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SCO Files a Proposed APA with York - Updated - Hearing Minutes
Friday, November 16 2007 @ 02:59 PM EST

As you know, in the filed objections to the proposed sale of SCO's assets to York [PDF], one main sticking point was that there was no APA, just a Term Sheet [PDF], so no one could figure out exactly what SCO was trying to sell. Well, the SCO side cobbled one together now, just in time for today's hearing without much notice to anyone who might not like the terms, and here it is, the proposed APA [PDF]. Here's the Notice [PDF] that was filed with it. It references schedules and exhibits, but I don't see any such. I'd say someone besides SCO reeeeally wants this deal to happen. Fast. No peeking. Don't think. Just do it. Here are the objections again:

No word from the hearing yet. I sure hope some of the guys made it. This Notice filing says the hearing was today at 4, but the time was changed to 2 PM, so presumably they are in the thick of it right now.

Update: The minutes from the hearing are now posted:

217 - Filed & Entered: 11/16/2007
Certificate of Service
Docket Text: Certificate of Service (and Service List) Regarding Notice of Filing of Asset Purchase Agreement Between the Debtors and York Capital Management (related document(s)[215] ) Filed by The SCO Group, Inc.. (Werkheiser, Rachel)

218 - Filed & Entered: 11/16/2007
Minute Entry
Docket Text: Minutes of Hearing held on: 11/16/2007 Subject: Bidding Procedures (cont'd from 11/6). (vCal Hearing ID (61134)). (related document(s) [208]) (SS, ) Additional attachment(s) added on 11/16/2007 (SS, ).

I see from the attached signin sheet that David Marriott was there. If you compare the numbers listed with the agenda [PDF] I see that Dorsey and Whitney's motion was OK'd, ditto Boies Schiller under certification of counsel, and the other two biggies are held over until the next hearing on Dec. 5. Those two are the proposed sale and the CFO issue. So, now we know. One thing is certain. SCO's attempt to rush this sale through didn't fly.

[End update]

Here's everything else filed today on PACER:

212 - Filed & Entered: 11/16/2007
Motion to Appear pro hac vice (B)
Docket Text: Motion to Appear pro hac vice of Jeffrey W. Levitan of Proskauer Rose LLP. Receipt Number 149601, Filed by York Capital Management. (Rosner, Frederick)

213 - Filed & Entered: 11/16/2007
Certificate of No Objection
Docket Text: Certificate of No Objection (No Order Required) Regarding First Interim Application of Berger Singerman, P.A. for Compensation for Services and Reimbursement of Expenses, as Co-Counsel to the Debtors in Possession for the Period from September 14, 2007 through September 30, 2007 (related document(s)[163] ) Filed by The SCO Group, Inc.. (Attachments: # (1) Certificate of Service and Service List) (O'Neill, James)

214 - Filed & Entered: 11/16/2007
Declaration in Support
Docket Text: Supplemental Declaration in Support of Dorsey & Whitney, LLP, as Proposed Special Counsel for the Debtors, Nunc Pro Tunc to the Petition Date (related document(s)[110] ) Filed by The SCO Group, Inc.. (Schnabel, Eric)

215 - Filed & Entered: 11/16/2007
Notice of Service
Docket Text: Notice of Service of Asset Purchase Agreement Between the Debtors and York Capital Management (related document(s)[149] ) Filed by The SCO Group, Inc.. (Attachments: # (1) Exhibit A) (O'Neill, James)

216 - Filed & Entered: 11/16/2007
Affidavit/Declaration of Service
Docket Text: Affidavit/Declaration of Service (and Service List) Regarding Supplemental Declaration of Nolan S. Taylor, on Behalf of Dorsey & Whitney, LLP, as Proposed Special Counsel for the Debtors, Nunc Pro Tunc to the Petition Date (related document(s)[214] ) Filed by The SCO Group, Inc.. (O'Neill, James)


  


SCO Files a Proposed APA with York - Updated - Hearing Minutes | 130 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
SCO Files a Proposed APA with York
Authored by: Anonymous on Friday, November 16 2007 @ 03:11 PM EST
Can't they just postpone the whole hearing related to selling the assets to give
creditors time to read the APA and object to it since they didn't file it in a
timely manner?

[ Reply to This | # ]

Corrections here...
Authored by: Erwan on Friday, November 16 2007 @ 03:12 PM EST
If any.

---
Erwan

[ Reply to This | # ]

SCO Files a Proposed APA with York
Authored by: Anonymous on Friday, November 16 2007 @ 03:13 PM EST
Looks like the real meat is in the schedules, which are not attached to the APA

[ Reply to This | # ]

Novell should just buy the Unix business
Authored by: Anonymous on Friday, November 16 2007 @ 03:16 PM EST
Considering SCO in Article VIII of the APA, section 8.1 gives the purchaser the
authority to look through every corner of their business including the books,
Novell or IBM should just buy the Unix business just to get access to SCO. By
the rights of the APA, SCO would have to let them see the books and everything
else SCO has.

[ Reply to This | # ]

News picks discussions here...
Authored by: Erwan on Friday, November 16 2007 @ 03:20 PM EST
Remember to quote the article in your comment title.

---
Erwan

[ Reply to This | # ]

Page 14: "h The Linux litigation;"
Authored by: Night Flyer on Friday, November 16 2007 @ 03:21 PM EST
Page 14: "h The Linux litigation;"

All things considered, (I have been following this for several years) I don't
really know what you would be buying.

The litigation with IBM? Novell? SUSE? Red Hat? Autozone? (I gather the
Daimler-Benz is completed).

---
Veritas Vincit - Truth Conquers

[ Reply to This | # ]

OT, The off topic thread...
Authored by: Erwan on Friday, November 16 2007 @ 03:21 PM EST
Don't forget the "Preview" button if using any allowed HTML Tag...

---
Erwan

[ Reply to This | # ]

SCO Files a Proposed APA with York
Authored by: Anonymous on Friday, November 16 2007 @ 03:23 PM EST
Okay, I'm confused. One of the things they're selling is "The Linux
Litigation" which means "the pending legal proceedings against
Autozone and Red Hat..." but surely Red Hat are suing them, not the other
way around? Can you actually sell "being sued by someone"? Or does
this mean they're selling the value of any counterclaims while retaining the
potential liability? I assume they still have to fight the case. You can't sell
some litigation against you and then walk away from it, or everyone would.

[ Reply to This | # ]

Actually still Incomplete w/o Schedules
Authored by: Anonymous on Friday, November 16 2007 @ 03:34 PM EST
This APA can *NOT* be effectively evaluated without schedules which are
missing.

This is nothing more than a asset raid, leaving nothing but ligation liabilities
and empty handed stock holders.

If this succeeds, it will make a mockery of any justice in the United States.

Judges and attorneys alike might as well wear mask and hold guns, it shouldn't
be too much trouble to ask them to at least look the part!

[ Reply to This | # ]

SCO Files a Cobbled Together APA with York
Authored by: rsteinmetz70112 on Friday, November 16 2007 @ 03:35 PM EST
I haven't had time to compare the term sheet to the APA in detail, but parts
look almost identical.

It seems the APA merely adds a lot of boilerplate to the Term Sheet, Including
many pages of standard definitions. One thing I would have expected to be
clarified or expanded is the definition of the Novell and IBM Litigation, with a
list of case numbers or something. Is, for example, the Arbitration included or
not? It is not technically litigation.

---
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 | # ]

SCO Files a Proposed APA with York
Authored by: Anonymous on Friday, November 16 2007 @ 03:37 PM EST
As noted by the Trustee, by Novell, by IBM, and by everyone else, the purchase
price is NOT $36 million as described in this proposed APA. Further, a closing
date no later than Dec. 31, 2007, is completely laughable in that it gives no
other potential purchaser time to evaluate the deal and join in an auction.
Holy Toledo, York has already moved funds (earnest money?) into escrow,
according to the APA. This is a bald-faced setup, and if the court accedes I
think we'd have to start questioning what's in the water in Delaware. Based on
SCO's history, they are trying to avoid something with this subterfuge.

[ Reply to This | # ]

The real purpose of the York APA
Authored by: Anonymous on Friday, November 16 2007 @ 03:52 PM EST
I think the real purpose is to cause confusion. Until now, when someone talked
about "the APA", it was always clear that it referred to the old
(1995?) APA between Novell and Santa Cruz. When someone talks about "the
APA" now, it may as well mean this new APA with York.

This reminds of Caldera renaming itself to "SCO", to make it seem like
that old Santa Cruz Operation company. All mere confusionism.

[ Reply to This | # ]

Last-minute change of time
Authored by: Anonymous on Friday, November 16 2007 @ 04:03 PM EST

This Notice filing says the hearing was today at 4, but the time was changed to 2 PM

Doesn't this make a mockery of the requirement that legal proceedings be open to the public? What's the difference between:

  1. Announcing that the public will not be admitted to the court
  2. Telling the public that the hearing is at 4pm and then actually holding it at 2pm

As far as I can see, there isn't any difference.

[ Reply to This | # ]

Section 5.10: REPRESENTATIONS AND WARRNTIES OF SELLERS
Authored by: Anonymous on Friday, November 16 2007 @ 04:08 PM EST
Umm.. What?


Ownership of Assets. Each Seller has sole and exclusive, good and marketable title to, or, in the case of propert held under a lease, license or other Contractual Obligation, a sole and exclusive, enforceable leasehold interest or license in, or right to use, all of its properties, rights and Assets, whether real or personal and whether tangible or intangible, including all assets reflected in the Most Recent Balance Sheet or acquired after the Most Recent Balance Sheet Date

[ Reply to This | # ]

How can SCO sell the Counter Claims
Authored by: Anonymous on Friday, November 16 2007 @ 04:08 PM EST
How can SCO sell the counter claims in the IBM lawsuit?

IBM's counter claims cover actions done by SCO. How can that lawsuit be sold
off? Would the BK sale effectivly split the existing lawsuit moving the claims
against IBM into a new lawsuit and leaving the counter claims against SCO
hanging. That seems very unfair to IBM.

[ Reply to This | # ]

Shell Game
Authored by: argee on Friday, November 16 2007 @ 04:16 PM EST
Its a shell game.

Lets say, for the sake of argument, that IBM buys the
stuff by offering terms identical to York, plus $1.00.

Now the fun begins. IBM wants to do this and that, and
SCO says: "Oh, we did not sell that part." "Oh, you
cannot license that."

But if someone sues SCO for it, then they say "Oh, we
sold all that to IBM, court approved, see them."

Neat. Very neat.


---
--
argee

[ Reply to This | # ]

What will likely happen
Authored by: argee on Friday, November 16 2007 @ 04:21 PM EST
Is that Novell will just buy SCO, stock, lock and
hipcheck. They could do this alone (with IBM backroom
blessing) or by setting up a new company that maybe
partners with IBM and Redhat. The settles the mutual
litigation, etc.

THEN they look at the corporate records, decide some
sort of malfeance was done by 'former' officers, etc,
and sue the $54M pants off of them.

Worded properly, such a lockstock proposal may fly with
judge Gross, all the little guys get paid; the thing
gets cleared from his desk, and the airlines flying to
Aruba make a windfall.


---
--
argee

[ Reply to This | # ]

No names for the purchaser
Authored by: Anonymous on Friday, November 16 2007 @ 04:58 PM EST
Maybe York is just being a shell... I notice that all the through the document
the purchaser is blank and only c/o York... Something is fishy the whole
document just doesn't pass the smell test..

[ Reply to This | # ]

SCO Files a Proposed APA with York
Authored by: Flak Magnet on Friday, November 16 2007 @ 05:00 PM EST
From the article: "This Notice filing says the hearing was today at 4, but
the time was changed to 2 PM,"

Why does that make me think of the part in "Harry Potter, Order of the
Phoenix" where Harry's trial was moved to an earlier time and notices sent
out at the last possible minute in an effort to keep Dumbledore from be able to
attend properly represent Harry's rights?

Presumably notices were sent out as appropriate by the court and such, but
still... it reminded me of that. I'm not suggesting anyone at the court is in
collusion w/ SCO or anything of the sort.

[ Reply to This | # ]

Filing #218 continues the York deal until 12/5
Authored by: Anonymous on Friday, November 16 2007 @ 05:01 PM EST
The CFO hiring is also continued until 12/5

[ Reply to This | # ]

just in time for today's hearing
Authored by: Yossarian on Friday, November 16 2007 @ 05:04 PM EST
Should not people with some interest in the sale, e.g.
creditors, have more time to study the documents?

Why can't judge tell SCO something like: "submit all details
of the deals, to all creditors, and two weeks from now, after
all creditors will have a chance to respond to the proposed
deal, the court will discuss the issue?"

I mean, why should SCO get an advantage just because it did
not play by the rules?

[ Reply to This | # ]

SCO's reactive strategy
Authored by: Anonymous on Friday, November 16 2007 @ 05:16 PM EST
This really highlights SCO's lack of any real anything (plan, case, evidence,
business, future, ethics, etc).

They once were the aggressor, but now are doing nothing more than scattergunning
motions, theories and proposals out at the courts and creditors, none with any
kind of foundation or supporting documentation, then waiting to see who objects
and how. They then quickly scratch together some boilerplate language with a
bunch of buzzwords that sound related, submit that, and wait for the next round.
Rinse and repeat.

This has been going on ever since Wells gutted their truckloads of evidence, but
in Utah the pace was slow enough that the reactive bounce wasn't as obvious.
The BK court moves too fast for them, though, and its now pathetically clear
that they are just winging it.

I only hope its as obvious to the BK judge.

[ Reply to This | # ]

Arrrgh, how long do I need to wait... and what will SCO do when the stay is lifted
Authored by: GriffMG on Friday, November 16 2007 @ 05:32 PM EST
I can't imagine that the Judge Gross is going to let this whole SCOthing fly and
he must lift the stay on Novell and stymie the Asset Sale to York.

When he does, what will SCO have up their sleeves?

Chapter 7?


---
Keep B-) ing

[ Reply to This | # ]

SCO Files a Proposed APA with York - Updated - Hearing Minutes
Authored by: Anonymous on Friday, November 16 2007 @ 05:56 PM EST
Am I reading this APA correctly? York "pays" $36M then subtracts $10M
and $10M and $10M and $6M. Sounds like York is getting everything for nuthin.


I am REALLY starting to smell a rat.

[ Reply to This | # ]

SCO's attempt to rush this sale through didn't fly
Authored by: Yossarian on Friday, November 16 2007 @ 06:20 PM EST
SCO took a gamble.
Had the judge and the US Trustee been caught off-guard then
SCO could, by claiming that IBM/Novell motive is to prevent
pretty successful lawsuits against them, slip by.

The problem is that the US Trustee did pay attention and
judges just hate dirty play. So the judge gave all involved
a couple of weeks to respond to SCO last moment filing of
important details.

If I were SCO I'd look at this point for a way to be
assigned to a different judge.
(A pretty hard thing to do, but there is no other hope.)

[ Reply to This | # ]

SCO's (Micro$oft's) Game Is So Obvious
Authored by: Anonymous on Friday, November 16 2007 @ 06:39 PM EST
"Team" SCO (actually Team Micro$oft's) game plan is to do EVERYTHING
possible to avoid going back to the Utah courts, while at the same time
bleed/punish Nouvell and others financially (because they have to hire a never
ending herd of lawyers.) Gates has obviously read THE ART OF WAR and is
applying the latter in spades.

I assume that UNTIL they go back and finish the Utah court game - the
guillotine cannot drop onto SCO's and Microsoft's skinny little necks. The
latter would at least stop one of Micr$oft's many attacks on Linux and Free
Open Source.

The question is - can they (SCO/Micro$oft) tie up Nouvell, IBM et al. in a
series of court rooms for ever - in order to keep out of the Utah court!

[ Reply to This | # ]

Whew! Novell must be pleased.
Authored by: Anonymous on Friday, November 16 2007 @ 07:23 PM EST
That'un ain't gonna fly, Wilbur!

First, look at the definition of "Encumbrances" (...any and all
rights, claims and interest....that may have been or may be asserted by any
Person (other than Sellers)). That clearly applies to Novell.

Then look at Section 2.1 (purchased assets "free of any Encumbrances")
and they have just made Novell's argument for them.

Section 2.1 cannot be achieved without unstaying the Utah case.


Of course, here at Groklaw, we knew that all along...

[ Reply to This | # ]

They seem to have lost track of who is suing who
Authored by: John Hasler on Friday, November 16 2007 @ 11:07 PM EST
From the APA:
"Linux Litigation means the pending legal proceedings against Autozone and
Red Hat..."

---
IOANAL. Licensed under the GNU General Public License

[ Reply to This | # ]

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