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SCO Bankruptcy: SCO Withdraws Motion Re Confidentiality
Thursday, November 20 2008 @ 07:44 AM EST

SCO has withdrawn its "Motion of the Debtors for an Order Providing that Creditors' Committees are not Authorized or Required to Provide Access to Confidential Information of the Debtors or to Privileged Information", which it filed in September of 2007, when it first filed for Chapter 11 bankruptcy protection.

Remember that? They filed it back when SCO thought someone might care enough to actually form a creditors' committee. But since that never happened -- the top 20 unsecured creditors (SCO Group's and SCO Operation's list, PDFs) being mainly friends and allies of SCO -- it obviates the need to protect SCO's secrets from any such committee. There was supposed to be a hearing on that back in October of 2007, but that never happened, and so now for some unknown reason, they are clearing it off the docket.

Here's the wording of the Notice of Withdrawal [PDF]:

PLEASE TAKE NOTICE that The SCO Group, Inc., et al., the debtors in possession (the "Debtors") in the above-captioned chapter 11 cases, hereby WITHDRAW, without prejudice, its Motion of the Debtors for an Order Providing that Creditors' Committees Are Not Authorized or Required to Provide Access to Confidential Information of the Debtors or to Privileged Information (Docket No. 11).
Without prejudice. Lovely SCO touch. If a creditors committee is suddenly formed, SCO is ready. Why now? I'm only guessing but probably they are tying off loose ends, because their time to file a reorganization plan is almost up. And despite investors being "so excited about the business prospects of working with SCO" that Stephen Norris mentioned at SCO's Tec Forum, so far nothing in writing to file with the court, so it does begin to look like the clock may run out first. What a surprise. Look for a December 31st filing. Oh, wait. SCO shuts down for Christmas, I seem to recall, and recovers slowly. They are "officially" closed from December 24th until January 1st, so I'm thinking we might look for something by the 24th, unless SCO's participation isn't required to file later.

If you recall, the judge gave SCO extra time to file a plan exclusively, until the end of the year. Here's the order [PDF] on that. The idea was to give them time to negotiate with investors, starting from the date in July when the Utah court made a decision on what SCO owes Novell.

In reviewing the transcript of that September hearing, I noticed a detail I hadn't noticed before. SCO's attorney, Arthur Spector, when arguing in favor of more time to file, mentioned that Novell would have to spend millions on an appeal to get the $3 million the Utah court ruled SCO owes them:

Why do you care if we have another few months? It's not like -- it's not like you're counting on us having that money today that we're squandering it tomorrow. This is Novell. This is a -- a three and a half million dollar judgment that they'll eventually get, that they'll have to fight millions of dollars in appeals to get to!

Lovely attitude. I guess the life lesson for Novell is don't do business with SCOfolk whereby SCO is in a fiduciary relationship with you. They keep your money and then make you fight for it. SCO did try to hold back on paying immediately even the amount of interest on what the court ordered, the amount the parties even agreed to put in the constructive trust, and then Novell filed a motion asking the bankruptcy court to make SCO pay right away. There was some back and forth between the lawyers for both sides about the constructive trust monies, and the latest word is that a settlement has been reached, but until they file the actual paperwork, we don't know what the settlement is. I'm assuming that Novell gets paid the interest at least on what SCO owes Novell, but the full payment is the part Spector is talking about. So, life lessons. Might that be part of why SCO seems to find it so hard to find new partners? You think?

Also Berger Singerman filed its quarterly application for compensation, but we've seen all those bills before. In the old days, I'd have compared them with the filings, just to be sure, but as Dylan put it in his song, I used to care, but things have changed.

Kidding. I still care. But bankruptcy court is not likely to.

Here are the documents:

11/18/2008 - 609 - Quarterly Application for Compensation [Fourth] and Reimbursement of Expenses as Co-Counsel to the Debtors in Possession for the Period from July 1, 2008 through September 30, 2008 Filed by Berger Singerman, P.A.. Objections due by 12/8/2008. (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) (Makowski, Kathleen) (Entered: 11/18/2008)

11/19/2008 - 610 Affidavit/Declaration of Service for service of the Notice of Agenda of Matters Scheduled for Hearing Filed by The SCO Group, Inc.. Hearing scheduled for 11/20/2008 at 09:30 AM at US Bankruptcy (related document(s) 608 ) Filed by The SCO Group, Inc.. (Makowski, Kathleen) (Entered: 11/19/2008)

11/19/2008 - 611 - Notice of Withdrawal of Motion of the Debtors for an Order Providing that Creditors' Committees are not Authorized or Required to Provide Access to Confidential Information of the Debtors or to Privileged Information (related document(s) 11 ) Filed by The SCO Group, Inc.. (Attachments: # 1 Certificate of Service and Service List) (Makowski, Kathleen) (Entered: 11/19/2008)


SCO Bankruptcy: SCO Withdraws Motion Re Confidentiality | 93 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here
Authored by: lnuss on Thursday, November 20 2008 @ 07:55 AM EST
Try to include something in the Subject line to indicate the problem...


Larry N.

[ Reply to This | # ]

Off Topic Here, Please
Authored by: lnuss on Thursday, November 20 2008 @ 08:00 AM EST
Please Changed the Subject line, and try to include clicky links, when


Larry N.

[ Reply to This | # ]

News Picks Discussion Here, Please
Authored by: lnuss on Thursday, November 20 2008 @ 08:02 AM EST
Please indicate which pick in the Subject line.


Larry N.

[ Reply to This | # ]

SCOGBK-608-ExA; page 24, 7/23/2008
Authored by: Anonymous on Thursday, November 20 2008 @ 09:58 AM EST
Darl McBride is a watchin the door.

[ Reply to This | # ]

Partner with SCO!
Authored by: Anonymous on Thursday, November 20 2008 @ 11:04 AM EST

Lend us you money. We promise to pay your money back. Just like we promised Novell.

[ Reply to This | # ]

  • Partner with SCO! - Authored by: Anonymous on Thursday, November 20 2008 @ 08:31 PM EST
SCO Bankruptcy: SCO Withdraws Motion Re Confidentiality
Authored by: drh on Thursday, November 20 2008 @ 12:48 PM EST
"...Arthur Spector, when arguing in favor of more time to file, mentioned
that Novell would have to spend millions on an appeal to get the $3 million the
Utah court ruled SCO owes them:"

This is one point where our system has utterly failed. Combine this with the
time and money it took to get to this point, and I cannot see how the legal
system provides a remedy.

Sorry PJ (et al), but situations like this only serve to undermine faith in the
system, not bolster it. The sad fact is that Novell has already expended far
more resources than it will ever recover. Had this involved a smaller business
the process would have ruined them long before they reached this point.

Just another day...

[ Reply to This | # ]

What I find odd...
Authored by: TemporalBeing on Thursday, November 20 2008 @ 01:04 PM EST
What I find odd though, is that despite all this, Novell is continuing the
agreement with SCO to let them stay in that fiduciary arrangement. Why haven't
they terminated the agreement yet? One would think that something like
withholding payment in the manner they have been found guilty of would let them
do so. At least, if I were Novell, I would have tried to exit that relationship
and take it back in-house several years ago so that it would not be a continuing
issue, only a 'past' issue - perhaps granting them a license in the process so
as not to adversely affect their business (since they wouldn't be able to
continue development otherwise).

[ Reply to This | # ]

A filing from the School of Silly Walks
Authored by: bezz on Thursday, November 20 2008 @ 01:33 PM EST
In a long line of silly walks SCO has filed in bankruptcy. I can't see any moves they are making that suggest a real effort to emerge from bankruptcy or the potential to do so.

They still have cash and have been living on that, but it is a bit odd they never got DIP Financing, the provider of which is at the top of the list for recovery in Chapter 11. Their court room statements and filings suggest they don't envision getting it either, because they allude to Novell attempting to delay SCO into default.

The lawyers spent plenty of time on Liquidation Analyses before the Utah ruling came in, but haven't since. A Liquidation Analysis places tangible values on assets. While they can spout off in court about the potential value of Me and the unreported and unverifiable assets and sources of income, a liquidation analysis will have to assign verifiable values to them. They can't use liquidation analyses from prior to the Utah ruling because that changed the picture. I am a bit surprised there was no revision work on that in September.

For all the protections Chapter 11 provides, there is one significant disadvantage to the debtor -- the creditors get to see the MORs and lawyers bills and can guess at what is going on. Yet SCO has managed to manipulate that twice already. Notice they announced York and SNCP v 0.1 before any of the paper work was done and rushed them to hearings before the paperwork was in? During SNCP, Berger Singerman also had a one month delay filing one of its bills until after the April SNCP court room debacle.

Let's see what the October Berger Singerman bill brings. If the charges are not in (at least) the $100,000 range, we'll know there is no concerted and realistic effort to come up with a reorganization plan. SCO will cynically throw the same kind of garbage on the table at the last minute as it did twice before.

[ Reply to This | # ]

Authored by: Steve Martin on Thursday, November 20 2008 @ 06:41 PM EST

Docket # 565 --- PDF on the way to PJ, no surprises, it seems to follow what we might expect after the recent filings.

"When I say something, I put my name next to it." -- Isaac Jaffe, "Sports Night"

[ Reply to This | # ]

SCO Bankruptcy: Time flies...
Authored by: justjeff on Saturday, November 22 2008 @ 12:14 AM EST
When I first saw this story I thought, "Has it really been a year
already?" Yes. It has.

Time flies when not a damn thing is happening.

I knew that chapter 11 would really slow things down, but this is silly. SCO
hasn't even filed their reorganization plan. They may not even bother to work
on one, instead hoping for a white knight. Or a gullible Uncle Moneybags. Not
to mention the challenges and hearings and arguments and alternative plans. Not
to mention hiring new management to execute the eventual court approved plan.
Not to mention actually executing the plan.

Still, they are in bankruptcy court of their own choosing. There are only two
ways out: The successful execution of a creditor and court approved
reorganization plan, or chapter 7 liquidation.

So SCO might be asking itself, "Why get out at all? Ever?" SCO will
be in ch.11 for years and years and years and years and years. Or until they go
into chapter 7, say good bye and turn out the lights.

[ Reply to This | # ]

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