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More SCO Bankruptcy Filings
Tuesday, April 14 2009 @ 07:28 AM EDT

I don't know which of us will be happier when the SCO bankruptcy finally winds down, SCO or me. But faithful to the end, I have the latest bankruptcy documents for you.

SCO Group's MOR for February [PDF] lists a book value for SCO China as of February 28, 2009 at zero. That's on page 7 of the PDF. It was valued at $497,858 as of September 2007, when SCO initially filed for bankruptcy protection. And poof. It's gone. Buh-bye.

SCO Operations' MOR [PDF] shows net cash flow at (538,952), with cash on hand at $2,436,636, so the end is nigh, absent help from above. Well, from outside, anyway, something I never rule out.

On page 4, it shows no royalties from China via Japan, whereas cumulative filing to date in that category was $802,644. It also lists on that page $25,607 as money owed Novell, restricted cash, SVRx. Then page 12 lists another $147,390. On that same page, I see Japan has rather a lot in the bank, a couple of million, with total foreign subsidiary cash listed at $2,614,359, and SVRx restricted cash for Novell listed at $2,032,874. Why it's in Japan... well, I have no idea.

Did China get sold off, maybe, to pay Novell and the money went there? Considering SCO's expressed interest in not paying Novell until after the appeal, not to mention the SCO proposal in the last reorganization plan to pay them maybe in SCO stock someday, that probably isn't the right guess. Maybe so the court can't force anybody's hand? Or maybe SCO wants Novell to be like Moses and the Promised Land -- Novell can see the money in the distance, but it can never get there? Just kidding around. Maybe you brainiacs can figure it out. I read the filings, notice things, but I have no idea what it all means.

The transcript for the hearing held on March 30th is on file, if anyone lives in Delaware and wants to read it and tell us what's in there, but it's not available to the rest of us until July 8, when we'll get access to it, or at least a redacted copy if anyone asks for redactions. They have until the end of April to request that. Naturally, that is the one filing that I'm really interested in.

The list of all professional fees from the filing date to the end of February shows only one listing for 2009, a January fee to Tanner. Surely there will be more. But the total listed comes to $3,376,699 and $218,487 paid out. I wonder if they'll get the rest, considering the cash flow thing. They have all cashed their checks, I gather, except for $88,331 listed on page 12 as "uncleared disbursements". Now, if it were me, I think I'd get on that right away.

The filings:

04/06/2009 - 735 - Affidavit/Declaration of Service of Epiq Bankruptcy Solutions Regarding Supplemental Order Granting and Sustaining Debtors' First (Non-Substantive) Omnibus Objection to Claims Pursuant to 11 U.S.C. Section (502(b) and Bankruptcy Rule 3007 (related document(s) 730 ) Filed by The SCO Group, Inc.. (O'Neill, James) (Entered: 04/06/2009)

04/07/2009 - 736 - Debtor-In-Possession Monthly Operating Report for Filing Period February 2009 of The SCO Group, Inc. Filed by The SCO Group, Inc.. (Attachments: # 1 Affidavit of Service and Service List) (Makowski, Kathleen) (Entered: 04/07/2009)

04/07/2009 - 737 - Debtor-In-Possession Monthly Operating Report for Filing Period February 2009 of SCO Operations, Inc. Filed by The SCO Group, Inc.. (Attachments: # 1 Affidavit of Service and Service List) (Makowski, Kathleen) (Entered: 04/07/2009)

04/08/2009 - 738 - Certificate of No Objection (No Order Required) Regarding Seventeenth Monthly Application of Pachulski Stang Ziehl & Jones LLP, as Co-Counsel to the Debtors and Debtors in Possession, for the Period from January 1, 2009 through January 31, 2009 (related document(s) 723 ) Filed by The SCO Group, Inc.. (Attachments: # 1 Certificate of Service and Service List) (Makowski, Kathleen) (Entered: 04/08/2009)

04/09/2009 - 739 - Transcript regarding Hearing Held 3/30/2009 Remote electronic access to the transcript is restricted until 7/8/2009. The transcript may be viewed at the Bankruptcy Court Clerk's Office. [For information about how to contact the transcriber, call the Clerk's Office] or [Contact the Court Reporter/Transcriber Doman Transcribing, Telephone number (856)435-7172.] (RE: related document(s) 727 ). Notice of Intent to Request Redaction Deadline Due By 4/16/2009. Redaction Request Due By 4/30/2009. Redacted Transcript Submission Due By 5/11/2009. Transcript access will be restricted through 7/8/2009. (BJM) (Entered: 04/09/2009)

04/11/2009 - 740 - BNC Certificate of Mailing. (related document(s) 739 ) Service Date 04/11/2009. (Admin.) (Entered: 04/12/2009)


More SCO Bankruptcy Filings | 293 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here
Authored by: SirHumphrey on Tuesday, April 14 2009 @ 07:40 AM EDT
If so needed
the title, and
correction, may be

[ Reply to This | # ]

Off Topic goes here
Authored by: SirHumphrey on Tuesday, April 14 2009 @ 07:43 AM EDT
On topic not on
Off topic you may
Always polite, be

[ Reply to This | # ]

News Picks
Authored by: SirHumphrey on Tuesday, April 14 2009 @ 07:46 AM EDT
News picks discussion
here, goes,
contributions welcome

[ Reply to This | # ]

Haiku goes here
Authored by: SirHumphrey on Tuesday, April 14 2009 @ 07:50 AM EDT
Novell's SVRx cash
off to Japan,
in a slow boat from China

[ Reply to This | # ]

SCO China
Authored by: MDT on Tuesday, April 14 2009 @ 08:01 AM EDT
I wonder if possibly SCO China got shut down by the government for some reason?
That would be one explanation of how it could go from something to nothing.

I'm hoping one (or more) creditors bring this up to the judge? I'm hoping that
suddenly vanishing value in a bankrupt company requires explanation to the
judge? For that matter, how come the SEC isn't putting someones feet to the
fire to explain the sudden loss?


[ Reply to This | # ]

Authored by: tiger99 on Tuesday, April 14 2009 @ 08:12 AM EDT
Strange how relatively large sums of money seem to move around between overseas subsidiaries which are probably doing little or no real business at this point in time.

It seems to me that if we simply believe what we see here, there will be nothing left for Novell, far less IBM's Lanham Act damages, because the residual cash is being routed to its intended recipients, whoever they may be, via a route which will be difficult to follow. But there may be things that we do not yet see.

It is somewhat disappointing that the BK court has not tied down the cash and other assets somehow, so they can't wander about overseas. Of course, the judge is limited by what the law allows, and IANAL, so I may be unaware of the limits to his power.

The sooner SCO are in Chapter 7, the better. That would end all of this nonsense. But as the company internals will then be fully exposed to the view of a bankrupcy trustee, I imagine that certain people will have a cunning plan to somehow avoid Chapter 7. I am guessing that there may be a cash injection via an overseas subsidiary, possibly Japan, any day now. Or maybe the entire business, such as it is, will move to Japan. Maybe there is a market there for the ME, Inc stuff?

Whatever, I think that the Japanese assets need careful watching.

[ Reply to This | # ]

  • Japan.... - Authored by: squib on Tuesday, April 14 2009 @ 09:16 AM EDT
    • Japan.... - Authored by: Anonymous on Tuesday, April 14 2009 @ 03:42 PM EDT
  • Japan.... - Authored by: davecb on Tuesday, April 14 2009 @ 10:08 AM EDT
  • Japan.... - Authored by: Lazarus on Tuesday, April 14 2009 @ 01:54 PM EDT
Loose ends
Authored by: Anonymous on Tuesday, April 14 2009 @ 09:11 AM EDT
It doesn't feel like there will be a judgment in the IBM case as a whole and in
particular, not on counterclaim 10. Counterclaim 10 held that there was no UNIX
copyright infringing code in Linux. It would have been nice to have a formal
decision on that. (It may not matter in a practical sense.)

It also doesn't feel like there will be any perp walks. Too bad. I really
would like to see a couple of people spend some time in jail.

[ Reply to This | # ]

SCO China book value
Authored by: Anonymous on Tuesday, April 14 2009 @ 11:08 AM EDT
SCO China book value:
11/30/2008: $364 971
12/31/2008: $45 029
01/31/2009: $0
02/28/2009: $0

Book value for SCO China was already at zero in January. It look likes it lost
most of its value in December

[ Reply to This | # ]

The Status Meeting
Authored by: bezz on Tuesday, April 14 2009 @ 12:23 PM EDT
Take a look at both the agenda for the March 30 hearing and the minutes. Items 2 and 3 were on the topic of SCO's disclosure statement and deadlines, procedures, etc. pertaining to it. They were both deferred to a status conference.

Without a transcript I don't know what happened in court so I can only speculate. Whatever the reason, the judge told the parties to get together outside the court room to discuss the matters. The possible reasons? Maybe IBM's and Novell's objections were too lengthy and complicated to work out in the court room setting; we already know both had a lot of objections to the disclosure statement.

Perhaps there is a bit more. The US Trustee's representative has been on the verbal record for a year that an independent fiduciary mat be needed. The latest disclosure statement appears inadequate. Perhaps Mr. McMahon had something to say on this matter and the whole thing got shoved to a status conference because there are additional matters to address before the judge can make a decision. Kind of a last chance for SCO to get its act together or face some consequences.

Maybe IBM and Novell said the same, they want an independent fiduciary. They have Mr. McMahon's comments from last April to support their argument for an independent fiduciary. And, to go way into the realm of speculation, maybe they mentioned in passing the possibility that the way SCO is dissipating its assets, the only logical outcome is they waste it all and will be forced to convert to Chapter 7 when they default.

I don't know what happened, but since SCO's lawyers were the ones who received the redaction notice, I suspect they are the ones who don't want this transcript available to the public in its current form.

I think PJ might be a bit off in her Biblical references. Novell has been doing more of a Joshua on SCO for the last 5 years and the Promised Land is clearing Linux of specious claims.

[ Reply to This | # ]

China liquidation was reported before
Authored by: Anonymous on Tuesday, April 14 2009 @ 02:00 PM EDT

The value of the China subsidiary was also shown as zero on the SCO Group MOR for January [722], and as slightly less than zero on the MOR for December [693]. The debtors reported cash receipts from a "China investment" on the November MOR for SCO Operations [666] and from a "China Investment - Royalty from Japan" on the December MOR for SCO Operations [692].

[ Reply to This | # ]

More SCO Bankruptcy Filings
Authored by: Anonymous on Tuesday, April 14 2009 @ 02:31 PM EDT
To try to be fair to SCOG, and to try to give a little to the other side, there
have been filings from their side, and well done SCOG. Yet, notably, and as has
been most often times, there have been no filings which indicate progress
towards a confirmable reorganization plan.

[ Reply to This | # ]

Burn Rate - More SCO Bankruptcy Filings
Authored by: Anonymous on Tuesday, April 14 2009 @ 03:34 PM EDT
"CO Operations' MOR [PDF] shows net cash flow at (538,952), with cash on
hand at $2,436,636, so the end is nigh, absent help from above. Well, from
outside, anyway, something I never rule out."

Is that per month, per quarter, per year?

If it is per month, then what's not done by Sept won't get done.

Of course, if they could cut down expenses. Maybe the CEO will volunteer for a
$1.00 per year salary like some other CEOs do when their companies are in
trouble. Maybe give back a bonus or two.
Oh, yes, must add. </satire>

[ Reply to This | # ]

Figures don't add up
Authored by: Baud on Thursday, April 16 2009 @ 12:33 PM EDT
Since june of 2008, SCO China has been depleted and the results were a decrease
of its value in the SCO Group report and a positive cash flow in the SCO
Operation report.
For example, the value of SCO China decrease from $484,349 to $366,360 between
05/31/2008 and 06/30/2008 and a cash flow of $114,399 from China was reported
for june 2008. Although the decrease in value does not perfectly match
($117,989) there is quite a logic in all of that.
But things got worse in november. The value of SCO China did not change:
$364,971 as of 10/31/2008 and 11/30/2008. But SCO Operation reported a cash flow
of $316,906 from China (evil docket 666). Unless the value of SCO China suddenly
increase by $300K in the mid of november SCO messed something in the MOR.

Someone may know a little bit more about that. When the november MOR were being
due, Berger Singerman billed 2 hours on 12/16/2008 for "Memos to SCO
regarding cash issue" (see docket 661). Then MOR were filed unusually late
on 01/21/2009.
And just to remind you, at the end of october 2008, SCO was in a critic position
with only $402,898 unrestricted cash left.

[ Reply to This | # ]

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