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The Bankruptcy Hearing Schedule for Sept. 16th, a Letter, and a Spector Sideshow, but Where's York?
Thursday, September 11 2008 @ 11:59 PM EDT

The Notice of Agenda [PDF] is posted now, and so we find out what is on the schedule for the SCO bankruptcy hearing on the 16th in Delaware. As I'll show you, there is also a letter to the bankruptcy judge from an ex-employee of SCO alleging some bookkeeping skullduggery on SCO's part with regard to back pay and severance, and finally a story in the Miami Herald involving allegations of a weird bankruptcy auction, something about a mystery bidder, if there actually was one, in a bankruptcy in Florida in which the bankruptcy client is represented by none other than Arthur Spector of Berger Singerman. The Justice Department is said to be investigating. So grab your bogometers, and let's dive in.

Where's The Motion To Give York Some Money?

The hearing schedule, oddly, doesn't include the "SCO-feels-a-moral-duty-to-slip-York-some-money" motion. No gifting to York, then? What happened to that hilarious bogomotion? I have no idea. Maybe they've found some other way to reward those wonderful and certainly highly deserving people. Not to mention the harm to SCO's morals if it isn't allowed to do the right thing. I'd hate to watch SCO if it lost its morals. That motion was supposed to be heard on the 16th. Has SCO dropped it? I doubt it. Shame doesn't seem to be in SCO's vocabulary. Maybe they forgot about it. Or hope everyone else has.

That motion has had quite a history of postponement. First it was supposed to be heard on April 16, according to the original motion, and then it was postponed until May 15, and then to June 15, and then to July 15, and then to August 13, and then supposedly it was set for September 16th. Remember I wondered aloud when the last postponement was announced whether they meant September 16th or maybe never? I didn't just fall off a turnip truck, you know. Everyone objected to that motion.

So, what is left for the 16th? They list two columns. First, on the "uncontested" list, we see the SCO motion to have the court stamp the stock options it already granted its executives as having been "awarded in the Ordinary Course of Debtors' Business". Tip to the judge: If you mark on SCO's curve, what *wouldn't* be "normal course"? They do plan ahead, one presumes. Oh, and SCO'd like to keep giving options to SCO executives, so even though SCO says it's all in the ordinary course, which would mean no need to ask, they ask anyway "in an abundance of caution." What's that sound? My bogometer is ringing off the hook?

Also listed as a matter no one objected to is SCO's Motion to Present Evidence and Testimony Related to Certain Awards Under the 2004 Omnibus Stock Incentive Plan Under Seal [PDF]. We might all get jealous otherwise, one presumes, when we read how much they all got. Particularly after SCO sells itself to somebody and all the stock options magically transform into gold, perchance? I've read that can happen every now and then, if you tilt a perfect universe just right.

In the contested column, we find SCO's 3rd Motion to Extend Exclusivity, to which Novell *has* objected with passion. Here's what SCO would like, IIRC, in that motion: an open-ended exclusivity time period in which to file a reorganization plan, measured by a deadline set beginning 45 days after the filing of an appeal of the Utah Court's decision against SCO, whenever that happens. Yabbut, what if no appeal is ever filed? Or maybe SCO meant 45 days after we find out if the Large Hadron Collider will mean the end of all life on earth. Or was it 45 days after the 12th of Never? Something like that. It's so hard to keep track of SCO's morphology.

Also, oddly on the contested list are all the quarterly fee applications [PDF] by everyone and his dog -- Berger Singerman, Tanner, Mesirow, and Dorsey & Whitney. I am not aware of any objections to any of them, actually, and I don't see any listed here, so it must be a pro forma thing, in that there is a notation that there will be a SCO motion presented on the day itself: "The Debtors will present an omnibus order approving the quarterly fee applications." That's our SCO. That gives everyone else five minutes, tops, to object to anything new slipped into the omnibus motion. Not that SCO would ever do such a thing.

What? Well, *everything* can't take forever plus 45 days. We need to move this case right along.

Can you imagine if Novell were not hanging in there? The new Trustee seems to have gone silent, so far, and without Novell, well... I can just imagine what a party SCO would be throwing. Free drinks for everyone, I'm sure, on free trips to outer space and back. I hate the deal Novell struck with Microsoft, but it's enough to make me want them to get a lot of business just because they are due a reward for not giving up and not giving in. SCO can make you want to go at *least* to Rio, if not to Pluto, just to get away from them and their perpetual motion machine. Wait. Is there a Pluto any more? I mean, I can still land my space ship there, right, whatever they say it is now?

SCO's use of the English language puts Jabberwocky to shame, speaking of morphology. "Twas brillig and the slithy toves." Sounds like English. But we don't know what it means. One must guess, without ever having the entire set of facts and precise definitions to be able to do so.

I bet I can guess what slithy means, actually. To give you a hint, it's what they should name their next product release, like Ubuntu's Jaunty Jackalope. Here's my suggestion for SCO:

Slithy SCO
I know. Perfection.

Anyway, thanks to Eric Raymond, I know what bogosity means. Or at least how to measure it so I know it when I see it. There's an entire field of study, quantum bogodynamics, after all. The York motion redlined my legal bogometer, and I wasn't the only one, so the explanation may just be that simple, that SCO bumped into the outer limits of the known Bogoverse with that one, and when it saw the reaction to it was everyone suggesting that it was emitting too many bogons, it has given up, at least for now. Until they can bogo-sort. You know what that is:

(var. 'stupid-sort') The archetypical perversely awful algorithm (as opposed to bubble sort, which is merely the generic bad algorithm). Bogo-sort is equivalent to repeatedly throwing a deck of cards in the air, picking them up at random, and then testing whether they are in order. It serves as a sort of canonical example of awfulness. Looking at a program and seeing a dumb algorithm, one might say "Oh, I see, this program uses bogo-sort.
Yup. SCO uses bogo-sort, I feel sure of it. I think they are supposed to list the York motion, though, either as resolved or as scheduled for another day. Of course, bankruptcy court is a bit more casual than most other courts. Like I say, SCO's full of mysteries. Perhaps we'll get some answers on the 16th.

The filings:

09/08/2008 - 542 - Letter Dated 9/2/2008 from Alia Shahbaz to the Honorable Judge Kevin Gross concerning Release Agreement Filed by Deputy Clerk, United States Bankruptcy Court. (Attachments: # 1 Exhibit A) (TAS, ) (Entered: 09/11/2008)

09/11/2008 - 543 - Notice of Agenda of Matters Scheduled for Hearing Filed by The SCO Group, Inc.. Hearing scheduled for 9/16/2008 at 10:00 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. (Attachments: # 1 Exhibit A # 2 Certificate of Service and Service List) (O'Neill, James) (Entered: 09/11/2008)

09/11/2008 - 544 - Certificate of No Objection (No Order Required) Regarding Eleventh 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 July 1, 2008 through July 31, 2008 (related document(s)532 ) Filed by The SCO Group, Inc.. (Attachments: # 1 Certificate of Service and Service List) (Makowski, Kathleen) (Entered: 09/11/2008)

09/11/2008 - 545 - Monthly Application for Compensation (Twelfth) for Services and Reimbursement of Expenses, as Co-Counsel to the Debtors in Possession for the Period from August 1, 2008 through August 31, 2008 Filed by Berger Singerman, P.A.. Objections due by 10/1/2008. (Attachments: # 1 Notice # 2 Fee Detail # 3 Certificate of Service and Service List) (O'Neill, James) (Entered: 09/11/2008)

I'll put 545 in when I get it. Another bill from Berger Singerman.

Update -- Here's York: I've put it up now. And oh me, oh my. Look at the Fee Detail [PDF] attached to Berger's bill, on page 6:

8/27/2008 - GR - Conference with S. McNutt Regarding Status of Plan - 0.10
Would that not be Scott McNutt, the lawyer for the supposedly dead York deal? My, my, my, my, my. Not the lawyer for Stephen Norris, then? Whatever could it mean? Snark.

The Letter

542 is a sad letter dated September 2 from an ex-employee, who claims she was wrongfully terminated after 23 years with the firm when SCO downsized in October of 2006 and is owed back pay and severance. She would like the Bankruptcy Court to help her. Hardy har. Like *that* will happen. The letter claims that another downsized ex-employee, Janet Sullivan, told her that she signed a release and got paid, but in a way that violated OWBPA regulations, the Older Workers Benefits Protection Act, and then it gets interesting:

After Janet pointed out to SCO that the company was in violation of the OWBPA regulations, SCO devised a plan to pay Janet for her comp/vacation time without proper approval from the court trustee. SCO contracted Janet at a high rate in return for minimal work to pay her the amount that was owed to her. Janet told me that despite this contract, SCO again tried to wiggle out of paying her. Thus, she was forced to use tough means to make SCO comply with the agreement to pay her the amount owed her.

Well. Too bad there is no affidavit from Janet. Without that, this may not be going anywhere, I'm afraid. Like I always tell you: don't step foot in a courtroom without a lawyer. You'll make mistakes and then blame it on "the system". I know Janet can be asked, if anyone really wanted to follow up, but in my opinion, judging by what happens in the movies, she's probably booking a frantic flight to Pluto right about now and she has no plans to be back until 45 days after the last star goes out.

It's very interesting conceptually, however, this letter, and judges can extrapolate, so it might make the judge listen more attentively and with new ears to Novell's suggestions in its most recent objection to the extension request that the SNCP deal may be bogus.

The Spector Sideshow

Say, this article, Justice Dept. probes botched boatyard auction seems to be about our Arthur Spector. PACER lists an Arthur J. Spector of Berger Singerman as an attorney on the bankruptcy case of 07-11531-JKO New River Boat Club, Inc. Could there be two? The subheading is, "Authorities are investigating charges that a fake bidder was used to increase the sale price at the auction of the New River Marina":

A bankruptcy judge ordered the Fort Lauderdale boatyard auctioned after its owners couldn't find a buyer. So on a blazing July afternoon, about 50 people crowded on the docks.

Within seconds, chaos erupted. Two participants protested how the auction was being conducted, questioning the legitimacy of a mystery bidder. The winning bid was later withdrawn and the auction called off.

Now the U.S. Trustee's office, an arm of the Justice Department that oversees the administration of bankruptcy cases, is investigating whether a shill buyer was used to boost the marina's sale price at the auction.

And the bankruptcy judge in the case, John K. Olson, on Sept. 18 will hear a request to sanction some professionals behind the auction -- which Olson called a "disaster."

Here's what happened after the story in the Miami Herald ends, from the docket:

547 - Filed and Entered: 08/28/2008
Notice of Taking Deposition
Docket Text: Amended Notice of Taking Deposition Duces Tecum of Jim Gall on 9/23/2008 at 11:00 a.m. Filed by Creditor 84 Marina, LLC. (Murray, Wanda)

548 - Filed & Entered: 08/29/2008
Notice of Hearing
Docket Text: Notice of Hearing (Re: [544] Motion to Convert Chapter 11 Case to Chapter 7 filed by U.S. Trustee Office of the US Trustee) Hearing scheduled for 10/07/2008 at 02:30:00 PM at 299 E Broward Blvd Room 301 (JKO), Fort Lauderdale. (Romero, Christina)

549 - Filed & Entered: 09/02/2008
Order Continuing Hearing
Docket Text: Order Continuing Preliminary Hearing On (Re: [503] Motion to Enforce, Motion for Sanctions filed by Creditor 84 Marina, LLC). Hearing scheduled for 09/18/2008 at 03:00:00 PM at 299 E Broward Blvd Room 301 (JKO), Fort Lauderdale. (Rodriguez, Amelia)

550 - Filed & Entered: 09/02/2008
Order Setting Status Hearing/Conference
Docket Text: Order Setting Status Conference . Status hearing to be held on 09/18/2008 at 03:00:00 PM at 299 E Broward Blvd Room 301 (JKO), Fort Lauderdale. (Rodriguez, Amelia)

551 - Filed & Entered: 09/03/2008
Certificate of Service
Docket Text: Certificate of Service and Compliance with Local Rule 2090-1 by Attorney Thomas M. Messana Esq. (Re: [550] Order Setting Status Hearing/Conference, [549] Order Continuing Hearing, ). (Messana, Thomas)

552 - Filed & Entered: 09/04/2008
Notice of Filing
Docket Text: Notice of Filing Transcript of Auction of July 17, 2008, Filed by Creditor Transworld Marine Co.. (Goldberg, Michael)

553 - Filed & Entered: 09/04/2008
Order on Application for Compensation
Docket Text: Order Granting Final Application For Compensation (Re: # [529]) for Charles A. Nichols, fees awarded: $9,527.50, expenses awarded: $0.00 (Rodriguez, Amelia)

554 - Filed & Entered: 09/04/2008
Certificate of Service
Docket Text: Certificate of Service by Attorney Arthur J. Spector Esq (Re: [553] Order on Application for Compensation). (Spector, Arthur)

555 - Filed & Entered: 09/04/2008
Transcript Available
Docket Text: Pursuant to Administrative Order 07 5 Policy on Electronic Availability of Transcripts of Court Proceedings, Transcript is now electronically accessible (Re: [533] Transcript, ) (Rodriguez, Amelia)

556 - Filed & Entered: 09/11/2008
Notice of Taking Deposition
Docket Text: Amended Notice of Taking Deposition Duces Tecum of Harry Tangalakis on 9/25/2008 at 10:00 a.m. Filed by Creditor 84 Marina, LLC. (Messana, Thomas)

557 - Filed & Entered: 09/11/2008
Notice of Taking Deposition
Docket Text: Amended Notice of Taking Deposition Duces Tecum of Jason Bodnick on 9/25/2008 at 2:00 p.m. Filed by Creditor 84 Marina, LLC. (Messana, Thomas)

552 is a transcript of the auction, amazingly enough, which is attached to a Motion for Sanctions against the auctioneer and/or the real estate agent. Mr. Spector makes his entrance on page 10. The Miami Herald says he represented "the marina's owner and an auction organizer" and after the auction was done, here's what happened back on the docks:

Meanwhile, back on the docks, that unidentified bidder was loudly demanding auction representatives return his $250,000 check, which had been sent with other bidders' checks for deposit in a trust account....

Botton handed over a check and signed a purchase and sale agreement. But unbeknownst to him, he said, somebody wrote in a bid of $13.3 million on his purchase and sale agreement. Botton didn't have $13 million, he said....

A video camera caught an exchange between Goldberg and a manic Botton, who repeatedly denied bidding on the marina. Botton's denial confirmed Goldberg's suspicions that the $13.3 million "preliminary successful bid" was not legitimate. "I know you didn't make a bid," Goldberg told Botton. "You were the missing piece of the puzzle."

I have to say, SCO never gets boring.

There will be a hearing in Florida, we learn from #548, on a motion to turn the case from Chapter 11 to Chapter 7 on October 7, and the fireworks hearing about sanctions, we learn in #549, is set for September 18 at 3 PM in the US Courthouse, Room 301, at 299 East Broward Boulevard in Fort Lauderdale, if any of you Floridians are curious and want to attend. Meanwhile, a lot of depositions will be going on. Oh, if you attend, please let us know. And do bring your dancing baloney meters.


The Bankruptcy Hearing Schedule for Sept. 16th, a Letter, and a Spector Sideshow, but Where's York? | 318 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Authored by: BC on Friday, September 12 2008 @ 12:06 AM EDT
Corrections here -- please include context so it can be found easily

[ Reply to This | # ]

News Picks
Authored by: BC on Friday, September 12 2008 @ 12:07 AM EDT
That the news that's fit to post.

[ Reply to This | # ]

Off Topic
Authored by: BC on Friday, September 12 2008 @ 12:09 AM EDT
Clickable links make it better

[ Reply to This | # ]

SCO employee wrongfully terminated after 23 years with the firm...
Authored by: Anonymous on Friday, September 12 2008 @ 12:33 AM EDT
A sad outcome of IBM's strategy to kill UnixWare.

Indeed, there are many IBMers still having their lunches thanks to that sound

[ Reply to This | # ]

Pluto, the *former* nineth planet
Authored by: Anonymous on Friday, September 12 2008 @ 01:16 AM EDT
Pluto is the namesake of a class of sub-planitary, solar
orbiting objects that are now called Plutoids.

[ Reply to This | # ]

Bankruptcy Hearing -- another non event
Authored by: bezz on Friday, September 12 2008 @ 01:25 AM EDT

No surprise. The Jabberwock Did gyre and gimble in the wabe. SCO is burning through the last of its cash. It has missed its last Monthly Operating report by over two weeks. The July MOR's indicate a cash burn close to $1 million and who knows what professional fees are outstanding. SCO just wants to drop that York thing as it has no more talking points benefit. Save that money for the professionals. Berger Singerman has some nice billings to date (and balances due) for this case.

Can we get a copy of 545 (Berger Singerman's bill) posted?

The Letter

Talk, talk, talk. It is not an issue for a bankruptcy court. You should have taken it up in a local civil court, before bankruptcy, if you think you have a case.

Spector Sideshow

There is a history to the Florida bankruptcy case in which Mr. Spector is mentioned, but I haven't read the background of motions and filings before this allegation was made. This is much more convincing than the last Crimson Capital "story", which is little more than early filings (claims / counterclaims) with no discovery, record or findings -- let alone a judgment or sanction. SCO, too, sounded pretty confident in its initial claims filing, for what that was worth. In the Florida case, the U. S. Trustee is investigating and the Bankruptcy Court Judge has ordered a hearing for sanctions; this isn't a couple of civil court allegations, responses and counterclaims.

But who are the sanctions targeting? A judgment against Mr. Spector in this case could be admissible in Delaware in light of Novell challenging whether SCO's SNCP deal was legitimate. Is he one of them?


Again, I now filter out anonymous posts in articles to which I am posting. If you want me to see it, please log in. While most anonymous posts on groklaw are predominantly insightful, I won't waste time responding to anonymous trolls.

[ Reply to This | # ]

SCO is negotiating with the IPO plaintiffs to lift the stay
Authored by: Anonymous on Friday, September 12 2008 @ 01:54 AM EDT

The August Berger Singerman bill has several items indicating that SCO was negotiating a stipulation to lift the automatic stay in favor of the IPO plaintiffs. This could be very big news. Most unusually, we're finding out about it before anything has been filed with the court.

[ Reply to This | # ]

Thanks for the grins, PJ, but...
Authored by: grouch on Friday, September 12 2008 @ 02:22 AM EDT
I know people in my home are wondering about my sanity -- it's just not normal to cackle at a computer monitor.

Giggles and guffaws are fine, but please educate the clueless amongst us how we, too, can hop aboard the SCO gravy train. It seems like everybody else is getting in on this "normal course of business" road to riches. Well, except Novell and IBM and a few other sticks in the mud. Is there a form somewhere to fill out to get paid embarassingly high fees for answering a telephone or shuffling some papers? Hey, I can stuff envelopes, in the privacy of my own home or in Delaware, if necessary! Surely that's worth a few thousand bucks a day in the SCOniverse.

Cash only; no stocks, please.

-- grouch

GNU/Linux obeys you.

[ Reply to This | # ]

The Berger Singerman Bill
Authored by: bezz on Friday, September 12 2008 @ 05:19 AM EDT
SCO has lot's of work going on. Not.

Most of the total 21.5 hours billed (15.4) were for an associate (Grace Robinson); Mr. Spector only billed 4.6 and another partner billed 1.5. Total bill: about $11,000.

So what did the associate work on? Mostly conference calls, the stock options motion, fee applications and extending the exclusivity (with Mr. Spector and the other partner).

The stock options work was very little: 6.6 hours of associate time and 1.1 hours of Mr. Spector's.

There were 3.2 hours of work relating to a stipulation for relief from stay for the IPO litigation (2.2 from the associate and 1.0 from Mr. Spector). I don't know what could be going on there because equity claimants are at the back of the line in BK. It might just be a formality to respond to the class action suit. Whatever the case, it doesn't look like a big issue.

Pretty dull billings considering SCO claimed, months ago, it could finalize a deal with SNCP. Oh, wait. SCO can't finalize a deal until it gets a final judgment in Utah and can file an appeal.

Oh, and SCO owes $234,894.84 to Berger Singerman. It would be nice to see the July MOR to figure out where SCO stands. I'm not sure if outstanding professional fees are accounted as restricted cash or as a post petition liability. Should be in there somewhere.

[ Reply to This | # ]

    The Employee's Letter
    Authored by: elderlycynic on Friday, September 12 2008 @ 06:52 AM EDT
    From the letter, I suspect that she DID consult a lawyer, but
    was badly advised (i.e. not told clearly enough that it needed
    to be in the form of an affidavit).

    [ Reply to This | # ]

    Bogo-sort can be the correct approach
    Authored by: Anonymous on Friday, September 12 2008 @ 08:53 AM EDT
    Bogo-sort is equivalent to repeatedly throwing a deck of cards in the air, picking them up at random, and then testing whether they are in order. It serves as a sort of canonical example of awfulness. Looking at a program and seeing a dumb algorithm, one might say "Oh, I see, this program uses bogo-sort.
    In fact there are some fields where "bogo-sort" is the correct approach. For example this is pretty much how the Large Hadron Collider works: it throws two bunches of random protons together, then tests to see whether the results illustrate any cosmic order. So sometimes this approach is awesome not awful - giafly.

    [ Reply to This | # ]

    My bogometer...
    Authored by: meat straw on Friday, September 12 2008 @ 09:53 AM EDT
    ...has been red-lined for years while following the SCOG cases. As a matter of
    fact, several bogometers have burned-out due to overload conditions.

    [ Reply to This | # ]

    "Where's the motion to give York some money?"
    Authored by: Anonymous on Friday, September 12 2008 @ 11:25 AM EDT
    That is probably the question that counselor McNutt was
    asking. It seems to have taken only six minutes to answer him.

    [ Reply to This | # ]

    • Six minutes - Authored by: Anonymous on Friday, September 12 2008 @ 08:00 PM EDT
    Shill, Bogusmeter, SCO, All The Lawyers >Right Out Of A Damon Runyon Novel
    Authored by: Anonymous on Saturday, September 13 2008 @ 12:34 PM EDT
    Damon Runyon (4 October 1884 10 December 1946) was a newspaperman and writer.[1] ,He was best known for his short stories celebrating the world of Broadway in New York City that grew out of the Prohibition era. He spun humorous tales of gamblers, hustlers, actors, and gangsters; few of whom go by "square" names, preferring instead to be known as "Nathan Detroit," "Big Jule," "Harry the Horse," "Good Time Charley," "Dave the Dude," "The Seldom Seen Kid" and so on. These stories were written in a very distinctive vernacular style: a mixture of formal speech and colorful slang, almost always in present tense, and always devoid of contractions.
    , So we now get "Bogus Master Daryl", "Never Get To Court SCO", " Shilly Spector" and so on. Let's have a "contest" and produce a top ten list of Runyon like names for the characters in this SCO saga. PJ could then do a "T" shirt with the TOP TEN LIST. I am sure a novel is going to happen here [likely written by me ;) ]

    [ Reply to This | # ]

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