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| More Bills for SCO in the Bankruptcy - Will They Get Paid? |
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Sunday, July 27 2008 @ 09:30 AM EDT
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Of course there are more bills in the bankruptcy. Berger Singerman and Mesirow want to be paid again. Berger Singerman would like $67,659.21, almost half of it for time spent on "Asset Disposition/Preservation" and most of the rest on "Plan and Disclosure Statement". That brings their total billings up to $322,723.79. So far, they say, of the previous balance due of $255,064.58, they've actually only been paid $58,901.25. Now, this could just be me, I suppose, but I think that would make me a little nervous. I think I'd be remembering SCO didn't pay for their pizza before filing for Chapter 11 bankruptcy protection, and folks love pizza. Lawyers? Not so much. I gather it costs about $2,000 just to send Berger Singerman troops to a hearing in travel expenses alone. Preparation is on top of that, and time at the court is too. The river of SCO gold appears to have slowed to a drip for Mesirow this time. Their bill is only for $452.70 and no expenses. Considering how mightily they've drunk from the SCO's trough up to now, the bill surprised me. Their total before this bill was $641,977.10. They don't tell us how much has been paid, just how much the court has allowed so far. One lawyer for Mesirow attended the June 16 hearing telephonically, and he charged $355 for .5 hours.
Remember that hearing? So that's most of the Mesirow bill right there. If you read the transcript, it was a mighty short appearance. It went like this:
THE CLERK: All rise.
THE COURT: Good afternoon, everyone. please be seated. Mr. O'Neill.
MR. O'NEILL: Good afternoon, Your Honor.
THE COURT: Good afternoon.
MR. O'NEILL: James O'Neill and Rachel Werkheiser appearing from the Pachulski firm on behalf of the debtors and also appearing with our co-counsel Arthur Spector, Dan Lampert, and Grace Robson in the matter.
THE COURT: It's good to have everyone back.
MR. O'NEILL: And the Court will also recall our client representatives, Darryl McBride and Ryan Tibbets (both phonetical), appearing today.
THE COURT: Good afternoon.
MR. O'NEILL: Your Honor, going down the agenda for today, I'm going to go a little bit our of order. Number 1 is continued. Number 3 on the agenda is our quarterly fee hearing.
THE COURT: Yes, I'm prepared to approve those.
MR. O'NEILL: Thank you, Your Honor, we do have a form of order, and I can hand it up the Court would like the order?
THE COURT: That would be fine, that would be helpful.
MR. O'NEILL: It has been circulated, and I don't
believe there's any additional comments.
THE COURT: Excellent.
MR. O'NEILL: If I could hand that up to you now, Your Honor.
THE COURT: Thank you, thank you, Mr. O'Neill. Okay, fine.
MR. O'NEILL: Thank you very much, Your Honor. I'm going to turn the podium over to Mr. Spector who's going to handle number 2, our exclusivity extension request.
THE COURT: Yes, thank you.
MR. O'NEILL: Thank you.
THE COURT: Good afternoon.
MR. SPECTOR: Good afternoon, Your Honor. pleasure to be back.
THE COURT: Good to have you back.
MR. SPECTOR: Just for the record, I don't know if Mr. O'Neill mentioned that we have another participant by telephone.
THE COURT: We have a few on the telephone
MR. SPECTOR: Oh, okay.
THE COURT: Mr. Feltman, Mr. Singer, Mr. Robinson, and Mr. Petrofsky.
MR. SPECTOR: Thank you.
MR. FELTMAN (TELEPHONIC): And, Your Honor, this is Jim Feltman on behalf of Mesirow.
THE COURT: Yes.
MR. FELTMAN (TELEPHONIC): If the issues, Your Honor, that pertain to Mesirow were addressed by the Court and if there's no other reason for me to continue, I would like to be excused.
THE COURT: You certainly may. Anyone else who is on the phone strictly for the fee applications may also be excused.
MR. FELTMAN (TELEPHONIC): Thank you, Your Honor. There you go. $355. Some firms charge a minimum amount of time no matter what. Or maybe he hopped on the line early, to make sure he was on. Hopefully, SCO is finished with filing plans that have no hope of ever actually being approved. It's costly. I can't help but notice on Berger Singerman's Exhibit A this item:
6/6/2008 AJS Conference Call with D.McBride, K. Nielsen, D. Lampert, G. Robson Regarding Status of SNCP Deal and Alternatives
Hmm . . . "and Alternatives". Don't tell me SCO's Prince Charming has hopped on his magic carpet and flown away. It could just mean they were hashing out what would happen if SCO owed $2 million compared to $20 million, of course. This was before the Utah order in SCO v. Novell, so they might just have been considering worst case/best case scenarios. On 6/19 there's a mention of "formulations of plans" and some email regarding "drafting stand-alone plan" with Darl McBride and Ryan Tibbitts being asked to cooperate. Here is an explanation of what a "stand-alone plan" is. I gather it's where you file a reorganization plan that doesn't involve merging with anyone or being bought out or massive equity financing. You just figure out a way to survive by hook or by crook yourself. Uh oh. June also saw some activity regarding the Swiss arbitration. The firm sent a letter about "advance of Swiss tribunal fees". And a memo was drawn up about it and sent by email to Stuart Singer and Arthur Spector. What? They thought SCO always pays what it owes? Novell could write a book.
Just kidding. It could be there are some new fees they just paid for SCO and are simply letting them know the amount. Either that or they really are getting nervous. Mesirow's Exhibit C lists a discussion about an invoice from Merrill Datasite. Another bill outstanding? Bargaining over the price? It's not clear. Like I say, if it were me, I'd be getting nervous. One of our eyewitnesses who attended a court hearing in the bankruptcy told me that he overheard a SCO lawyer, Arthur Spector, IIRC, tell one of the SCO executives during a break that representing SCO wasn't work. It was a labor of love. Would it not be funny if it turned out it actually was? No need for nerves. SCO's prince will come. Spector told the court that they were working on a new deal and, if it happens, it would be better than the first one. So, assuming that was accurate, I'd say there's no call for them to be nervous.
Snark.
Here are the filings:
518 -
Filed & Entered: 07/22/2008
Certificate of No Objection
Docket Text: Certificate of No Objection Seventh Monthly Fee Application of Dorsey & Whitney for the Period April 1, 2008 through May 31, 2008 (related document(s)[509] ) Filed by Dorsey & Whitney LLP. (Schnabel, Eric)
519 -
Filed & Entered: 07/23/2008
Application for Compensation
Docket Text: Interim Application for Compensation for Services and Reimbursement of Expenses, as Co-Counsel to the Debtors in Possession for the Period from June 1, 2008 through June 30, 2008 Filed by Berger Singerman, P.A.. Objections due by 8/12/2008. (Attachments: # (1) Notice # (2) Exhibit A # (3) Certificate of Service and Service List) (O'Neill, James)
520 -
Filed & Entered: 07/24/2008
Application for Compensation
Docket Text: Monthly Application for Compensation and Reimbursement of Expenses for the Period from June 1, 2008 through June 30, 2008 Filed by Mesirow Financial Consulting, LLC. Objections due by 8/13/2008. (Attachments: # (1) Notice # (2) Exhibit A # (3) Exhibit B # (4) Exhibit C # (5) Certificate of Service and Service List) (O'Neill, James)
521 -
Filed & Entered: 07/25/2008
Certificate of No Objection
Docket Text: Certificate of No Objection (No Order Required) Regarding Ninth Interim Application of Tanner LC for Compensation for Services and Reimbursement of Expenses as Accountants to the Debtors for the Period from June 1, 2008 through June 30, 2008 (related document(s)[511] ) Filed by The SCO Group, Inc.. (Attachments: # (1) Certificate of Service and Service List) (O'Neill, James)
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| Authored by: joef on Sunday, July 27 2008 @ 10:33 AM EDT |
Does it often happen that the DIP exhausts its resources so that the
post-petition debts can't be paid in full? I thought that the guidance of the
court was supposed to prevent this problem.[ Reply to This | # ]
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| Authored by: ankylosaurus on Sunday, July 27 2008 @ 10:45 AM EDT |
It is helpful to have 'misteak --> correct' in the title.
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The Dinosaur with a Club at the End of its Tail[ Reply to This | # ]
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| Authored by: ankylosaurus on Sunday, July 27 2008 @ 10:48 AM EDT |
Please make URLs clickable.
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The Dinosaur with a Club at the End of its Tail[ Reply to This | # ]
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| Authored by: Anonymous on Sunday, July 27 2008 @ 11:20 AM EDT |
The Last Lecture
I wonder what Viacom's audience for this program would be after they inserted
the 7 commercial messages required to support an OTA broadcast of this lecture. [ Reply to This | # ]
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| Authored by: Aladdin Sane on Sunday, July 27 2008 @ 11:27 AM EDT |
| Discuss Groklaw News Picks here.
Please cite the News Pick you are
commenting on.
Thanks.
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"Experience is what you get when you
didn't get what you wanted." --R. Pausch [ Reply to This | # ]
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| Authored by: SilverWave on Sunday, July 27 2008 @ 12:07 PM EDT |
...to bleed the company dry.
The state looks complicit as well, their local Lawyers get a share, as does the
Court.
Cosy little club - where everyone knows they each have their parts to play in a
sham.
A sham because, although it may have originally been the intention to help the
company reorganise, the system has been gamed and now its just a means of
syphoning off as much money as possible as soon as possible.
And of course the Executives keep getting paid and are allowed to keep control
so they can build a lifeboat for themselves... to ventures new.
---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions
[ Reply to This | # ]
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| Authored by: Anonymous on Sunday, July 27 2008 @ 12:55 PM EDT |
Expenses for filing a bil $452.70
Total $452.70
Tufty
[ Reply to This | # ]
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| Authored by: Anonymous on Sunday, July 27 2008 @ 01:20 PM EDT |
The Administrative Order Establishing Procedures for Interim Monthly
Compensation of Professionals [95] provides that SCO only has to pay 80% of
fees and 100% of expenses billed monthly. The professionals are creditors for
the rest. As far as I can see, SCO has complied with this order, as it must to
remain a debtor in possession. [ Reply to This | # ]
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| Authored by: bezz on Sunday, July 27 2008 @ 02:02 PM EDT |
There were a couple of interesting items in June:
June 6
STATUS CALL WITH TEAM REGARDING TERMS OF AMENDED PLAN
June 6 FOLLOW UP
REGARDING MESIROW, CHANGE IN STAFFING, ETC; CONFER AND MEMOS REGARDING SAME;
PREPARE FOR, PARTICIPATE IN CONFERENCE CALLS REGARDING DEAL STATUS, NEXT STEPS,
STRATEGIC ALTERNATIVES, ETC; BEGIN 10Q REVIEW, FOLLOW UP WITH REORG
TEAM
June 10 PREPARE FOR AND PARTICIPATE IN CONFERENCE CALL BOARD
OF DIRECTORS MEETING REGARDING FINANCIALS, PROJECTIONS, DEAL STATUS AND NEXT
STEPS, ETC; RECEIVE AND BEGIN TO REVIEW NOVELL OBJECTION TO MOTION TO EXTEND
EXCLUSIVE PERIODS, CONFER REGARDING SAME, MEMOS REGARDING RESPONSE, REPLY TO
SAME, ISSUES FOR WITNESS, ETC; CONFER WITH CFO REGARDING COMMENTS TO 10 Q AND
RELATED ISSUES
They seem to be spending a little more time this
month on the 10-Q than they did in March (comparable time period). Maybe with
good reason as the cash is getting low and liabilities increasing. And that was
before the Novell ruling came in. The next 10-Q (if they make it to the filing
deadline of July 31 + 45 days, September 16) will be ugly. SCO appears to have
already pulled in most cash from overseas accounts and owes more money to Novell
for SVRX than it has listed in total overseas cash.
June 11
COMPLETE REVIEW OF NOVELL OBJECTION, CONFER, MEMOS REGARDING OBJECTION AND
RESPONSE, REPLY AND ISSUES OF SNCP PRESENTATION AT HEARING ON MOTION TO EXTEND
EXCLUSIVITY; FINAL REVIEW OF 10 Q FILING, REVIEW REORG TEAM COMMENT REGARDING
DUE DILIGENCE AND SNCP MEMO OF UNDERSTANDING, MEMOS REGARDING SAME; COMPLETE
REVIEW, REVISIONS TO 10 Q FINAL DRAFT AND SEND TO CFO WITH COVER NOTE,
ETC
Due diligence and SNCP Memorandum of Understanding? Seems
SNCP was still lurking before the hearing.
June 16 PREPARE
FOR HEARING ON EXCLUSIVITY AND MEETINGS REGARDING DEALS AND STAND ALONE PLAN OF
REORGANIZATION, CONFER, MEETING WITH REORG TEAM
June 19 EXCHANGE E-MAIL
CORRESPONDENCE WITH D. MCBRIDE AND R. TIBBITTS REGARDING COOPERATION IN DRAFTING
STAND-ALONE PLAN; OFFICE CONFERENCE WITH G. ROBSON REGARDING
OUTLINES OF SUCH A
PLAN
Maybe things are not going so well with SNCP. These
entries are after the discussions about the SNCP MOU and due diligence. Note
the phrase "stand-alone plan".
In a Chapter 11 bankruptcy
proceeding, a company may attempt to reorganize its operations in a
'stand-alone' reorganization or to sell some or most of its assets as a going
concern.
is a brief description of a stand-alone plan from here. Delta
Airlines had probelms with its stand-alone plan when US Airways launched a hostile
takeover bid.
I don't want to infer too much from this, but if SCO is
considering options to emerge that do not entail selling a substantial part of
its assets, then (once again) maybe things are not going so well with SNCP and
its due diligence.
Whatever the case, I do not expect SCO to be able to
complete a reorganization plan in the time between the Utah ruling and deadline
to file for August. I expect SCO to file for -- and receive -- another
application for extension of exclusivity. Now that Novell has a number from
Utah, they may be able to argue they will be prejudiced based upon the Monthly
Operating Reports; it will likely take an objection from the Trustee to swing
things in Novell's favor.
It may be a Labor of Love for Mr. Spector, but it
feels more like being stranded on the Satellite of Love to me. [ Reply to This | # ]
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| Authored by: comms-warrior on Sunday, July 27 2008 @ 09:31 PM EDT |
I'd say they have about as much chance of being paid right now, as Novell does
of getting their slice of the 2.5 Million dollars owed to them.
I don't believe it will happen - Sorry...
I can see them fighting the judgement made by Kimbal about the 2.5 Million owed
now, going out with a flutter as they exhaust every avenue of appeal.
Scumbags they may be, but creative litigators they are.[ Reply to This | # ]
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