Inc*, Acrylis, Inc, Uniprise, Inc, SYS Inc, William Zures, and Robert D. Morwry charging fraud and misappropriation. The suit was filed in Ca Superior Court, County of Orange. $980K in damages were sought. (#1)

I can find no record that this lawsuit against Caldera has been previously reported. [ed. in original Stats post]

Uniprise was the Irvine California based software company originally affiliated with Reg Broughton's Massachusettes development lab. It marketed a compiler for PL/I on DEC mainframes and a proto SQL tool called Access/DAL. It shut down in Fall of 1998. (#3)

Acrylis was Reg Broughton's Software company based in North Chelmsford, Ma. It spun off the database tool of Uniprise at the time of dissolution. Acrylis acquired the Seagate software AppContol which it developed into the update tool "WhatifLinux" anounced in April 2000. On May 14, 2001, Acrylis was acquired by Caldera, and the Acrylis headquarters was shuttered sometime in 2002. The Arcylis (ex Seagate) patent and technology figures in the Anderer letter and M$FT license sale. (#7, 8)

William Zures was Chairman of the Board of Acrylis and had a reportedly "substantial investment" in the company prior to the Caldera buyout. (#4, #5, #6)

On May 25, 2004, William Zures committed suicide by carbon monoxide as a northern San Diego beach. Post-mortems show he had invested perhaps $50MM secured from investors. Only $10MM could be accounted for following his death. Fellow parish members at his church had kicked in at least $700K, and he had solicited investments from fellow churchmembers worldwide.

SYS, Inc (SYYS.ob) was dismissed from the suit on April 21, 2004. I have no information on the status of Caldera, Acrylis or surviving defendants. (#2)


Sources:
(1) www.secgov/Archives/edgar/data/96057/000110465903021732/a03-36 67_110ksb.htm

(2) www.secgov/Archives/edgar/data/96057/000110465904013592/a04-56 27_110qsb.htm

(3) web.archiveorg/web/19980214171711/uniprise.com/info.html

(4) In Google Cache for search on e3mil.com + Zures 104/ >http://66.102.7104/
search?q=cache:HX-pzpT O9ksJ:www.zoominfo.com/directory/Alan_Napleton.htm+e3mi ll&hl=en%20target=nw

(5) www.sdreader com/php/cityshow.php?id=C080504

(6) www.sdreader com/php/cityshow.php?id=C062404

(7) web.archive org/web/19991128094058/www.acrylis.com/pr-AppControl.ht m
(8) www.businesswire com/cgi-bin/f_headline.cgi?bw.051401/211342084&ti

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I'm getting dizzy...
Authored by: JamesK on Thursday, November 08 2007 @ 06:41 PM EST
trying to follow the path through all those circles. It's curious that the same
names keep popping up along with all the connections to Microsoft!

The more this drags out, the greater the stench from Redmond.


---
-rw-rw-rw- are the permissions of the beast.

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Acrylis Patent and Hipcheck
Authored by: Anonymous on Thursday, November 08 2007 @ 07:10 PM EST
So what to do? They had had this patent. Could it be resurrected and give new life to the FUD cloud litigation for the future?
It's likely that HipCheck is related to this patent. In other words, Hipcheck may be worthless without a patent license. If SCO keeps Hipcheck they may have to then purchase a patent license from the new owner. That situation could then be used to justify funneling cash out of the company as normal operating expenses (patent license fees). If SCO can remain in bankruptcy protection for several years, they could siphon off a considerable amount of the remaining cash into the new vehicle. By the time the bankruptcy is wound up, there would be no assets left in SCO at all.

Sale of this patent may have serious consequences for the creditors, and for Novell. The sale should be disallowed until SCO comes up with a viable business plan dealing with all their assets. If the alternative is liquidation, then more value may be returned to the creditors buy bundling some assets together (Hipcheck with the patent) than by selling them separately.

An alternative explanation could be that sale of the patent will be used to force the sale of Hipcheck to a specific party when SCO is finally liquidated. If Hipcheck is worthless without a patent license, then the new patent holder would have an effective veto over any bids. With only one bidder, the sale price for Hipcheck might be very low.

The new buyer for Hipcheck wouldn't need to be the new patent owner. They just need to have negotiated an exclusive license to it on favourable terms. That might take a bit of foresight to plan all this ahead, but lets assume the buyer was well acquainted with SCO. If the owners of the new company buying Hipcheck just happen to be Ralf Yarrow and Darl McBride, they would have scarpered off with the only real business asset they though was worth salvaging from the wreckage. They would have got their "cattle back" (or at least a few calves).

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Searching for Cattleback - Updated - The Acrylis Connection
Authored by: Anonymous on Thursday, November 08 2007 @ 07:23 PM EST
I keep noticing ex M$ execs being involved with businesses
that seem to have it in for OSS. Two questions come to mind.

1) If M$ is so great, why do they leave?
2) Is there a long term plan by those high in M$ to
spawn off other business entities having overseers
that are actually just M$ puppets?

Perhaps BG has been thinking in the long term, as well
as the immediate future, and has planned much of this.
It seems to have been going on for quite some time.




[ Reply to This | # ]

Original SCO and Novell Agreements
Authored by: Anonymous on Thursday, November 08 2007 @ 07:27 PM EST
I am looking through things, but I seem to recall that Novell had some say about
the transder of the UNIX business to another company. I can't remember where I
saw it, but I assume that in bankruptcy that new SCO can skip out on prior
agreements??

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Searching for Cattleback - Updated - The Acrylis Connection
Authored by: Anonymous on Thursday, November 08 2007 @ 07:39 PM EST
I have several patents. All of them have been sold at least once to different
companies. I received, and expect to receive, nothing from these sales. I
assigned the patents to my employer at the time they were written. For some of
them I received a bonus for the filing and/or when the patent was issued. For
others I received a plaque when it was issued (some companies are cheap). The
depressing part is that one of them is now held by a company that is (or is very
close to being) a patent troll company. If they use it to sue people then I
will receive nothing. It is no longer my property so why should I receive
anything?

Saying that the inventors will be paid for this transfer is very odd. I've
never heard of this before, at least not when people aren't involved with the
companies (officers, etc.).

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Why Are So Many Surprised About Everything
Authored by: Anonymous on Thursday, November 08 2007 @ 08:01 PM EST
I am a little surprised that some here are surprised about the events - the
twists and turns - connected to SCO being covered here.

If anyone reads any history - there will understand that everything covered
here - is just business as usual in the USA. It's been going on for hundreds of
years.

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What About Royalties?
Authored by: Anonymous on Thursday, November 08 2007 @ 08:17 PM EST
Cattleback gets paid for the patent and pays SCO $570,000, the full amount offered,
What about royalties? What if the bidder offers $570,000 in cash, but also owes some regular sum of money to Cattleback based on a percentage of licensing income?

The $570,000 might get paid to SCO, but the royalties get paid to Cattleback. That is outside the judge's control. Even if Cattleback has to forward royalties to SCO, no doubt the management of Cattleback would need to be paid for their fine efforts. This would include salary, expenses, bonuses, etc. All performance related of course. It would be a shame if management expenses took up all the revenue though.

Then they just need to find someone who would like a license. Perhaps a Microsoft partner could use one.

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How long will SCO's management be left in place?
Authored by: Anonymous on Thursday, November 08 2007 @ 08:57 PM EST

SCO's antics post-filing seems to make it obvious that the
management needs to be ousted. I'm still amazed that SCO
is still a debtor in possession.

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Searching for Cattleback - Updated - The Acrylis Connection
Authored by: Anonymous on Thursday, November 08 2007 @ 11:32 PM EST
I think what we may have here is 'ring-fencing'. It is, if I understand it
correctly, a legal method (not moral by any means) of separating property,
normally real property or company funds, from the not so long arms of the court
or creditor or both. It protects the real property or funds from capture.

Pacific Gas and Electric Corp. (P.G. & E.) did the very same thing when they
went bankrupt in California several years ago. And they got away with it --
completely.

krp

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Canopy feedback
Authored by: Anonymous on Friday, November 09 2007 @ 12:19 AM EST
Canopy companies that managed to go public and draw in public investor cash had
a very strange but oft repeated pattern of buying out pre-ipo and failing Canopy
companies.

The cynic would say this was a way Canopy used their control of the public
companies to push outside investor money back into Canopy pockets. Post IPO
Caldera/SCO bought out a number of other pre-ipo Canopy projects.

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The PIPE Troll-Fairy waves the wand of millions
Authored by: webster on Friday, November 09 2007 @ 12:25 AM EST
..
1. The Anderer letter has been out for years. It confirms the premise that the
Monopoly is behind the attacks on Linux. So much for our government protecting
us. Someone, or some class, is going to have to sue the bunch of them,
including the monopoly, to end it. To them, patent trolling is just business as
usual. With monopoly millions they can plant lawsuits like IED's and clear the
way for the monopoly OS and their innovative repression.

2. IBM has this letter and many more. They have had opportunity to depose the
witnesses. They can make hay with these materials. They are devastating. SCO
went after Linux with nothing causing years of retarded growth and up to a
billion or more in losses. Those billions went to who? Not SCO. Their
sponsor, perhaps. If someone could get it to a jury, the monopoly might change
hands.

3. The article today is astounding. One would give all credit to PJ, but she
credits others. There was a time a few short years ago when few would
understand, no one could quickly compile and no one would believe. Most would
be afraid to act.

4. The article above bears reading several times. The monopoly operates with
impunity. They are omnipotent. The companies, financiers, Judges, lawyers,
patents, copyrights, journalists, retailers, politicians are all their pawns.
Their executive says something, a journalist echoes it, a companies sues ... and
they create their own truth. Their FUD is made into the reality. Fear Linux
because you can get sued. You shouldn't buy it. It's not compatible. It
doesn't interoperate. Even "IBM recommends..." monopoly software.

5. The monopoly software is innovative. It is secure. It is compatible.
Retailers recommend it because it is good. It is reasonable priced. It is not
bloated and it runs on modest hardware. All of this is true because everyone
believes it. The masses are uninterested or brainwashed, the rest compliant.
No doubt Putin envies the monopoly but he can work on it and copy.

6. In order to maintain the monopoly, by definition, they have to destroy
everything else. Google, IBM, Linux companies and in some areas Apple are
threats worthy of destruction. They can't be too blatant about it so SCO and
the trolls will have to do. How long will 200 patent suits take?

7. Sorry to repeat over the years, but the truth keeps struggling to surface
and more people are happening upon it. The Anderer letter reproduced above is
of immense significance. It has been corroborated. Everyone mentioned can be
questioned about it and asked to explain. You can then follow the explanations
and ask others to explain and corroborate. You can ask for the significance of
$86 million. That is $86 million to bring claims with no specified evidence,
for which summary judgments have been granted, for which no real experts were
consulted, for which their own internal memos concluded no infringing code, and
for which no due diligence was done to determine the above.

8. So, Linux powers, is the situation helpless? Can there be a counterstrike?
Must it include the monopoly source and individuals to make it stop? Will the
government help after the election? One monopoly's business is another's
conspiracy. PJ's light is getting pretty bright even behind the corporate veil.

---
webster

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Probably a type when registering the cooperation ...
Authored by: Anonymous on Friday, November 09 2007 @ 01:43 AM EST
... instead of "Cattleback" they meant "Cattlebut".

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  • Kettle-Black? - Authored by: Anonymous on Friday, November 09 2007 @ 07:15 PM EST
Interesting Quote
Authored by: VivianC on Saturday, November 10 2007 @ 06:59 PM EST
I was reading the latest edition of Computer World (Nov 5, 2007, p.20) and it
has a brief interview with Darl McBride in the section called "The
Grill". It isn't posted on the web yet but should be in a week or so.
Anyway, there is Dossier section that gives a little detail about the person
being "grilled" and asks a few personal questions. I found this answer
to be interesting:

Most Recently Watched Movie: 3:10 to Yuma. (Favorite Line: "I don't want no
trouble. I just want my cows back.")

Cows back? Cattleback? Just rang a bell for me.

[ Reply to This | # ]

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