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US Trustee Objects to SCO's Proposed Asset Sale and more |
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Wednesday, November 14 2007 @ 12:27 AM EST
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The US Trustee has filed two objections, one to the asset sale, the terms of which it calls unreasonable, and one to the use of the temp agency to hire a CFO. I am feeling like the unraveling has begun. There are more filings, but nothing like this! So without delay, here these two are: Enjoy! I'll post the rest as soon as I can.
And here's everything:
196 -
Filed & Entered: 11/07/2007
Affidavit/Declaration of Service
Docket Text: Affidavit/Declaration of Service (and Service List) Regarding [Signed] Order Approving the Employment of Mesirow Financial Consulting, LLC as Financial Advisors to the Debtors (related document(s)[190] ) Filed by The SCO Group, Inc.. (O'Neill, James)
197 -
Filed & Entered: 11/07/2007
Affidavit/Declaration of Service
Docket Text: Affidavit/Declaration of Service (and Service List) Regarding [Signed] Order Authorizing Retention of Professionals Utilized in the Ordinary Course of Business Pursuant to Sections 327 and 328 of the Bankruptcy Code (related document(s)[192] ) Filed by The SCO Group, Inc.. (O'Neill, James)
198 -
Filed & Entered: 11/08/2007
Order on Motion to Appear pro hac vice
Docket Text: Order Granting Motion for Admission pro hac vice of Scott H. McNutt, Esquire. (Related Doc # [195]) Order Signed on 11/7/2007. (LCN, )
199 -
Filed & Entered: 11/09/2007
Certification of Counsel
Docket Text: Certification of Counsel Regarding Order Granting Debtor The SCO Group Inc.'s Motion to Enforce the Automatic Stay (related document(s)[69] ) Filed by The SCO Group, Inc.. (Attachments: # (1) Exhibit A) (O'Neill, James)
200 -
Filed & Entered: 11/09/2007
Certification of Counsel
Docket Text: Certification of Counsel Regarding Order Denying Novell, Inc.'s Motion for Order Directing the Debtors to Remit Undisputed Future SVRX Royalties to Novell Upon Receipt (related document(s)[90] ) Filed by The SCO Group, Inc.. (Attachments: # (1) Exhibit A) (O'Neill, James)
201 -
Filed & Entered: 11/13/2007
Objection
Docket Text: Objection to Debtors' Motion for Approval of Employment of CFO Solutions to Furnish Chief Financial Officer to the Debtors (related document(s)[139] ) Filed by United States Trustee (Attachments: # (1) Exhibit A -- Crisis management protocol# (2) Certificate of Service) (McMahon Jr., Joseph)
202 -
Filed & Entered: 11/13/2007
Objection
Docket Text: Objection to Emergency Motion of the Debtors for An Order (A) Approving Asset Purchase Agreement, (B) Establishing Sale and Bidding Procedures, and (C) Approving the Form and Manner of Notice of Sale (related document(s)[149] ) Filed by United States Trustee (Attachments: # (1) Certificate of Service) (McMahon Jr., Joseph)
Here are the two objections as text:
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UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re
THE SCO GROUP, INC., et al.,
Debtors. |
Chapter 11
Case Number 07-11337 (KG)
(Jointly Administered) |
OBJECTION OF THE UNITED STATES TRUSTEE TO THE
EMERGENCY MOTION
OF THE DEBTORS FOR AN ORDER (A) APPROVING ASSET PURCHASE
AGREEMENT, (B) ESTABLISHING SALE AND BIDDING PROCEDURES, AND
(C)
APPROVING THE FORM AND MANNER OF NOTICE OF SALE
(DOCKET ENTRY # 149)
In support of her objection to the emergency motion of the
Debtors for an order (a) approving the asset purchase agreement,
(b) establishing sale and bidding procedures, and (c) approving the
form and manner of notice of the sale (the "Motion"), Kelly Beaudin
Stapleton, United States Trustee for Region 3 ("U.S. Trustee"), by
and through her counsel, avers:
INTRODUCTION
1. Under (i) (an) applicable order(s) of the United States
District Court for the District of Delaware issued pursuant to 28
U.S.C. § 157(a) and (ii) 28 U.S.C. § 157(b)(2)(A), this
Court has jurisdiction to hear and determine the Motion.
2. Under 28 U.S.C. § 586, the U.S. Trustee has an
overarching responsibility to enforce the laws as written by
Congress and interpreted by the courts. See United States
Trustee v. Columbia Gas Sys., Inc. (In re Columbia Gas Sys.,
Inc.), 33 F.3d 294, 295-96 (3d Cir. 1994) (noting that U.S.
Trustee has "public interest standing" under 11 U.S.C. § 307
which goes beyond mere pecuniary interest); Morgenstern v. Revco
D.S., Inc. (In re Revco D.S., Inc.), 898 F.2d 498, 500
(6th
1
Cir. 1990) (describing the U.S. Trustee as a "watchdog").
3. Under 11 U.S.C. § 307, the U.S. Trustee has standing to
be heard on the Motion and the issues raised in this objection.
GROUNDS/BASES FOR RELIEF
4. The U.S. Trustee objects to the Motion on the grounds
identified below.
No Discussion of Marketing Process to Date
5. In the Motion, the Debtors do not provide any details
regarding their efforts to market their assets for sale prior to
executing the Term Sheet with Proposed Purchaser. While such
details are relevant to determining whether the Debtors conducted
the sale process in good faith (an issue that will be addressed at
a later hearing in the event bidding procedures are approved), they
are also relevant to evaluating whether this Court should endorse
the Debtors' suggested timetable for the auction and sale. The
Debtors should make a record regarding their pre-Term Sheet
marketing efforts which justifies the relief they are seeking from
this Court.
Consumer Privacy Under 11 U.S.C. § 363(b)(1)
6. The Motion does not provide sufficient information for the
U.S. Trustee to determine whether a consumer privacy ombudsman
needs to be appointed to protect personally identifiable
information about individuals. 11 U.S.C. § 363(b)(1)
provides:
(b)(1) The trustee, after notice and a hearing, may
use, sell, or lease, other than in the ordinary course of business,
property of the estate, except that if the debtor in connection
with offering a product or a service discloses to an individual a
policy prohibiting the transfer of personally identifiable
information about individuals to persons that are not affiliated
with the debtor and if such policy is in effect on the date of the
commencement of the case, then the trustee may not
sell
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or lease personally identifiable information1 to any person
unless —
(A) such sale or lease is consistent with such policy; or
(B) after appointment of a consumer privacy ombudsman in accordance
with section 332, and after notice and a hearing, the court
approves such sale or such lease —
(i) giving due consideration to the facts, circumstances, and
conditions of such sale or such lease; and
(ii) finding that no showing was made that such sale or such lease
would violate applicable nonbankruptcy law.
7. Under the Term Sheet appended to the Motion, the assets
proposed to be transferred include "all (i) customer and client
lists, vendor lists, catalogues, data relating to vendors,
promotion lists and marketing data and other compilations of names
and requirements, (ii) telephone numbers, internet addresses and
web sites, and (iii) other material information related to Seller's
business." The U.S. Trustee intends to determine whether the
Debtors provide a privacy policy to consumers in connection with
their business and, if so, whether the policy prohibits the
transfer of personally identifiable information to third parties.
The U.S. Trustee will report to the Court on this issue at
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the hearing on the Motion and the related matter of whether a
consumer privacy ombudsman should be appointed.
Break-Up Fee and Expense Reimbursement Provisions
8. Through the Motion, the Debtors are seeking approval of
certain bid protections. In paragraphs 11 and 12 of the Motion, the
Debtors state:
The APA and Term Sheet provide that the Seller will
reimburse up to $50,000 of Proposed Purchaser's fees and expenses
(including, without limitation, legal costs and fees) incurred or
to be incurred in connection with the consummation of the
transaction (the "Guaranteed Expense Reimbursement"). Further, if
Purchaser is designated as "stalking horse" under the Bid
Procedures Order, but either: (a) Proposed Purchaser is not the
successful bidder or (b) any of the Transferred Assets are
transferred by Seller to any party other than Proposed Purchaser
(whether pursuant to the Auction or otherwise), then Proposed
Purchaser shall receive from Seller: (i) a cash breakup fee in the
amount of $780,000 (the "Breakup Fee"), and ([ii]) reimbursement of
all expenses incurred by Purchaser, in an amount up to $300,000
(the "Alternative Transaction Expense Reimbursement"), in both
cases payable upon the earlier of consummation of a subsequent
transaction to a party other than Proposed Purchaser or the entry
of a final, non-appealable order confirming a Chapter 1 plan (an
"Alternative Transaction"). In addition, without duplication, if
the APA is terminated other than as a result of a material breach
by Purchaser or the failure to be satisfied of a condition
precedent to closing that is not caused by the material breach of
Seller, and Seller is not obligated to pay the Breakup Fee, then
Seller will nevertheless be obligated to pay the Alternative
Transaction Expense Reimbursement to Purchaser up to a maximum of
$300,000. The Breakup Fee, Guaranteed Expense Reimbursement and
Alternative Transaction Expense Reimbursement shall be treated as
superpriority administrative expenses under 11 U.S.C. §§
503 and 507(a) and paid in cash immediately when due or through the
closing of an Alternative Transaction or when otherwise due and
payable under the APA. (Footnotes omitted).
9. Initially, in the absence of an executed asset purchase
agreement, this Court should not approve the requested bid
protections, as an uncommitted bid does not deserve such
protections.
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10. Under the controlling decision by the United States Court of
Appeals for the Third Circuit in Calpine Corp. v. O'Brien
Environmental Energy, Inc. (In re O'Brien Environmental Energy,
Inc.), 181 F.3d 527 (3d Cir. 1999), there are several problems
with the Debtors' request to have bid protections approved:
(a.) First, the gross amount of the protections, taken together,
are disproportionate to the present value of the bargain. The cash
portion of the proposed transaction — $10 million — is
the only "sure" part of the proposal; the rest of the consideration
to be paid by Proposed Purchaser comes in the form of: (i) a $10
million financing commitment that, if tapped, will be a liability
of the Debtors' estates, (ii) an obligation to share the "upside"
of the Linux litigation in an amount up to $10 million (via a 20%
interest in the proceeds realized from such litigation), and (iii)
up to $6 million in the form of a revenue sharing agreement related
to the Hipcheck product line and Me Inc. Mobile which is tied to
"non-guaranteed" sales targets. Per the Debtors' public filings,
the success of the Linux litigation hinges upon the Debtors'
ability to establish ownership of certain intellectual property
rights, the same rights which the United States District Court for
the District of Utah recently found were owned by Novell. Further,
it is unclear whether Hipcheck and Me Inc. Mobile products are
market-ready. Thus, the bid protections may actually exceed 10% of
the present value of the consideration proposed to be paid under
the transaction and, at a minimum, the protections significantly
exceed the standard range of 2-3% which this Court has used as a
benchmark to determine the appropriate amount of such
protections.
(b.) Second, the payment "triggers" are unreasonable in three
respects. First, Proposed Purchaser should not be receiving a
guaranteed expense reimbursement; all fees should be tied to
consummation of an alternative transaction. Second, the definition
of an "alternative transaction"
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should be restricted in two ways: (i) to the extent that the bid
protections would be tied to the confirmation process, they should
be tied to the effective date of a chapter 11 plan — not the
confirmation of a plan; and (ii) there should be a time frame
running from the bid deadline (i.e., three months) which limits the
Debtors' obligation to pay the bid protections — for example,
if the cases convert to cases under chapter 7 and a trustee sells
the assets at a liquidation price six months from now, the Debtors'
estates will not have received a benefit from the Proposed
Purchaser's "floor" bid in connection with such a sale. Third, to
the extent that this Court approves reimbursement of Proposed
Purchaser's expenses, payment thereof should be subject to the U.S.
Trustee's review of documentation supporting the request.
(c.) Third, there is no legal basis for granting the proposed
bid protections superpriority administrative expense status. 11
U.S.C. §§ 364(c) and 507(b) are the only sections of the
Code which authorize superpriority claim status, and those sections
address (i) the obtaining or incurring of debt in the event that
the debtor-in-possession/trustee is unable to obtain unsecured
credit and (ii) adequate protection of a secured claim which later
proves to be inadequate. See 11 U.S.C. §§ 364(c),
507(b). Clearly, 11 U.S.C. §§ 364(c) and 507(b) do not
apply to the bid protections which the Debtors propose to pay.
Absent authority supporting the argument that this Court has the
authority to elevate bid protections to superpriority
administrative expense status, this Court should reject the
Debtors' proposal.
11. The Debtors' request for "approval" of the asset purchase
agreement is inappropriate. First, approval of the asset purchase
agreement is a sale hearing issue. In the event that bid
protections are approved, the appropriate sections of the asset
purchase agreement may be referenced as "approved" in the bid
procedures order.
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12. In the event that this Court approves bid procedures, the
procedures should expressly provide for the U.S. Trustee's rights
to (i) inspect bids submitted in connection with the sale process
and (ii) attend any auction held pursuant to the procedures.
13. The U.S. Trustee reserves the rights to be heard on and/or
to object to any matters relating to the proposed sale, said
matters being expressly reserved for a subsequent sale hearing.
CONCLUSION
WHEREFORE the UST requests that this Court issue an order
denying the Motion or granting other relief consistent with this
objection.
Respectfully submitted,
KELLY BEAUDIN STAPLETON
UNITED STATES TRUSTEE
BY: /s/ Joseph J. McMahon, Jr.
Joseph J. McMahon, Jr., Esquire (# 4819)
Trial Attorney
United States Department of Justice
Office of the United States Trustee
[address]
[phone]
[fax]
Date: November 13, 2007
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"Personally identifiable information" is defined in 11 U.S.C.
§ 101(41A) as meaning
(A) if provided by an individual to the debtor in
connection with obtaining a product or a service from the debtor
primarily for personal, family, or household purposes —
(i) the first name (or initial) and last name of such individual,
whether given at birth or time of adoption, or resulting from a
lawful change of name;
(ii) the geographical address of a physical place of residence of
such individual;
(iii) an electronic address (including an e-mail address) of such
individual;
(iv) a telephone number dedicated to contacting such individual at
such physical place of residence;
(v) a social security account number issued to such individual;
or
(vi) the account number of a credit card issued to such individual;
or
(B) if identified in connection with 1 or more of the items of
information specified in subparagraph (A) --
(i) a birth date, the number of a certificate of birth or adoption,
or a place of birth; or
(ii) any other information concerning an identified individual
that, if disclosed, will result in contacting or identifying such
individual physically or electronically.
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************************************
UNITED STATES BANKRUPTCY
COURT FOR THE DISTRICT OF DELAWARE
In re Chapter 11
THE SCO GROUP, INC., et al.,
Debtors. Case Number 07-11337 (KG)
(Jointly Administered)
OBJECTION OF THE UNITED STATES TRUSTEE TO THE DEBTORS' MOTION
FOR APPROVAL OF EMPLOYMENT OF CFO SOLUTIONS TO FURNISH CHIEF
FINANCIAL OFFICER TO THE DEBTORS
(DOCKET ENTRY # 139)
In support of her objection to the Debtors' motion for approval of the employment of CFO
Solutions ("CFOS") to furnish the Chief Financial Officer to the Debtors (the "Motion"), Kelly
Beaudin Stapleton, United States Trustee for Region 3 ("U.S. Trustee"), by and through her counsel,
avers:
INTRODUCTION
1. Under (i) (an) applicable order(s) of the United States District Court for the District
of Delaware issued pursuant to 28 U.S.C. § 157(a) and (ii) 28 U.S.C. § 157(b)(2)(A), this Court has
jurisdiction to hear and determine the Motion.
2. Under 28 U.S.C. § 586, the U.S. Trustee has an overarching responsibility to enforce
the laws as written by Congress and interpreted by the courts. See United States Trustee v.
Columbia Gas Sys., Inc. (In re Columbia Gas Sys., Inc.), 33 F.3d 294, 295-96 (3d Cir. 1994) (noting
that U.S. Trustee has "public interest standing" under 11 U.S.C. § 307 which goes beyond mere
pecuniary interest); Morgenstern v. Revco D.S., Inc. (In re Revco D.S., Inc.), 898 F.2d 498, 500 (6th
1
Cir. 1990) (describing the U.S. Trustee as a "watchdog").
3. Under 11 U.S.C. § 307, the U.S. Trustee has standing to be heard on the Motion and
the issues raised in this objection.
GROUNDS/BASES FOR RELIEF
4. The U.S. Trustee objects to the Motion on the grounds identified below.
5. In evaluating requests by debtors in possession to temporarily employ officers
pursuant to 11 U.S.C. § 363, this Court has generally followed a "crisis management protocol" that
was the outgrowth of litigation initiated by the U.S. Trustee several years ago. A copy of the
protocol is attached as Exhibit A.
6. Prior to filing this objection, the U.S. Trustee approached the Debtors and sought the
Debtors' agreement that certain provisions of the crisis management protocol would apply to the
proposed engagement. Those provisions are as follows:
(a.) "One hat" --The protocol requires that the firm providing the temporary employee
(the "Furnishing Firm" agree that it will only serve in that one capacity in the
case(s) at issue. Ex. A ¶ 1(A).
(b.) No service as director -- The protocol requires that the Furnishing Firm agree that its
personnel will not serve as directors during the case(s) at issue. Ex. A ¶ 1(D),
1(E)(3) n.3.
(c.) Initial/continuing disclosure of connections -- The protocol provides that the
Furnishing Firm will disclose connections with parties in interest and update that
disclosure periodically. Ex. A ¶ 1(E, F).
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(d.) Quarterly review of compensation/reimbursement paid -- The protocol requires
quarterly review of compensation/reimbursement paid to the Furnishing Firm, with
an opportunity for parties in interest to object. Ex. A ¶ 2(C).
(e.) Indemnity for officers, but no indemnity for firm -- The protocol provides that, to the
extent that personnel provided by the Furnishing Firm will serve as officers, such
personnel will receive indemnity consistent with that provided to other officers under
corporate bylaws. The protocol also expressly requires that the Furnishing Firm will
not be indemnified. Ex. A ¶ 3.
7. The U.S. Trustee understands that the Debtors are presently not willing to agree to
any of the aforementioned provisions. The U.S. Trustee believes that this Court has the inherent
authority to condition its approval of the employment of temporary executive personnel by a chapter
11 debtor in possession on the Debtors' conformity with accepted practice within this District.
Accordingly, the U.S. Trustee objects to the Motion to the extent the Debtors and/or CFOS are not
willing to comply with the crisis management protocol.
[Continued on next page -- space intentionally left blank]
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CONCLUSION
WHEREFORE the UST requests that this Court issue an order denying the Motion or
granting other relief consistent with this objection.
Respectfully submitted,
KELLY BEAUDIN STAPLETON
UNITED STATES TRUSTEE
BY: /s/ Joseph J. McMahon, Jr.
Joseph J. McMahon, Jr., Esquire (# 4819)
Trial Attorney
United States Department of Justice
Office of the United States Trustee
[address, phone, fax]
Date: November 13, 2007
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Authored by: russellphoto on Wednesday, November 14 2007 @ 12:47 AM EST |
Please make links clickable.
Russellphoto
"I wish I had 10 friends like you, cause I have 20."[ Reply to This | # ]
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Authored by: russellphoto on Wednesday, November 14 2007 @ 12:49 AM EST |
Please post the title of your news with your postings.
Russellphoto
"I drank what?" -- Socrates[ Reply to This | # ]
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Authored by: perpetualLurker on Wednesday, November 14 2007 @ 12:50 AM EST |
Comments in the title, please.....
.................pL..................
---
"Work like you don't need the money. Love like you've never been hurt. Dance
like nobody's watching." -- Leroy "Satchel" Paige
[ Reply to This | # ]
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Authored by: thatseattleguy on Wednesday, November 14 2007 @ 12:57 AM EST |
All I can say is...wow. Reading through #202 (the objection to the asset sale),
I wasn't sure if I was reading something that the Trustee had written - or if
somehow my browser had cross-linked to Novell and IBM's filings on the same
issue. Large sections sound like verbatim copies of what the Nazgul and MoFo
had already told the court.
It's getting very, very interesting - and for once, really fun - out there...[ Reply to This | # ]
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Authored by: thatseattleguy on Wednesday, November 14 2007 @ 01:14 AM EST |
From #201:
The U.S. Trustee understands that the Debtors are presently
not willing to
agree to any of the aforementioned
provisions...
Seven standard provisions relating to hiring temporary
employees when
you're in Chapter 11, and SCO doesn't want to agree to even
one of
them?
Aside whether that's reasonable and fair, it sure
doesn't seem at all- well,
rational to show this kind of cheek and
defiance to the Trustee over
something that's really trivial in the big
picture. Especially when you're going
to have to work closely with them, and
get some assumption of your own
good faith from them, over the coming months
and beyond. Why start out
your relationship, and get them working against you,
with a stupid fight over
something you could easily give in on?
So the
perennial question, again: what exactly is SCO thinking, and just what
are they
hoping to accomplish by this particular course of action? [ Reply to This | # ]
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- its called drag it on and on and on and on.... - Authored by: Anonymous on Wednesday, November 14 2007 @ 01:19 AM EST
- US Trustee Objects to SCO's Proposed Asset Sale and more - Authored by: Anonymous on Wednesday, November 14 2007 @ 01:37 AM EST
- Five surely? - Authored by: Anonymous on Wednesday, November 14 2007 @ 03:09 AM EST
- US Trustee Objects to SCO's Proposed Asset Sale and more - Authored by: bezz on Wednesday, November 14 2007 @ 04:02 AM EST
- Another straw man - Authored by: justjeff on Wednesday, November 14 2007 @ 06:39 AM EST
- Another straw man - Authored by: Anonymous on Wednesday, November 14 2007 @ 11:03 AM EST
- US Trustee Objects to SCO's Employment of CFO - Authored by: ChrisP on Wednesday, November 14 2007 @ 06:44 AM EST
- Some sort of dogma? - Authored by: Anonymous on Wednesday, November 14 2007 @ 09:48 AM EST
- Canopy Group - Authored by: TheElf on Wednesday, November 14 2007 @ 10:19 AM EST
- TSCOG declines terms - Authored by: tangomike on Wednesday, November 14 2007 @ 11:51 AM EST
- Summary - Authored by: Anonymous on Wednesday, November 14 2007 @ 12:09 PM EST
- US Trustee Objects to SCO's Proposed Asset Sale and more - Authored by: darthaggie on Wednesday, November 14 2007 @ 12:12 PM EST
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Authored by: Anonymous on Wednesday, November 14 2007 @ 01:28 AM EST |
I would have stayed in the frying pan if I were SCO. Interesting objections in
#202 about privacy - not sure if this was fully treated in IBM's objections.
But this impartial opposition does not bode well for SCO's chances of keeping
Novell's assests out of reach. Can't wait till the next hearing. Ho ho ho![ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 14 2007 @ 01:38 AM EST |
"Per the Debtors’ public filings, the success of the Linux
"litigation hinges upon the Debtors’ ability to establish
"ownership of certain intellectual property rights,
"the same rights which the United States District Court
"for the District of Utah recently found were owned by Novell.
"Further, it is unclear whether Hipcheck and Me Inc. Mobile
"products are market-ready."
IOW you can't sell something you haven't got, at least not while
you're in BK and we're watching. Oh, and BTW those
bid protections are about 4 times what this court usually
approves. Why is there a smell of fish?[ Reply to This | # ]
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Authored by: dio gratia on Wednesday, November 14 2007 @ 01:50 AM EST |
So, which comes first Chapter 7, or a case trustee and examiner?
[ Reply to This | # ]
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Authored by: thorpie on Wednesday, November 14 2007 @ 02:51 AM EST |
Anyone have any idea on what appeals to the Bankruptcy Court decisions are
like?
I mean can they cause this to drag on. When the judge permits
Kimball to proceed, and permits the arbitration to proceed, will they be able to
delay the implementation by appealing?
Any ideas?
--- The
memories of a man in his old age are the deeds of a man in his prime - Floyd,
Pink [ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 14 2007 @ 03:21 AM EST |
We've talked about "Nazgul", but this is on a different level. This is
like the cold clear Eye of Sauron has focused pitilessly on SCO. This is some
high-class lawyerin' we're getting now, this is no-holds-barred stuff.
IBM and Novell and everyone else had to walk on eggshells and not hurt SCO's
feelings for so long. Now the U.S. Cavalry has come over the hill with guns
blazing.
Metaphors and arbitray references mixed while you wait.[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 14 2007 @ 04:05 AM EST |
While such details are relevant to determining whether the Debtors
conducted the sale process in good faith (an issue that will be addressed at a
later hearing in the event bidding procedures are approved), they are also
relevant to evaluating whether this Court should endorse the Debtors' suggested
timetable for the auction and sale. The Debtors should make a record regarding
their pre-Term Sheet marketing efforts which justifies the relief they are
seeking from this Court. Consumer Privacy Under 11 U.S.C. §
363(b)(1)
The trustee hasn't accused them of bad faith. The
trustee has, however, pointed out that they haven't demonstrated good faith.
[ Reply to This | # ]
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Authored by: Ian Al on Wednesday, November 14 2007 @ 04:30 AM EST |
I found this interesting and I was impressed by the skillful skewering of the
York proposals. I assume that the care about the security of personal
information is one of the areas that the (representative of the) US Trustee has
to deal with as there is no other entity in the case with such a responsibility.
I don't recall and I would not expect Novell or IBM to have cited it.
I think the US Trustee questions York's motives. He points out that MeInc is
well short of saleable as a product range and that the courts have found that
the Unix assets are not SCO's to sell. The only thing he, and the creditors,
seem to have missed is the saleability of MeInc assets when they are patent
encumbered by separately selling the underlying patent to a patent troll. (I
know, I know, we don't know who bought it, but who else if not a troll?). He
asks himself what York gains if the sale falls through.
Then he looks at all the bid-protection triggers and points out that there are
several ways that this could happen such that York would get an undeserved
windfall. He seems to think the sale must fail and that there is something else
behind this sham bid. I was particularly keen on his idea that bid protection
should only be triggered *after* the start of the reorganisation plan. It's as
if he knows that, after the gutting of the SCO asset's, that cannot ever
happen.
Spector has already said in court that, if SCO can sell something of doubtful
value, then the court should let it. Caveat Emptor. Please give your blessing
without seeing the APA. All you need to see is the painted pig in the hessian
sack.
If he were the bus driver, I'd walk.
---
Regards
Ian Al
Linux: Genuine Advantage[ Reply to This | # ]
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Authored by: jcjodoin on Wednesday, November 14 2007 @ 05:03 AM EST |
OK,
A bit of a nitpick here.
The US Trustee is a FEMALE, her attorney / counsel is a MALE.
Please get this right people. For a group that is so
interested in making sure that everyone else gets it right
(ie MOG, etc.) and corrects them, mocks them, etc. when
they are wrong (and in some cases exceedingly wrong if there
were such a thing), this group is getting a bit sloppy.
Please be sure to take care about taking care of the gender
and name of the US Trustee: Ms. Kelly Beaudin Stapleton, United States Trustee
for Region 3
and her cousel: Joseph J. McMahon, Jr., Esquire (# 4819)
Trial Attorney
United States Department of Justice
Office of the United States Trustee
Thank you.
jeffrey
[ Reply to This | # ]
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- Oh, no, she isn't female! - Authored by: elderlycynic on Wednesday, November 14 2007 @ 07:03 AM EST
- Oh, no, she isn't female! - Authored by: Anonymous on Wednesday, November 14 2007 @ 07:44 AM EST
- Oh, no, she isn't female! - Authored by: elderlycynic on Wednesday, November 14 2007 @ 08:05 AM EST
- Oh, no, she isn't female! - Authored by: Anonymous on Wednesday, November 14 2007 @ 08:20 AM EST
- Oh, no, she isn't female! - Authored by: DarkPhoenix on Wednesday, November 14 2007 @ 11:42 AM EST
- Oh, no, "she isn't female!" - Authored by: wvhillbilly on Thursday, November 15 2007 @ 12:08 AM EST
- Oh, no, she isn't female! - Authored by: Anonymous on Thursday, November 15 2007 @ 10:05 AM EST
- Gendered pronouns - Authored by: cricketjeff on Wednesday, November 14 2007 @ 11:00 AM EST
- US Trustee is a FEMALE, her attorney is MALE - Authored by: Anonymous on Wednesday, November 14 2007 @ 08:50 AM EST
- US Trustee is a FEMALE, her attorney is MALE - Authored by: Anonymous on Wednesday, November 14 2007 @ 09:14 AM EST
- US Trustee is a FEMALE, her attorney is MALE - Authored by: Anonymous on Wednesday, November 14 2007 @ 10:30 AM EST
- US Trustee is a FEMALE, her attorney is MALE - Authored by: ine on Wednesday, November 14 2007 @ 06:55 PM EST
- Well, whatever - Authored by: Anonymous on Wednesday, November 14 2007 @ 10:03 PM EST
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Authored by: jrvalverde on Wednesday, November 14 2007 @ 05:36 AM EST |
As far as I remember (and nobody seems to point this out), NOVELL reserved in
the APA the right to veto any transfer of assets from SCO to other companies.
That means that if any UNIX assets are to be sold, NOVELL could object and veto
the sale.
Am I wrong? And, when should Novell state their opposition to the sale using
their priviledge from the APA?
---
Jose R. Valverde
EMBnet/CNB[ Reply to This | # ]
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Authored by: billyskank on Wednesday, November 14 2007 @ 05:48 AM EST |
I ask because the trustee is the party with no dog in this fight.
---
It's not the software that's free; it's you.[ Reply to This | # ]
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Authored by: groklawdranem on Wednesday, November 14 2007 @ 06:27 AM EST |
a little late but missing above [ Reply to This | # ]
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Authored by: Steve Martin on Wednesday, November 14 2007 @ 07:11 AM EST |
"Per the Debtors' public filings, the success of the Linux
litigation hinges upon the Debtors' ability to establish ownership of certain
intellectual property rights, the same rights which the United States District
Court for the District of Utah recently found were owned by Novell.
"
YES!! The UST owns a
ClueBat!!
--- "When I say something, I put my name next to it." --
Isaac Jaffee, "Sports Night" [ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 14 2007 @ 07:26 AM EST |
I nominate Yarro for CFO. [ Reply to This | # ]
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Authored by: Jaywalk on Wednesday, November 14 2007 @ 09:30 AM EST |
Hmm. It looks like the US Trustee's beef with SCO appointing a CFO is that SCO
doesn't want to agree to follow the "crisis management protocol" document.
That's Exhibit A for #201. Then if you look up Exhibit A, you'll find that --
although #201 makes it sound like the US Trustee created the protocol -- the
document appears to be generated by a firm called Jay Alix & Associates.
Doing a bit of poking around I found an old interview with someone in the company. Apparently
they're a turnaround firm with some well-established street cred.
Did SCO
bring these guys on-board to handle their interim staffing, or is the US Trustee
just using one of their old documents which he has found useful? In either
case, it sounds like SCO doesn't want to play by established rules. Combined
with their rush to sell off their own assets it sounds like they're not really
planning a Chapter 11 reorganization at all. They're just using it to game the
system so they can do a liquidation on their own terms.
But it sounds
like the US Trustee isn't going to let them play.
--- =====
Murphy's Law is recursive. ===== [ Reply to This | # ]
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Authored by: peecee on Wednesday, November 14 2007 @ 09:49 AM EST |
Doing a few searches, it would appear that Ms. Stapleton is an accomplished
Fraud Prosecutor. I don't know if SCO counted on that, but I think she's going
to bring the hammer down on SCO pretty hard. I'm thinking Gallagher, a large
wooden sledgehammer and a watermellon... I've got my plastic sheet and raincoat
ready![ Reply to This | # ]
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Authored by: artp on Wednesday, November 14 2007 @ 09:51 AM EST |
She certainly did.
"an uncommitted bid does not deserve such
protections."
"a $10 million financing commitment that, if tapped, will
be a liability of the Debtors' estates"
"hinges upon the Debtors' ability to
establish ownership of certain intellectual property rights, the same rights
which the United States District Court for the District of Utah recently found
were owned by Novell."
"for example, if the cases convert to cases under
chapter 7 and a trustee sells the assets at a liquidation price six months from
now, the Debtors' estates will not have received a benefit from the Proposed
Purchaser's "floor" bid in connection with such a sale."
"Absent authority
supporting the argument that this Court has the authority to elevate bid
protections to superpriority administrative expense status, this Court should
reject the Debtors' proposal."
"The U.S. Trustee reserves the rights to be
heard on and/or to object to any matters relating to the proposed sale, said
matters being expressly reserved for a subsequent sale hearing."
What is
being made perfectly clear is that tSCOG should, to paraphrase in Iowegian, "sit
down, shut up, and behave yourself. It's not time for you to talk yet."
I'm
sure that the Trustee is not going out of her way to make a point on tSCOG. She
is just doing what the law tells her to do, and what she has done with dozens of
other Chapter 11 companies: to remind them that they have given up control of
the fate of their company in return for protection by the Bankruptcy Court, and
that they need to follow the rules that they agreed to.
tSCOG will not be
able to flout the laws here. Their options are much more limited, as they have
signed over certain rights for the privilege of the Court's
protection.
--- Userfriendly on WGA server outage:
When you're chained to an oar you don't think you should go down when the galley
sinks ? [ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 14 2007 @ 10:57 AM EST |
It took Judges Kimball and Wells some years to be in a position to drop the
hammer on SCO. Likely they caught on to SCO's game earlier on, but had to wait
for the discovery and motions to work their way through the process.
The US Trustee has just shown that things work <b>much</b> faster in
her bailiwick and that she's calling the shots -- not SCO.
Before, the Titanic was on a leisurely course for the shoals, but an iceberg
just got in the way and is ripping out the bottom.[ Reply to This | # ]
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- Titanic - Authored by: Anonymous on Wednesday, November 14 2007 @ 11:23 AM EST
- Unfortunately - Authored by: Anonymous on Wednesday, November 14 2007 @ 02:58 PM EST
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Authored by: Anonymous on Wednesday, November 14 2007 @ 11:39 AM EST |
With all of the talk of SCO selling it's lawsuit "pig in a poke" I've
lost track of who gets the liability of the counterclaims. It seems like the
only way these assets have any (non negative) value is if the counterclaims stay
pointed at the bankrupt SCO but that seems unfair to SCO's victims, not to
mention completely messing up the current litigation. What am I missing?[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 14 2007 @ 11:41 AM EST |
thats what SCO is trying to do so, no matter who buys it gets a legal wack in
the end and a new small little company aint gonna last anywhere near as long as
SCO did, PERIOD.
ANYWAY this happens it will come out in the wash properly.
[ Reply to This | # ]
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Authored by: SilverWave on Wednesday, November 14 2007 @ 12:09 PM EST |
It is worth repeating:
7. The U.S. Trustee understands that the Debtors are presently not willing to
agree to any of the aforementioned provisions. The U.S. Trustee believes that
this Court has the inherent authority to condition its approval of the
employment of temporary executive personnel by a chapter 11 debtor in possession
on the Debtors' conformity with accepted practice within this District.
Accordingly, the U.S. Trustee objects to the Motion to the extent the Debtors
and/or CFOS are not willing to comply with the crisis management protocol.
---
Software Patents are leeches on the creativity of mankind.[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 14 2007 @ 01:19 PM EST |
Wonder who thier ethics officer is, and if the board approved doing business
with Kevin McBride?
Sco's code of ethics clearly states:
No employee that is not a director or officer without the specific permission of
our Company Ethics
Officer, and no director or officer without the approval of a majority of our
Audit Committee members, shall:
• conduct business on behalf of SCO with immediate family members, which
include spouses,
children, parents, siblings and persons sharing the same home whether or not
legal relatives.[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 14 2007 @ 04:37 PM EST |
Where is MOG ? - is she writing anything about this
Where is Enderle, Where is (name all the paid hacks)
Their reputations must surely be also sinking lower along with SCO's long term
chances for existance.
D[ Reply to This | # ]
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Authored by: Anonymous on Friday, November 16 2007 @ 04:28 PM EST |
...that's class. don't mistake it folks, these people are goooood, otherwise
they'd have disappeared a long time ago.
right and wrong seems to be defined by how it affects SCOG.[ Reply to This | # ]
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