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Creditors Being Objected to by SCO Begin to Respond
Wednesday, October 22 2008 @ 10:07 PM EDT

Some of the creditors that SCO tried to toss out of the lifeboat with its First (Non-Substantive) Omnibus Objection to Claims are starting to show up, evidently mad as can be, to support their claims. And Pachulski Stang has filed a quarterly bill.

However, I worry that the responses to SCO's objection may not be sufficient to achieve the intended goal. IANAL, though, so ask one. What I think stockholders are supposed to do is file an amended proof of interest, providing whatever was missing from the initial filing, whether attaching a copy of the stock certificate or whatever else was the original problem. The reasons could vary, so there is no blanket instruction. If you care about your interest and/or claim, depending on why you are on the list, then, you really need to ask a lawyer to help you. This is all about getting the details right.

I see one of the filings asserts that one of the lawyers at Pachulski Stang is representing him, but I fail to see how that can happen, since Pachulski Stang represents SCO. Just saying. Seriously. Ask a lawyer to help you get this right. You can pay a lawyer for a visit, where he or she tells you how to amend a claim, and then do it yourself, if your funds are limited. You're allowed to appear pro se, including at the hearing by phone even, but you still need to know what you are doing. SCO's lawyers are not your lawyers. They are paid to help SCO, not you. That's how I'd see it, anyway. SCO's motion tells you exactly what you are supposed to do, as far as what information must be included. Follow the directions to the letter, if you don't want to be tossed. I'll repeat the instructions at the end.

Here are the documents:

580 - Filed: 10/16/2008
Entered: 10/22/2008
Response (B)
Docket Text: Response to First Omnibus Objection to Claims (Non-Substantive) Pursuant to 11 U.S.C. Section 502(b) and Bankruptcy Rule 3007 (related document(s)[574]) Filed by Angelo Dominick Faraci (TAS)

579 - Filed & Entered: 10/20/2008
Application for Compensation
Docket Text: Quarterly Application for Compensation [Third] and Reimbursement of Expenses as Co-Counsel to the Debtors and Debtors in Possession for the Period from April 1, 2008 through June 30, 2008 Filed by Pachulski Stang Ziehl & Jones LLP. Objections due by 11/10/2008. (Attachments: # (1) Notice # (2) Exhibit A # (3) Exhibit B # (4) Exhibit C # (5) Certificate of Service and Service List - Fee App# (6) Certificate of Service and Service List - Notice only) (O'Neill, James)

581 - Filed: 10/20/2008
Entered: 10/22/2008
Objection
Docket Text: Objection to First Omnibus Objection to Claims (Non-Substantive) Pursuant to 11 U.S.C. Section 502(b) and Bankruptcy Rule 3007 (related document(s)[574]) Filed by Lloyd Ring (TAS)

582 - Filed: 10/20/2008
Entered: 10/22/2008
Response (B)
Docket Text: Response to First Omnibus Objection to Claims (Non-Substantive) Pursuant to 11 U.S.C. Section 502(b) and Bankruptcy Rule 3007 (related document(s)[574]) Filed by Irving Bornstein (TAS)

Once again, from SCO's motion [PDF], here are their instructions:

16. Filing and Service of Responses. To contest this First Omnibus Claims Objection, a claimant must file and serve a written response to the First Omnibus Claims Objection (a "Response") so that it is received no later than 4:00 p.m. (Eastern time) on November 13, 2008. Claimants should read the proposed First Omnibus Claims Objection and Order and the exhibits carefully. A claimant who has timely filed a written Response and wishes to oppose the First Omnibus Claims Objection must attend or make other arrangements to participate in the hearing on the objection, which hearing is scheduled to be held on November 20, 2008 at 9:30 a.m. before the Honorable Kevin Gross, United States Bankruptcy Judge, at the United States Bankruptcy Court for the District of Delaware, [address] (the "Hearing").

17. Every Response shall be filed and served upon the following entities at the following addresses: (a) Office of the Clerk, United States Bankruptcy Court for the District of Delaware, [address]; and (b) Pachulski Stang Ziehl & Jones LLP, [address], Attn: Laura Davis Jones, Esquire with a copy to Berger Singerman, PA, [address], Attn: Arthur J. Spector and Grace E. Robson.

18. Content of Responses. Every Response to the First Omnibus Claims Objection must contain at a minimum the following:

a. a caption setting forth the name of the Court, the names of the Debtors, the case number and the title of the objection to which the Response is directed;

b. the name of the claimant and description of the basis for the amount of the Disputed Claim;

c. a concise statement setting forth the reasons why the Disputed Claim should not be disallowed for reasons set forth in the First Omnibus Claims Objection including, but not limited to, the specific factual and legal bases upon which the claimant relies in opposing the First Omnibus Claims Objection;

d. all documentation or other evidence supporting the Disputed Claim not included with the proof of claim previously filed with the Bankruptcy Court, upon which the claimant relies in opposing the First Omnibus Claims Objection and

e. the name, address, telephone number, and fax number of the person(s) (which may be the claimant or a legal representative thereof) to whom counsel for the Debtors should serve a reply to the Response and who possesses authority to reconcile, settle or otherwise resolve the objection to the Disputed Claim on behalf of the claimant.

19. Timely Response Required. If a claimant fails to file and serve a timely Response, then without further notice to the claimant or a hearing, the Debtors will present to the Court an order disallowing the Disputed Claim in its entirety and authorizing and directing the Claims Agent to expunge the Disputed Claim.

20. Service Address. If a Response contains an address for the claimant different from that stated on the Disputed Claim, the address in the Response shall constitute the service address for future service of papers upon the claimant with respect to the First Omnibus Claims Objection unless or until counsel for the Debtors receives written notice from the claimant or the claimant's counsel of a changed service address.

I'll repeat also the material from Bankruptcy Basics I quoted from in the earlier article, because it explains that shareholders hold an equity interest, not a claim:
Equity Security Holders

An equity security holder is a holder of an equity security of the debtor. Examples of an equity security are a share in a corporation, an interest of a limited partner in a limited partnership, or a right to purchase, sell, or subscribe to a share, security, or interest of a share in a corporation or an interest in a limited partnership. 11 U.S.C. § 101(16), (17). An equity security holder may vote on the plan of reorganization and may file a proof of interest, rather than a proof of claim. A proof of interest is deemed filed for any interest that appears in the debtor's schedules, unless it is scheduled as disputed, contingent, or unliquidated. 11 U.S.C. § 1111. An equity security holder whose interest is not scheduled or scheduled as disputed, contingent, or unliquidated must file a proof of interest in order to be treated as a creditor for purposes of voting on the plan and distribution under it. Fed. R. Bankr. P. 3003(c)(2). A properly filed proof of interest supersedes any scheduling of that interest. Fed. R. Bankr. P. 3003(c)(4). Generally, most of the provisions that apply to proofs of claim, as discussed above, are also applicable to proofs of interest.

Note the last sentence.

  


Creditors Being Objected to by SCO Begin to Respond | 206 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Korrections here
Authored by: bezz on Wednesday, October 22 2008 @ 10:20 PM EDT
Put them in the tattle

[ Reply to This | # ]

Off Topic here
Authored by: bezz on Wednesday, October 22 2008 @ 10:22 PM EDT
Please post the topic in the title.

[ Reply to This | # ]

Newspick Comments
Authored by: bezz on Wednesday, October 22 2008 @ 10:23 PM EDT
Latest, latest, read all about it!

[ Reply to This | # ]

Go, Lloyd!
Authored by: bezz on Wednesday, October 22 2008 @ 10:45 PM EDT

12,000 shares of post bankruptcy petition Pink Sheet SCO stock bought on February 21, 2008 -- $3849.99

Postage, envelope and sheet of paper to file a handwritten Proof of Claim (that states one of SCO's BK lawyers will be representing you) -- $0.75

Having your Proof of Claim published into the court record for the world to review -- PRICELESS!

And now for something completely different, a serious question. Where are all of the real creditors? There isn't enough interest among them to form a committee. Enough said.

[ Reply to This | # ]

SCO was right to object to these claims
Authored by: Anonymous on Wednesday, October 22 2008 @ 10:48 PM EDT

The objections are from small shareholders who don't understand what a claim is in bankruptcy. Common shareholders are not creditors; they're parties in interest. SCO quite correctly wants their pseudo-claims expunged under Rule 3007(d)(7), and they will be.

[ Reply to This | # ]

I suppose...
Authored by: OrlandoNative on Thursday, October 23 2008 @ 10:24 AM EDT
...that it's entirely possible that more than one entity could use the same law
firm - possibly not the same physical office - and not realize a 'conflict of
interest' is actually occurring, though one would think the particular lawyer
him/her/itself would check to see.

That said, I wonder what the requirements of a lawyer really are in such a case.
And how they judge it.

For example, say I have had an arrangement with some law firm for the past 20
years or so; maybe on some sort of annual retainer. Say also I have some
financial interest in SCO (wholey hypothetical, since I really don't). I pay
the law firm some small, annual retainer for their services.

Now, say SCO comes along and asks to contract the firms services, perhaps in a
different state and different office.

Just who 'wins' in this situation? Obviously, SCO could offer a lot more money
for the 'help' than I'm currently paying; but would it be 'ethical' to accept?
Would it be 'ethical' to terminate an existing (and ongoing, not yet expired)
contract to take a potentially more lucrative one?

[ Reply to This | # ]

Creditors Being Objected to by SCO Begin to Respond
Authored by: Anonymous on Wednesday, October 29 2008 @ 07:50 PM EDT
Based on the 4th PDF there were at least a dozen stock holders making claims of
anywhere from $500-5k in stock purchases that they think they are entitled to
assets.

These are people that purchased stock off the pink sheets for less than $1 share
value. I'm astounded anyone would be purchasing shares off the pink sheets with
the complete lack of understanding that they are an owner, NOT a creditor. Not
just that but there were at least a dozen that thought they were somehow
entitled to a refund of their purchase price. But as PT Barnum said, there is a
sucker born every minute.

People when you buy stock you aren't loaning anyone money. You are gambling that
the company in question will grow revenue and the stock price will go up or they
will pay a dividend. There is smart investing where you buy companies with
proven track records and good management (S&P500 or Dow Jones) and there are
companies that sell stock on the pink sheets which if you are halfway
intelligent you avoid like the plague unless you actually KNOW the company, the
management and the business plan personally and believe they will be successful.


When a company declares bankruptcy all the money and assets go to pay the
creditors (the people that loaned the company money, NOT the stockholders).
What's left, if anything, goes to the stockholders. If the assets don't cover
the debts everything the company has goes to the creditors and stock
certificates become worth the value the paper and ink they are composed of.

[ Reply to This | # ]
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