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Lots of Reactions to SCO's Latest Bankruptcy Moves - Updated 3Xs - York lurking in the shadows?
Wednesday, July 22 2009 @ 09:47 PM EDT

So much is happening at once in the SCO bankruptcy. Novell has filed a Response [PDF] to SCO's Notice of Cure Amounts. Oracle has filed a limited objection [PDF] to SCO's Notice of Cure Amounts and is sending in a lawyer [PDF]. IBM is adding yet another lawyer, Noah J. Phillips [PDF]. Oracle has a claim listed on Exhibit A [also continued here], but it says it has no clue what contract is involved.

Microsoft Licensing has transferred its $158,954 claim [PDF] to a third party, LNS. If Microsoft gets paid and Novell doesn't, I'd certainly like to know why.

[Update: Two quick things: Want to see something odd? Google the phone number given for LNS. It takes you to Hale Global, to contact info for Charles C. Hale. If you recall, as I didn't but a reader did, there is a "Charlie Hale" at York. One of our eyewitnesses, Webster, at the June 15th hearing noted that Darl McBride testified that one of the calls he got was from a Charlie Hale from York. Hale Global says it "specializes in acquiring, managing, and growing information technology companies." Isn't that weird? I have no idea what, if anything, it means. I also haven't yet been able to find any LNS LLC listed in the NYS corporate records. Maybe it's new? And here's York Capital Management's contact info, and you'll notice the phone number is almost the same as for Hale Global/LNS, the only difference being York ends with 1300, and Hale/LNS ends with 1337. The rest is identical. Is Microsoft trying to transfer its claim to York? Why would it? And why would York want that claim? My brain is exploding. I honestly don't know what it all means, but it's too odd not to tell you about.

Second, here's some info on a claims transfer. You can sell it cheap now, and let the new owner of the claim try to get profit from getting more money from the bankruptcy, while you are free of the whole process. Sometimes a notice of transfer means a change of name.]

Pachulski Stang submitted another bill [PDF], this one for May. I don't see any notations regarding possible deals. If you recall, in Berger Singerman's bill for May, we saw one deal referenced, but here there is no sign even of one, at least not that I could find.

Update 2: LNS was just formed this month:

File Number: 4706188
Incorporation Date /
Formation Date: 07/06/2009 (mm/dd/yyyy)
Entity Name: LNS LLC
Entity Kind: LIMITED LIABILITY COMPANY (LLC)
Entity Type: GENERAL
Residency: DOMESTIC State: DE
REGISTERED AGENT INFORMATION
Name: UNITED CORPORATE SERVICES, INC.
Address: 874 WALKER ROAD, SUITE C
City: DOVER County: KENT
State: DE Postal Code: 19904
If you look at the proposed APA with York, back in the day, the one that died on the vine, you find it was signed on behalf of York by Charles C. Hale:
With a copy (which shall not constitute notice) to:

Berger Singerman, P.A.
[address]
Attention: Arthur J. Spector, Esq.
[fax]

If to Purchaser, to:

c/o York Capital Management
[address]
Attention: Adam J. Semler, CFO and Charles C. Hale, Managing Director
[fax]

So, as an anonymous commenter phrased it who tracked this piece down, "Charles C. Hale (Hale Global) meet Charles C. Hale (York Capital Management)." And here's some background from ZoomInfo Groklaw member Dodge Rules found:
www.sd.com/corporate/management.html - [Cached Version]
Published on: 3/1/2007 Last Visited: 3/1/2007

Dr Emil Girczyc, President and CEO Charles Hale, Chairman of the Board Paul Bogonis, Vice President of Finance, Treasurer Kiyoshi Makino, Director, Japanese Operations Ilana Achimeir, General Manager, Israeli Site, Co-Founder Amir Schreiber, Vice President R&D, Co-Founder

... Charles Hale, Chairman of the Board

Mr. Hale led Summit's buyout in 2002 and became its chairman while also serving as its Chief Financial Officer for the first year.Mr. Hale also serves as General Partner of Divestiture Growth Capital (DivestCap) and is an executive with Sage Capital Growth (Sage), an affiliated fund.Previous to Summit Design, Mr. Hale was the Chief Financial Officer of SightLine Systems Corporation for its turnaround, and later became CEO.Prior to Sightline, Mr. Hale was an executive with Deutsche Bank AG's buyout fund, DB Capital Partners LP, where he specialized in technology buyouts. Before DB Capital, Mr. Hale was a Senior Analyst in Technology Corporate Finance at Alex Brown & Sons.Mr. Hale received an MBA, with honors, from Harvard Business School, and a B.A. from Yale University.

Amazing, no? If this is the same Charles Hale, there is now an X on the treasure map. And IBM is still doing discovery.

If you follow one of the links on the page, to find out what Summit Design was about, you need to then go to Wayback to find it. [Update: That page has gone walkabout. But you can find the same press release here.] The press release tells us what Summit Design did or does:

Summit Design is a supplier of industry-leading software solutions that address engineering challenges met during the specification and implementation design phases of complex hardware/software systems. Emerging and established electronics companies worldwide rely upon Summit's ESL solutions to analyze system trade-offs for rapid arrival at an optimized design specification. In turn, companies choose Summit's HDL solutions to ensure swift and successful specification implementation. Summit Design's advanced ESL and HDL solutions help system and SOC companies to deliver products that meet their performance and power targets in less time and with reduced schedule risk. Summit Design is headquartered in Burlington, Mass. with offices throughout the US, Europe, Japan, Israel, and ROA.
The press release was about Hale, Chairman of the Board, bringing in a new CEO and President, and here's a quotation from the new guy:
Summit Design, Inc., the world leader in electronic system-level (ESL) design solutions and methodologies, today announced that Dr. Emil Girczyc has joined the company as president and CEO. Emil assumes the role of President and CEO from Charles Hale, Chairman of the Board at Summit Design and former acting CEO for the company....

"Summit has targeted the key opportunity in ESL -- ensuring that complex embedded system designs deliver the desired functionality and performance within the requisite power consumption constraints before proceeding to the time-consuming task of design implementation," said Dr. Girczyc. "Given the tremendous depth of expertise within the Summit team and the excellence of its ESL solutions and methodology, I am very excited about leading Summit at this time of rapid growth in embedded system design complexity."

-- End update 2.]

Update 3: Here's the link between the two Mr. Hales:

Mr. Charles Hale is a Managing Director at York Capital Management. He joined the firm in 2007. Mr. Hale focuses on private equity with a special emphasis on technology. Previously, he was the Chief Executive Officer of SightLine Systems Corporation. Mr. Hale served as President of DivestCap Management Corporation. He was an Associate with DB Capital Partners, L.P. where Mr. Hale specialized in tech¬nology buyouts from 2001 to 2002. From 1997 to 1999, he held various ... operational roles for Inso Corporation. From 1995 to 1997, Mr. Hale was a Senior Analyst in Technology Corporate Finance at Alex. Brown & Sons. He holds a B.A. from Yale University, where Mr. Hale was elected to Phi Beta Kappa, and an M.B.A., with Honors, from Harvard Business School.
-- End Update 3.]

[ Update 4, July 24, 2009: Some of the links above have been cleansed of the phone numbers, as of Friday. We are busy trying to reconstruct.]

Pachulski Stang were owed $60,000 or so in April, and SCO paid them around $10,000. So SCO has not kept current with the bills. This bill is for another $19,917, plus expenses of $1,006.07, so they're not keeping even. They are now in the hole to Pachulski Stang for $71,904.59.

The bill's almost all about dealing with the three motions to convert SCO from Chapter 11 to Chapter 7 filed by IBM, Novell, and the US Trustee. I see on page 1 that on May 18, there was a teleconference with Arthur Spector and James O'Neill on the motions to convert and "hearing strategy". That has the ring of truth. I never bought that "we just signed this deal on the courthouse steps so we don't have all the schedules and exhibits" stuff. By the way, the exhibits that were supposedly 500 pages turned out to be 70. If you read Novell's Objection to the sale, you'll see Novell didn't miss that.

Then for the next couple of days, you find the lawyers researching notice requirements for hearing on motions to convert. On the 19th, we find a note about "Research notice requirements for notice of hearing on motions to convert" and "Draft email correspondence to James O'Neill regarding timing of service on equity security holders concerning motion to convert". They revise notice of motion and then on the 21st and the 26th, we see another hearing strategy session. The latter includes "professionals" in the session, which I would assume would be the experts they wanted to come and testify at the hearing. Then there is another hearing strategy session on the 29th. And then the month comes to an end.

You know what I don't see? Any indication of any talks or information about any deals in the works. There is one notation about a call from an "R. Vad" about his SCO stock. But wouldn't you think that there'd be some notation about the deals they told us at the hearing were feverishly going on, if they really were?

Here are the filings:

07/20/2009 - 849 - Limited Objection To and Rights Reservation Regarding The Notice of Cure Amounts In Connection With The Assumption and Assignment of Unexpired Leases and Executory Contracts ('Limited Objection") (related document(s) 832 ) Filed by Oracle USA, Inc. (Huggett, James) (Entered: 07/20/2009)

07/20/2009 - 850 - Certificate of Service Oracle USA, Inc.'s Limited Ojection To and Rights Reservation Regarding The Notice of Cure Amounts In Connection With The Assumption and Assignment of Unexpired Leases and Executory Contracts ("Limited Objection") Filed by Oracle USA, Inc.. (Huggett, James) (Entered: 07/20/2009)

07/20/2009 - 853 - Affidavit/Declaration of Service and Service List of Epiq Bankruptcy Solutions, LLC, Regarding Notice of Cure Amounts in Connection with the Assumption and Assignment of Unexpired Leases and Executory Contracts (and Individualized Cure Schedule) (related document(s) 832 ) Filed by The SCO Group, Inc.. (Makowski, Kathleen) (Entered: 07/20/2009)

07/20/2009 - 854 - Monthly Application for Compensation [Twenty-First] and Reimbursement of Expenses as Co-Counsel to the Debtors and Debtors in Possession for the Period from May 1, 2009 Through May 31, 2009 Filed by Pachulski Stang Ziehl & Jones LLP. Objections due by 8/10/2009. (Attachments: # 1 Notice # 2 Exhibit A # 3 Certificate of Service and Service List) (O'Neill, James) (Entered: 07/20/2009)

07/21/2009 - 855 - Transfer/Assignment of Claim. Transfer Agreement 3001 (e) 2 Transferor: Microsoft Licensing, Inc. To LNS LLC. Filed by LNS LLC. (Morris, Matthew) (Entered: 07/21/2009)

07/22/2009 - 857 Motion to Appear pro hac vice . Receipt Number 0000, Filed by Oracle USA, Inc.. (Attachments: # 1 Certification of Counsel to be Admitted Pro Hac Vice) (Huggett, James) (Entered: 07/22/2009)

07/22/2009 - 858 - Response // Novell's Response to the Debtors' Notice of Cure Amounts Filed by Novell, Inc., SUSE Linux GmbH (related document(s) 833 , 832 ). (Attachments: # 1 Exhibit A) (Greecher, Sean) (Entered: 07/22/2009)

07/22/2009 - 859 - Motion to Appear pro hac vice for Noah J. Phillips. Receipt Number 158584, Filed by IBM Corp.. (Silverstein, Laurie) (Entered: 07/22/2009)

I see an Oracle OEM agreement from 1991 listed on page 19 of Exhibit A, part 1 [PDF]. But they are also listed on page 71 of part 2 [PDF]. And there are more, but if Oracle has no clue, I certainly don't. Novell has similar issues. What contracts is SCO talking about? The descriptions, Novell says, are "wholly inadequate". But a bigger issue is that SCO is purporting to transfer SVRX licenses, and it can't do that. The Utah court already ruled that it can't do anything with those licenses without Novell's permission. It reminds the court that SCO has no equitable interest in those royalties from those license agreements. It can neither assume nor assign those licenses without Novell's consent:

By the same token, given Novell's right to direct re-assignment of the SVRX Licenses to itself, Novell can be seen as the equitable owner/licensor of those licenses, which are licenses of copyrights Novell still owns. hence, even if SCO were trying to (and could) assume the APA, as well, it cannot assign the SVRX Licenses without Novell's consent since they are copyright licenses. Sunterra Corp. Novell does not give that consent.

Finally, SCO cannot assume the APA without also curing all defaults under it. Those defaults clearly include SCO's failure to pay the millions of dollars of SVRX Royalties embedded in the District Court's judgment. It has neither done so nor offered to do so.

Here are some details of Oracle's limited objection filing:
1. In connection with the Debtors' Motion For Authority to Sell Property Outside the Ordinary Course of Business ("Sale Motion"), the Debtors filed and served the Cure Notice. Exhibit "A" to the Cure Notice identifies Oracle as a contract counter-party with certain contracts to be assumed and assigned through the Sale Motion.

2. Based on the descriptions provided in the Cure Notice, Oracle is unable to identify the contracts described. No date, title or specific license agreement is identified. Without additional information from the Debtors, Oracle is unable to determine either which contract(s) the Debtors seek to assume and assign or the appropriate cure amount owed under the targeted contract(s).

3. Oracle has contacted Debtors' counsel in an attempt to obtain clarification regarding the contracts identified in the Cure Notice. It will continue to seek to resolve this concern prior to the hearing. However, to reserve its rights to be heard, if necessary, once this information is obtained, Oracle files this Limited Objection.

4. unXis, Inc. ("unXis") has been identified as the purchaser of the Debtors' assets. It appears that no auction is contemplated. If UnXis, Inc. is the eventual purchaser, and Oracle obtains the other information needed to allow it to consent to the proposed transfer, such as proper identification of the contracts and payment of the resultant cure amount, Oracle also, pre-assignment would need confirmation of unXis' willingness to execute an Oracle Assignment Agreement.

5. For these reasons, Oracle requests that the Court deny, at this time, the Debtors' request for an order authorizing assumption and assignment of any Oracle executory agreement in the absence of Oracle's consent.


  


Lots of Reactions to SCO's Latest Bankruptcy Moves - Updated 3Xs - York lurking in the shadows? | 440 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here
Authored by: PolR on Wednesday, July 22 2009 @ 09:52 PM EDT
To help PJ find them out.

[ Reply to This | # ]

OT thread
Authored by: PolR on Wednesday, July 22 2009 @ 09:53 PM EDT
For the on-topic off-topic discussions we enjoy so much.

[ Reply to This | # ]

Newspicks here
Authored by: PolR on Wednesday, July 22 2009 @ 09:54 PM EDT
Please place the news pick title in your comment title so we know what is being
discussed.

[ Reply to This | # ]

Talk about driving a point home...
Authored by: Anonymous on Wednesday, July 22 2009 @ 10:19 PM EDT
Taken from the top of page 5 in the PDF...
On the APA, Novell reserved certain important rights for itself. For example, it retained all copyrights.
To me, that just comes across as kicking SCO while their down. Is it bad that thought puts a smile on my face? I also liked, at the top of page 3 in the PDF...
Third, the debtors have nbot produced as yet (if ever they can) any evidence of adequate assurance of future performance by the proposed assignee.
Emphasis in original.

[ Reply to This | # ]

Who is LNS LLC?
Authored by: Anonymous on Wednesday, July 22 2009 @ 10:26 PM EDT
I did a google search for them and turned up nothing.

A search on their phone number listed in the 855 filing points to Hale Global.

Quoting from their website: "Hale Global specializes in acquiring, managing, and growing information technology companies."

dc-houston

[ Reply to This | # ]

Lots of Reactions to SCO's Latest Bankruptcy Moves
Authored by: ChrisP on Wednesday, July 22 2009 @ 10:30 PM EDT
Now let me see. What would SCO be selling if Novell refuses to allow the
assignment of the APA and SVRX licenses?

---
SCO^WM$^WIBM^W, oh bother, no-one paid me to say this.

[ Reply to This | # ]

Lots of Reactions to SCO's Latest Bankruptcy Moves
Authored by: JamesK on Wednesday, July 22 2009 @ 10:40 PM EDT
With all that's happened, over the past few days, I expect SCO & lawyers
will be a tad busy, trying to dig themselves out from under this mess. :-)

---
Self Assembling Möbius Strip - See other side for details.

[ Reply to This | # ]

Noah Phillips
Authored by: Dave Ivedorne on Wednesday, July 22 2009 @ 11:06 PM EDT
Mr. Phillips appears to be a fairly new attorney. The U.S. Court of Appeals -
Second Circuit ( NY ) shows an admission date of 11/02/2007 ( a Samuel C.
Palmisano shows up too - admitted 08/25/1993. Hi Sam! ). [1]

He's listed as a research assistant for a 2006 article in the Stanford Law
Review, named "Outside Director Liability". From the executive
summary,
"This Article analyzes the degree to which outside directors of public
companies are exposed to out-of-pocket liability risk — the risk of paying legal
expenses or damages pursuant to a judgment or settlement agreement that are not
fully paid by the company or another source, or covered by directors’ and
officers’ (D&O) liability insurance...

...We argue that, going forward, if a company has a D&O policy with
appropriate coverage and sensible limits, outside directors will be potentially
vulnerable to out-of-pocket liability only when (1) the company is insolvent and
the expected damage award exceeds those limits, (2) the case includes a
substantial claim under section 11 of the Securities Act or an unusually strong
section 10(b) claim, and (3) there is an alignment between outside directors’ or
other defendants’ culpability and their wealth." [2]

He is also referenced in a 2006 document from the NYU Directors' Institute,
"Directors’ Fiduciary Duty of Care:
SEC and Judicial Expectations, Risks and Protections Developments in
Indemnification and Advancement of Fees"

From the executive summary,
"The federal government has increased pressure on firms under investigation
to stop them from advancing legal fees of individual employees who are targets
or subjects of the investigation. The impetus behind this policy is the
memorandum circulated to all U.S. Attorneys in 2003 by then-Deputy Attorney
General Larry D. Thompson, titled “Principles of Federal Prosecution of Business
Organizations.” This memo identified nine factors for prosecutors to consider in
determining whether to bring charges against a corporation. An assessment of one
of those factors – the cooperation of the organization with the government’s
investigation – includes consideration of whether the company appears to be
protecting culpable individuals." [3]

Methinks he has shown up just now for a very good - and recent - reason.

Links ( sorry, I am considerably HTML impaired ):
[1] http://www.ca2.uscourts.gov/Docs/AttAdm/AdmP.pdf
[2]
http://securities.stanford.edu/research/studies/20060309_MK_OutsideDirectorLiabi
lity.pdf
[3] http://w4.stern.nyu.edu/emplibrary/Panel_4_Materials_-_Merged_-_05_12_06.pdf

---
IANAL

[ Reply to This | # ]

re:Novell's Response to the Debtors' Notice of Cure Amounts
Authored by: jacks4u on Thursday, July 23 2009 @ 12:00 AM EDT
Exhibit A to Novell's response would seem to indicate that SCO and/or Uxis would like to sit on both sides of the fence, regarding the APA. How can SCO even presume to 'assume and assign' the SVRX licenses without also assuming and assigning the basis for those licenses, the APA? Novell is correct in objecting to this in particular. Novell is also quite aware of IBM's inquisition into the propriety of this most recent Attempted Sale. I really wonder if Novell and IBM attorneys have each other on speed dial?

---
I'm not a Lawyer, this is my opinion only. I may be wrong, but I don't think so!

[ Reply to This | # ]

Spector
Authored by: nola on Thursday, July 23 2009 @ 12:56 AM EDT
Do we yet have a Pacer entry for Mr Spector, Esq. to withdraw?

Maybe he was unaware of the side deals. I suspect so.

If he was, he has good support for such a motion.

If he doesn't, I have to wonder.

[ Reply to This | # ]

The Skyline is falling
Authored by: Anonymous on Thursday, July 23 2009 @ 01:43 AM EDT
I'm wondering when IBM deposed Darl could they have asked if he is the Skyline
Cowboy?

[ Reply to This | # ]

  • Yow - Authored by: Anonymous on Thursday, July 23 2009 @ 02:31 AM EDT
but if Oracle has no clue
Authored by: SpaceLifeForm on Thursday, July 23 2009 @ 02:52 AM EDT
Sniff, sniff. Do I smell more False Trading?



---

You are being MICROattacked, from various angles, in a SOFT manner.

[ Reply to This | # ]

Oracle Assignment Agreement
Authored by: SpaceLifeForm on Thursday, July 23 2009 @ 03:37 AM EDT
4. unXis, Inc. ("unXis") has been identified as the purchaser of the Debtors' assets. It appears that no auction is contemplated. If UnXis, Inc. is the eventual purchaser, and Oracle obtains the other information needed to allow it to consent to the proposed transfer, such as proper identification of the contracts and payment of the resultant cure amount, Oracle also, pre-assignment would need confirmation of unXis' willingness to execute an Oracle Assignment Agreement.
Why would they want that "confirmation of willingness" pre-assignment?

And what does "confirmation of willingness" really mean?

Is a "confirmation of willingness" that Oracle is looking for here really pertinent?

Does it really mean anything in court?

Why did Oracle say this?

---

You are being MICROattacked, from various angles, in a SOFT manner.

[ Reply to This | # ]

Is Microsoft trying to transfer its claim to York?
Authored by: Anonymous on Thursday, July 23 2009 @ 05:44 AM EDT
Why would York want it? Perhaps it is one way of getting paid for "services
rendered".

[ Reply to This | # ]

LNS/York Connection
Authored by: sk43 on Thursday, July 23 2009 @ 07:47 AM EDT
Interesting.

York Capital is at 767 Fifth Ave.
LNS is at 145 W. 58th st.

They are less than 2 block apart. South end of Central Park.

Hale does not list a street address on its website.

[ Reply to This | # ]

SCO's response to the objections by Novell and IBM is in!
Authored by: clemenstimpler on Thursday, July 23 2009 @ 07:55 AM EDT
It can be found on Epiq [PDF].

[ Reply to This | # ]

Lots of Reactions to SCO's Latest Bankruptcy Moves - Updated - York lurking in the shadows?
Authored by: Carter on Thursday, July 23 2009 @ 08:05 AM EDT
Maybe they are connected to this company:

Lange Network Solutions

[ Reply to This | # ]

A plea for decorum
Authored by: AMackenzie on Thursday, July 23 2009 @ 08:21 AM EDT
Hi, PJ and Groklawyers,

It looks like SCO as we know it might well be disintegrating in the next few
days. I wouldn't bet on it, though.

However, if it does happen, can we please all maintain some dignity over the
matter? It isn't fitting to gloat. It isn't decent to kick somebody when he's
down. Groklaw's rules specifically outlaw personal attacks.

Remember that a lot of blameless people, perhaps even totally innocent people,
will be suffering a lot, and they won't need any salt rubbing in. There's
lawyers who won't be getting paid. There's the remaining technical and
administrative staff at SCO, their spouses and families. There'll be people
who've invested money in SCO, perhaps a lot. Ironically, there's also Groklaw.
The consummation of its foremost desire will also be a loss, the loss of a
reason to exist.

And the people who aren't blameless? Please remember, they aren't bad people,
merely people who, while misguided and deluded, have done bad things. Much like
all of us really, if on a grander scale. Let us not hinder their
rehabilitation.

[ Reply to This | # ]

Hale Global
Authored by: Anonymous on Thursday, July 23 2009 @ 08:53 AM EDT

Hale Global used to be Divestcap and in 2003 Divestcap purchased the assets of Fortel Inc while Fortel was in bankruptcy.

It may be a red herring,or it could be what Hale Global does for a living.

Obviously a conspiracy would be more fun!

[ Reply to This | # ]

$150,000
Authored by: DaveJakeman on Thursday, July 23 2009 @ 08:54 AM EDT
Note carefully that amount -- give or take a few grand. You will find that it
has an echo around here.

[ Reply to This | # ]

LNS was formed in Delaware on 7/6/09
Authored by: Anonymous on Thursday, July 23 2009 @ 09:32 AM EDT
File Number: 4706188
Incorporation Date /
Formation Date: 07/06/2009 (mm/dd/yyyy)
Entity Name: LNS LLC
Entity Kind: LIMITED LIABILITY COMPANY (LLC)
Entity Type: GENERAL
Residency: DOMESTIC State: DE
REGISTERED AGENT INFORMATION
Name: UNITED CORPORATE SERVICES, INC.
Address: 874 WALKER ROAD, SUITE C
City: DOVER County: KENT
State: DE Postal Code: 19904
Phone: (877)734-8300

[ Reply to This | # ]

Charlie Hale info
Authored by: DodgeRules on Thursday, July 23 2009 @ 10:19 AM EDT
According to Zoo minfo (photo included):
www.sd.com/corporate/management.html - [Cached Version]
Published on: 3/1/2007 Last Visited: 3/1/2007

Dr Emil Girczyc, President and CEO Charles Hale, Chairman of the Board Paul Bogonis, Vice President of Finance, Treasurer Kiyoshi Makino, Director, Japanese Operations Ilana Achimeir, General Manager, Israeli Site, Co-Founder Amir Schreiber, Vice President R&D, Co-Founder
...
Charles Hale, Chairman of the Board

Mr. Hale led Summit's buyout in 2002 and became its chairman while also serving as its Chief Financial Officer for the first year.Mr. Hale also serves as General Partner of Divestiture Growth Capital (DivestCap) and is an executive with Sage Capital Growth (Sage), an affiliated fund.Previous to Summit Design, Mr. Hale was the Chief Financial Officer of SightLine Systems Corporation for its turnaround, and later became CEO.Prior to Sightline, Mr. Hale was an executive with Deutsche Bank AG's buyout fund, DB Capital Partners LP, where he specialized in technology buyouts.Before DB Capital, Mr. Hale was a Senior Analyst in Technology Corporate Finance at Alex Brown & Sons.Mr. Hale received an MBA, with honors, from Harvard Business School, and a B.A. from Yale University.

[ Reply to This | # ]

BusinessWeek page definitively connects Hale of York == Hale of Hale Global aka LNS
Authored by: Anonymous on Thursday, July 23 2009 @ 11:22 AM EDT
BusinessWeek page for JGD (Jamie Dinan) had bio of Charles Hale . This bio says the (ex)Managing Director of York and the DivestCap Hale are the same person.

[ Reply to This | # ]

Why Sell or Purchase Bankruptcy Debts?
Authored by: rsteinmetz70112 on Thursday, July 23 2009 @ 11:56 AM EDT
PJ asks why sell or purchase debts of a bankrupt company.

You might sell to get some money now vs more (or maybe less) money later. You
might sell to close a particular chapter. I did that recently in fact, a bird in
the hand so to speak.

You might buy on sheer financial speculation, that you can get more than you
paid for the debt (remember you are usually buying a steep discount).

Another reason is that you might want access to the courtroom or the creditors.
If you have an interest in the company but no debt you can't do much in a
bankruptcy. If you want to buy the assets it would be nice to have a say as a
creditor.

Finally you may want the underlying assets of the company and/or stock in the
new company. Debtors generally have a lot of control over the outcome of the
bankruptcy.

In the Adeplhia Bankruptcy a turn around specialist bought up a large amount of
worthless bonds so that he could control the restructuring and swap debt for
equity hoping to run restructured the company profitably and make a killing. It
almost worked. In the end he still made money when the company was sold off to
Comcast and Time Warner in pieces, since he had bought the debt for pennies on
the dollar.

I don't know why anyone would buy SCO's debt, unless they believe that all
creditors will eventually paid in full. It seems possible that the current offer
is only a starting position and the purchasers are willing to go higher.

---
Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

Getting Warm
Authored by: Anonymous on Thursday, July 23 2009 @ 12:22 PM EDT

If we take some of the comments so far.

In 2003 DivestCap purchased the assets of Fortel Inc by putting it into chapter 11 and buying the business assets while in chapter 11. The new business is called Sightline. Eventually the CFO of SightLine, one Charles Hale becomes CEO and in 2007 appears at Hale Global, the renamed DivestCap.

Now the buyer of SCO's assets needs $250k as deposit. We suspect that $100k comes from Darl and Hale now has $158k of SCO debt to play with, undoubtedly purchased at a discount.

It may sound a little like a conspiracy theory but it all seems too co-incidental.

The press release for the Fortel=>SightLine buy-out is quite interesting as the revision tags are still included. It's a lesson in how to gloss the detail of a transaction.

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Question about a line from #860
Authored by: mpg on Thursday, July 23 2009 @ 12:28 PM EDT
> Finally, some of the points raised by the Objections
> are best addressed at the hearing on the Motion, and
> will be so addressed at that time.

What might this be about? "Best addressed"? Is that typical? Any
reason SCO would stay their hand, other than to prevent IBM & Novell from
being prepared to respond?

-mpg

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Bottom Line
Authored by: sonicfrog on Thursday, July 23 2009 @ 02:10 PM EDT
Cutting to the chase:

If it can be shown that the $100,000 contributed by Daryl (Darryl, Darl) was
used as seed money for this transaction, ignoring the criminal implications)
wouldn't that automatically void this deal???

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Lots of Reactions
Authored by: relic on Thursday, July 23 2009 @ 02:27 PM EDT
Microsoft is bailing out, publicly at least. Debt vultures are settling in and
starting to feed. IBM is loading up yet more firepower. Oracle is joining the
"you can't sell what you don't own" chorus with a new verse of
"what the heck are you talking about anyway??"

This thing is at an end.

I don't think it really matters who Microsoft sold to. Maybe this relationship
in this deal is close enough to raise an eyebrow, but step back and look at what
happened - Microsoft's name is no longer associated. Perceived public support
from all of the big IT players is gone.

And that type of public support is critical for SCO to hold its audience with
capital players that can keep their dreams alive.

SCO has to know that the Hail Mary pass didn't work and major players and the
courts are going to force this thing to a close soon.

The only question left is when SCO will accept reality.

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Deutsche Bank AG
Authored by: Anonymous on Thursday, July 23 2009 @ 04:20 PM EDT
Wasn't that bank involved with some of SCO's earlier funding or ridiculously
over-positive stock analysis?

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York Capital into the briar patch
Authored by: Guil Rarey on Thursday, July 23 2009 @ 04:22 PM EDT
2 things so far...

First, York Capital Management is the d/b/a name for JGD Management Corp, which
does in fact file with the SEC.


Second, The shareholders of JGD Management are several other legal entities.
Running them back is my next step.


I was going to comment that Charles C. Hale does not appear on York's
"About Us" page, although Mr. Semler does, but all those appearing are
listed as Senior Managing Director and Hale's title is Managing Director - one
step down. In any event, he is one of the third tier people at the firm, not
one of principals. It's not clear if he is running the deal for one of the
principals or trying to develop it on his own.

Founder: James G Dinan
Chief Investment Officer: Daniel A. Schwartz

More directly, here are the company bios of the 2 heads of the private equity
groups, most likely Hale's boss or bosses:

Zalman Jacobs

Zalmie joined York Capital in March 2008 and is a Senior Managing Director,
Co-Head of Private Equity at York Capital and a partner of the Firm. Prior to
joining York Capital, he spent eleven years at Leucadia National Corporation,
where he co-led an investment group. Previously, Zalmie worked as a Vice
President at The Carlyle Group and as a corporate attorney at Davis Polk &
Wardwell. Zalmie received a B.A. in History, magna cum laude and Phi Beta Kappa,
from Columbia College and a J.D. from Harvard Law School.


Luis Medeiros

Luis joined York Capital in March 2008 and is a Senior Managing Director,
Co-Head of Private Equity at York Capital and a partner of the Firm. Prior to
joining York Capital, he worked at Leucadia National Corporation, where he
co-led an investment group for the past eleven years. Previously, Luis worked as
a Principal at The Carlyle Group. Prior to that, he was a senior executive at
The Artery Organization, a major Washington, DC real estate development,
construction and management firm. Before that, Luis was a Manager of Taxation at
Coopers & Lybrand specializing in structured transactions. Luis received a
B.S. in Accounting from the University of Maryland and an M.B.A. from The George
Washington University.

Connections? To Darl? Yarro? Microsofties high or low? Connections to Microsoft
for The Carlyle Group or Leucadia Corporation?
That's one chain to follow if anyone wants to pick it up.

I'm off to look at those shareholder entities

---
If the only way you can value something is with money, you have no idea what
it's worth. If you try to make money by making money, you won't. You might con
so

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SCO's response: They're gonna fight with their pants down, God bless 'em.
Authored by: webster on Thursday, July 23 2009 @ 04:30 PM EDT
..
They are going to fight. They are pursuing the deal such as it is. They are
unrepentant. Despite the fact that the only interested dealers for previous near
deals and this deal were procured by payments from interested SCO parties,
knowingly undisclosed by SCO parties, SCO will pursue this deal.

IBM will ask SCO: "Isn't it Grossly misleading to proffer such undisclosed,
self-dealing manipulations as a basis for the Court's decisions?"

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Evidence to be presented at hearing
Authored by: Anonymous on Thursday, July 23 2009 @ 04:41 PM EDT

Down towards the bottom of page 8 of the pdf,

At the July 27th hearing, the Debtors will provide evidence from which "the Court can make an informed decision on the relationship of the sale price to the value of the assets being sold," and why there is a sound business purpose for the sale. Exaeris, 380 B.R. at 744-45.

That sounds an awful lot like SCO was planning to talk up the value of its litigation strategy. However, the court won't be hearing any of that.

Are there any other good possibilities for evidence to support the value of whatever it is that they're selling? Any improvements in the value of Unixware and OpenServer would depend on SCO's success in its ill-fated litigation strategy, after all.

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SCOG dealt with the reality from the start
Authored by: Anonymous on Thursday, July 23 2009 @ 08:15 PM EDT
the US "justice" system gave them the tools they needed to slander
thousands of people with zero repurcussion for most of a decade and counting.

the US "justice" system gave their enablers the opportunity to support
SCOG in the slander and FUDDing.

This gave them (MS, for example) the time to do lots of new things to hold Linux
off just a little longer.

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Lots of Reactions to SCO's Latest Bankruptcy Moves - Updated 2Xs - York lurking in the shadows?
Authored by: Anonymous on Thursday, July 23 2009 @ 08:25 PM EDT
Of course its York

I dont think there was ever any doubt. Question is, who at Microsoft approved the transfer?

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Hale Global changed its website today to erase the incriminating phone number, why bother?
Authored by: Anonymous on Thursday, July 23 2009 @ 11:54 PM EDT
The Google cache to see the old page:
http://74.125.155.132/search?q=cache:OWueYkkxtroJ:www.sd.com/contact.html+2 12-300-1337
With the new page:
http://www.sd.com/contact.html

Obviously, the google cache will expire, and this link will be lost in time. I find it significant that Hale scrambled to change his website between this morning and this evening. Why create and a new LLC, and hide your name, and then erase your phone number? Is there an innocent explanation?

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Follow the money...
Authored by: HockeyPuck on Friday, July 24 2009 @ 12:28 PM EDT
All you have to do is follow the money and the truth comes out.

I see the York deal in another light now. For example, can anyone explain why
the need for SCO to pay York after the deal "fell through" (probably
there never was one)? SCO could'nt. Now we connect the dots. York = Charles C.
Hale = LNS LLC = Microsoft. Come on sports fans, this is just too strange to be
coincidence. I don't know why, but it is way too weird.

Then you have thee "under the table" payments. Sounds like another SCO
court case to me. The difference will be that SCO are the defendants (at least
Darl). Would this (or some of this) hanky panky fall under SEC jurisdiction?

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