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Dear Judge Gross - A Letter from SCO - Updated 4Xs: IBM Responds & Novell too & SCO Files Amendments to 1995 APA
Friday, July 31 2009 @ 01:49 PM EDT

SCO has sent a letter to Judge Gross, in which it agrees to an auction and the appointment of someone to oversee the auction:
07/31/2009 - 878 - Letter to the Honorable Kevin Gross Filed by The SCO Group, Inc.. (O'Neill, James) (Entered: 07/31/2009)

They also say they will accept "the involvement of an examiner under 11 USC section 1104 to advise the Debtors' board and to report to the Court on the sale process and the outcome of any auction." They suggest this is harmonious with comments made at the hearing in closing arguments, but if that were so, why a letter? Because, I suspect, they worry it didn't go so well at the hearing.

They also say this should alleviate concerns, but I have a few left. Like, what exactly are they selling? Novell's assets again? Where's the rehab plan after the sale? Who pays IBM and Novell? What about the poison pill? The last-minute Amendment that no one had time to consider at the last hearing? Who's in charge? And some of us remember a very odd auction in Florida.

Update: IBM's Response:

IBM has responded promptly:

07/31/2009 - 879 - Letter dated July 31, 2009 from Richard Levin, Esq. to the Honorable Kevin Gross (related document(s) 878 ) Filed by IBM Corp.. (Silverstein, Laurie) (Entered: 07/31/2009)

IBM points out that the appointment of an examiner would require a motion and there isn't any such motion. There is, however, a motion requesting the appointment of a trustee to convert the cases to Chapter 7. The court can instead appoint a trustee in Chapter 11 under USC Section 1112(b). That is properly before the court.

Second, IBM continues, the proposed duties of the examiner in SCO's request are only to advise the board and report to them about the sale of the assets "offered for sale in the current motion". What? What? What? That leaves the board in control of evaluating proposals. IBM would like a neutral to oversee the process, not SCO's board. IBM points out the following:

The offer from LNS Acquisition LLC that was introduced into evidence at the hearing last Monday, July 27, 2009, was not limited to the assets offered for sale in the current sale motion. IBM believes that a full and fair auction can be conducted only if the seller considers all bids for the debtors' assets, not just those selected by debtors.
I see IBM may have concern about flimflam auctions. So it suggests, should the court wish to appoint an examiner, that the role be expanded beyond SCO's proposed limits:
IBM's concern about the proposal to limit the examiner's role could be addressed by an order under the second half of Section 1106(b) ("any other duties of the trustee that the court orders the debtor in possession not to perform") expanding the role. As long as the Court's order made clear that the examiner would have all the rights, powers, functions and duties of a trustee with respect to the sale of any or all assets of the estates outside the ordinary course of business and with respect to the settlement of any litigation and that the debtors in possession were prohibited from participating in any aspect of any such sale or settlement except as specifically requested by the examiner, IBM would not object to the appointment of an examiner. IBM believes, however, that crafting such an order is an unnecessary distraction when a simple order for the appointment of a trustee is pending before this Court and would fully suffice.
Whew. See why you want your attorney to be a true expert in the specialty field you are involved in litigation in? Richard Levin, the Cravath attorney who wrote this letter, had to respond very fast to SCO's proposal. Both letters were written and filed with the court today. That means Levin had to know the bankruptcy law so well he could immediately remember a section of the law to be able to offer an alternative to SCO's proposal, just in case the judge was tempted, on top of pointing out the odd bits of the proposal. It's stunning lawyering to me. And it's why you always ask a lawyer you are thinking of hiring, have you handled this type of case before?

And why is it SCO doesn't want a bid from LNS Acquisitions? And why does IBM seem to want its bid considered? I don't know, but I think we can now guess that the picture is more complex than we originally suspected.

Is this not fun to watch? I love this stuff.

Update: Novell's Response:

Novell has filed a letter [PDF] now too. It has this on its mind:

We have received the Debtors' letter of July 31, 2009, offering to hold an auction of certain of Debtors' assets supervised by an examiner. No motion seeking anything like that relief is before the Court. Even if it were, Novell does not believe that this proposal satisfies Novell's concerns.
I gather Novell has some of the same concerns I mentioned, like what exactly is going to be sold? For how much? And:
Novell also expressed well-founded concerns over the nature of the assets sold and retained, the interrelationship between those assets and the Asset Purchase Agreement with Novell, and the business judgment of management and their fidelity to the interests of creditors. The Debtors' July 31 letter does not solve those problems. Instead it tends to confirm Novell's position that the Debtors' management has employed myopic judgment, trying to hang on to its alleged claims and a portion of its Mobility business to the exclusion of all other concerns.
Novell therefore opposes the new SCO brainstorm and asks the court to rule on the motions already before the court, "submitted to the Court after the conclusion of evidence and arguments on July 27". Here's the docket entry for Novell and in the meantime, SCO has filed the amendments we heard about at the hearing. Well, I only remember one amendment being mentioned, but there are two:

07/31/2009 - 880 - Letter to Judge Gross Regarding Debtors' Letter of July 31, 2009 Regarding Auction of Assets Filed by The SCO Group, Inc.. (Greecher, Sean) (Entered: 07/31/2009)

07/31/2009 - 881 - Notice of Service of Amendments 1 and 2 to September 19, 1995 Asset Purchase Agreement Between Novell, Inc. and the Santa Cruz Operation, Inc. (related document(s) 815 ) Filed by The SCO Group, Inc.. (Attachments: # 1 Amendment 1# 2 Amendment 2# 3 Certificate of Service and Service List) (Makowski, Kathleen) (Entered: 07/31/2009)

As you can see, the first filing is listed as having been done by SCO, but it's not. It's by Novell's attorney, Adam Lewis, at Morrison & Foerster. It's harder for the clerk to get it right when it's just a letter. Motions and other court filings clearly have headers that identify what the document is and whose document it is. With a letter, it's not as clear. We have Amendment 1 [PDF] already, and Amendment 2 is filed with the SEC, so I won't pay to get them again. But why? SCO is filing Amendments 1 & 2 to the 1995 Novell/Santa Cruz APA? Now? Whatever for? I will make one devilish guess. It would like the judge to consider how wonderful its prospects are if it can only get a turnaround on appeal in the Novell , where it believes Amendment 2 is vital to its success. The judge clearly stated that such evaluations would not be in this mix, but you know SCO. If the judge tells them at a hearing their time is up, they say, "No, it's not."

Alternatively, the angelic interpretation would be that since they say this filing is in connection with docket number #815, the proposed sales agreement, it could mean that SCO is a such a stickler for doing things right, it noticed that it attached the APA but not the two amendments, it now wishes to be thorough, cross every T and dot all the I's because this is SCO, and that's how they roll.

Update 4: Now that I got all the documents at least made available, and briefly described, I had time to think a little, and I see another reason for the SCO letter, aside from what has been so ably said by IBM and Novell. I recall Mr. Levin at the Jund 15th hearing, IIRC, asking SCO if the board had approved the last-minute proposal. He said yes, but of course they couldn't have approved that exact document, because the story was it was only signed as they all walked into the courtroom. Darl said something to the effect that the board had approved the idea of it, a parameter of what would be OK. No doubt the same question would be asked again, so this makes it official, in case that would be a stumbling block to the judge, that the board has now OK'd the sale. I don't know if this means they OK'd the last minute amendment, because I don't see it referred to by SCO. But I'm working mighty fast, so it's possible I missed something. Or else SCO has. Did that amendment ever get filed with the court so the public can view it?

Here's SCO's letter as text, and after that IBM's, and then Novell's [the links will take you directly there]:

**************************

[Pachulski Stang letterhead]
James E. O'Neill

July 31, 2009

CONFIDENTIAL

The Honorable Kevin Gross
United States Bankruptcy Court for the
District of Delaware
[address]

Re: The SCO Group, Inc, et al.
Chapter 11 Case No. 07-11337 (KG)

Dear Judge Gross:

The Debtors have now had a chance to consult with their board of directors and wanted to inform the Court that the Debtors would consent to an auction of the subject assets (i.e., those offered for sale in the current motion), and the appointment of an examiner to oversee the sale should the Court so direct. The Debtors agree to the involvement of an examiner under 11 U.S.C. § 1104 to advise the Debtors' board and to report to the Court on the sale process and the outcome of any auction. The appointment of an examiner should alleviate the concerns expressed at the hearing that a third party would need to be involved in the process to make sure it is fair to all bidders.

We are sending a copy of this letter to the United States Trustee and the other movants (Novell and IBM). The Debtors believe that this proposal is in line with comments made at trial, including some made during closing arguments.


The Hon. Kevin Gross
July 31, 2009
Page 2

Mr. Spector and I wanted to convey this information to the Court on behalf of the Debtors. We appreciate the Court's consideration and patience in these matters. The Debtors look forward to moving ahead with the sale in this fashion and will work to accommodate the parties' schedules if the Court permits them to proceed in this manner.

Respectfully,

[signature]

James E. O'Neill

cc: William K. Harrington, Esquire (via email)
Joseph J. McMahon, Jr. Esquire
Adam A. Lewis, Esquire (via email)
Richard Levin, Esquire (via email)
Ryan E. Tibbitts, Esquire (via email)
Arthur J. Spector, Esquire (via email)

*****************************
*****************************

[Letter head]

CRAVATH, SWAINE & MOORE LLP

July 31, 2009

In re SCO Group, Inc., Chapter 11 Case No, 07-11337

Dear Judge Gross:

We have received a copy of the letter sent to you today by SCO Group, Inc, in this matter. On behalf of our client International Business Machines Corporation (IBM), we note the following in response.

First, the appointment of an examiner requires a motion under 11 U.S.C. § 1104(c). There is no such pending motion, The request for the appointment of a trustee, by contrast, is the subject of the pending motions to convert the cases under 11 U.S.C. § 1112(b). Under 11 U.S.C. § 1104(a)(3), the Court may order the appointment of a trustee in lieu of converting the cases. Unlike the proposed consent to the appointment of an examiner, the request for the appointment of a trustee is properly before the Court.

Second, the proposed consent to the appointment of an examiner limits the scope of the examiner's duties to advising the debtors' board of directors and reporting to the court on "an auction of the subject assets (i.e., those offered for sale in the current motion)", The offer from LNS Acquisition LLC that was introduced into evidence at the hearing last Monday, July 27, 2009, was not limited to the assets offered for sale in the current sale motion. IBM believes that a full and fair auction can be conducted only if the seller considers all bids for the debtors' assets, not just those selected by the debtors.

Third, the question of the scope of the assets to be included in an auction exemplifies and underscores why IBM believes that the appointment of an examiner does not adequately address the concerns stated at the hearing. The proposed examiner's role would be limited. Consistent with the statutory description of an examiner's duties in 11 U.S.C. § 1106(b), the examiner would only "advise the Debtors' board and to report to the Court on the sale process and the outcome of any auction", thus leaving the debtors' boards in complete control of the process and the evaluation of alternative proposals. As

(1)

we emphasized at the hearing, we believe it is important at this very late stage in these chapter 11 cases that a neutral control the process and the decision making.

IBM's concern about the proposal to limit the examiner's role could be addressed by an order under the second half of § 1106(b) ("any other duties of the trustee that the court orders the debtor in possession not to perform") expanding the role. As long as the Court's order made clear that the examiner would have all the rights, powers, functions and duties of a trustee with respect to the sale of any or all assets of the estates outside the ordinary course of business and with respect to the settlement of any litigation and that the debtors in possession were prohibited from participating in any aspect of any such sale or settlement except as specifically requested by the examiner, IBM would not object to the appointment of an examiner. IBM believes, however, that crafting such an order is an unnecessary distraction when a simple order for the appointment of a trustee is pending before this Court and would fully suffice.

Sincerely,

/s/ Richard Levin
Richard Levin

The Honorable Kevin Gross
United States Bankruptcy Judge
United States Bankruptcy Court for the District of Delaware
824 N. Market St., 6th Floor
Wilmington, Del. 19801

Copy to: Arthur J. Spector, Esq.
Copy to: Jamie O' Neill, Esq.
Copy to: William K. Harrington, Esq.
Copy to: Joseph J, McMahon, Esq.
Copy to: Adam A. Lewis, Esq,

(2)

*********************
*********************
*********************

MORRISON | FOERSTER

[Letter head]

July 31, 2009

Honorable Kevin Gross
United States Bankruptcy Court
District of Delaware
824 North Market Street, 6th Floor
Wilmington, DE 19801

Re:


In re SCO Group, Inc. et al.
United States Bankruptcy Court
District of Delaware
Case No. 07-11337 (KG)

Dear Judge Gross:

We have received the Debtors' letter of July 31, 2009, offering to hold an auction of certain of Debtors' assets supervised by an examiner. No motion seeking anything like that relief is before the Court. Even if it were, Novell does not believe that this proposal satisfies Novell's concerns.

We understand Debtors' proposal to be that the contemplated auction would be limited to the assets Debtors proposed to sell in the Third Sale Motion. As the evidence and arguments presented in the various objections to the sale motion, in the motions to convert, and at the July 27 hearing on those motions indicate, the price of the particular assets being sold was not the only problem with the Third Sale Motion. Novell also expressed well- founded concerns over the nature of the assets sold and retained, the interrelationship between those assets and the Asset Purchase Agreement with Novell, and the business judgment of management and their fidelity to the interests of creditors. The Debtors' July 31 letter does not solve those problems. Instead, it tends to confirm Novell's position that the Debtors' management has employed myopic judgment, trying to hang on to its alleged claims and a portion of its Mobility business to the exclusion of all other concerns.

(1)

MORRISON | FOERSTER

Honorable Kevin Gross
July 31, 2009
Page Two

Novell therefore opposes the Debtors' revised proposal and asks the Court to rule on the motions that were submitted to the Court after the conclusion of evidence and arguments on July 27.

Sincerely,

[Signature]

Adam A. Lewis

cc:





William K. Harrington, Esq. (via email)
Richard Levin, Esq. (via email)
Joseph J. McMahon, Jr, Esq. (via email)
James E. O' Neill, Esq. (via email)
Arthur J. Spector, Esq. (via email)
Ryan E. Tibbitts, Esq. (via email)

(2)


  


Dear Judge Gross - A Letter from SCO - Updated 4Xs: IBM Responds & Novell too & SCO Files Amendments to 1995 APA | 537 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Correction - As if PJ would make any
Authored by: complex_number on Friday, July 31 2009 @ 02:00 PM EDT
go here

---

Ubuntu & 'apt-get' are not the answer to Life, The Universe & Everything which
is of course, "42"

[ Reply to This | # ]

Off Topic Posts
Authored by: complex_number on Friday, July 31 2009 @ 02:01 PM EDT
You know the rules...

---

Ubuntu & 'apt-get' are not the answer to Life, The Universe & Everything which
is of course, "42"

[ Reply to This | # ]

Dear Judge Gross - A Letter from SCO
Authored by: Anonymous on Friday, July 31 2009 @ 02:02 PM EDT
Wouldn't all the terms of the auction have to be spelled out by the examiner
before going forward?

It seems to me that the judge should have already decided to kick the board
out. Just one more attempt to stay in control I guess.

wjarvis

[ Reply to This | # ]

News Picks Comments : Post 'em Here
Authored by: complex_number on Friday, July 31 2009 @ 02:02 PM EDT
...

---

Ubuntu & 'apt-get' are not the answer to Life, The Universe & Everything which
is of course, "42"

[ Reply to This | # ]

Look but don't touch!
Authored by: rsteinmetz70112 on Friday, July 31 2009 @ 02:05 PM EDT
They say they "consent to an auction" and "agree to the
involvement of an examiner" but only in the auction.

They get a choice?

This looks like a last ditch effort to keep control and keep anyone from looking
inside SCO.

---
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 | # ]

Dear Judge Gross - A Letter from SCO
Authored by: Kelledin on Friday, July 31 2009 @ 02:06 PM EDT
Could it be that Judge Gross forced this move? i.e. something similar to a corp
executive being advised to tender his resignation (and keep his golden
parachute) rather than be fired?

This is just so different from what we normally see from SCO, though it sounds
to me like SCO is scrabbling to keep some measure of control even in the face of
an adversely-minded court. I note that they hint at the overseer/examiner being
brought on as an advisor rather than having any real power.

---
<Lionel Hutz> I'll be defending...The SCO Group!!!??? Even if I lose,
I'll be famous!

[ Reply to This | # ]

I don't trust them
Authored by: DodgeRules on Friday, July 31 2009 @ 02:07 PM EDT
As Ethyl Mertz said to her friends when Lucy pretended to do something nice,
"Look out for a trick!"

[ Reply to This | # ]

Dear Judge Gross - A Letter from SCO
Authored by: jmc on Friday, July 31 2009 @ 02:09 PM EDT

It seems to me that the reference to:

Subject Assets (i.e. those offered for sale in the current motion)

says it all - Darl still gets to keep his pressssshhhhussss litigation if Judge Gross swallows that one.

[ Reply to This | # ]

And a response from IBM : KABOOM!!
Authored by: Baud on Friday, July 31 2009 @ 02:09 PM EDT
Docket #879:
There is no such pending motion.

[...]

The appointment of a trustee would suffice.

[ Reply to This | # ]

Translation
Authored by: Anonymous on Friday, July 31 2009 @ 02:21 PM EDT
"We know we lost the hearing. We know that you probably want to appoint a
trustee. Please don't go all the way there, just go a little bit."

MSS2

[ Reply to This | # ]

  • Translation - Authored by: Anonymous on Friday, July 31 2009 @ 02:33 PM EDT
  • Better Translation - Authored by: Anonymous on Monday, August 03 2009 @ 03:45 PM EDT
Dear Judge Gross -
Authored by: Anonymous on Friday, July 31 2009 @ 02:29 PM EDT
I would agree if you specify that Darl's golden parachute is changed to lead!

[ Reply to This | # ]

Bizarre letter header
Authored by: caecer on Friday, July 31 2009 @ 02:35 PM EDT
In what possible world could this letter be held by Judge Gross as "CONFIDENTIAL"?
All right, I know --- only in SCO's world.

[ Reply to This | # ]

Dear Judge - There's no harm in askin'
Authored by: webster on Friday, July 31 2009 @ 02:37 PM EDT
..
Lawyers to a great extent are professional beggars. It is their job to seek the
goals of their clients while also avoiding pitfalls.

We don't know who originated the idea for this letter, but it is certainly a
goal of SCO to get more time, maintain control, and avoid scrutiny.

SCO has been asking for exclusivity beyond reasonable expectation and getting
it. This examiner and auction are not goals of SCO, but they are better than a
trustee and an auction. They fear the worst so they ask for only worse.

This letter also squeezes in an unscrutinized, unopposed request that they
wisely omitted to make in the last motion. It could have been granted when
filed with a continuing battle over a trustee. Anyway, IBM has reportedly
chimed in with a letter of opposition. One wonders if they saw the filing or got
the copy first.

This is probably one of those lame requests that the lawyer makes rather than
dissuade his intense client of its fruitlessness. It's like asking for
probation for a fifth-time drug dealer. The lawyer asks for his client's (and
his own) sake knowing for sure that the judge is going to give time.


.



[ Reply to This | # ]

Dear Judge Gross - A Letter from SCO
Authored by: Baud on Friday, July 31 2009 @ 02:40 PM EDT
Because, I suspect, they worry it didn't go so well at the hearing.
MikeD reported that he indeed felt that. But I have another theory:

1. SCO's customers are running away as fast as they can.

2. Norris unsuccessfully ran after the customers and finally jumped in the train (with them).

[ Reply to This | # ]

Dear Judge Gross - A Letter from SCO
Authored by: HavingPun on Friday, July 31 2009 @ 02:43 PM EDT
The first thing i noticed is that at the top of the letter was the word
Confidential. Interesting that either a) they would put that on there, or b)
the courts would not treat it as sealed. Is there any conceivable reason to
have Confidential on a public document in the first place?

---
Have Pun, will travel.
My spelling is not a strong suit.

[ Reply to This | # ]

Dear Judge Gross - A Letter from IBM - "But, Judge, ...
Authored by: webster on Friday, July 31 2009 @ 03:11 PM EDT
..
IBM's response is thoughtful, authoritative, and powerful. The point out the
procedural [need a motion], and substantive [not enough examiner authority]
problems with an examiner. They also noted that SCO's offer hedged a bit on the
scope of the sale [same old assets problem].

Mirroring SCO's conciliatory tone, IBM concludes with a suggestion of an
examiner, but with trustee powers and no SCO involvement. They cite authority
for that, too. They must have fun surrounding SCO.


.

[ Reply to This | # ]

Novell mover for a Chapter 11 Trustee as an Alternate.
Authored by: rsteinmetz70112 on Friday, July 31 2009 @ 03:14 PM EDT
Novell actually included a Chapter 11 Trustee in their motion to convert.

From 751:

"Novell, Inc. (“Novell”), and its subsidiary, SUSE Linux GmbH (“SUSE” and
together with Novell the “Novell Parties”) move the Court to convert these cases
to chapter 7 (or to appoint a chapter 11 trustee).

---
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 | # ]

Dear Judge Gross - A Letter from SCO - Updated: IBM Responds
Authored by: Anonymous on Friday, July 31 2009 @ 03:18 PM EDT
This is the way the world ends. Not with a bang but a whimper.

The Hollow Men

T.S. Eliot

[ Reply to This | # ]

This letter has no meaningful content
Authored by: Anonymous on Friday, July 31 2009 @ 03:22 PM EDT

"The Debtors ...wanted to inform the Court that the Debtors would ... consent to an auction... and the appointment of an examiner ... should the Court so direct."

Well, that conveys nothing whatsoever, because if "the Court so directs", their consent is not required.

[ Reply to This | # ]

I guess SCO noticed what happened to Nortel in Judge Gross's courtroom.
Authored by: Anonymous on Friday, July 31 2009 @ 03:26 PM EDT
"But you've got to set your alarm for Volcano Day." - Captain Jack Harkness, "The Doctor Dances," Doctor Who

[ Reply to This | # ]

The last paragraph in IBM's response letter is very interesting
Authored by: Anonymous on Friday, July 31 2009 @ 03:27 PM EDT
IBM's concern about the proposal to limit the examiner's role could be addresses by an order under the second half of 1106(b) ("any other duties of the trustee that the court orders the debtor in possession not to perform") expanding the role. As long as the Court's order made clear that the examiner would have all the rights, powers, functions and duties of a trustee with respect to the settlement of any litigation and that the debtor in possession were prohibited from participating in any aspect of any such sale or settlement except as specifically requested by the examiner. IBM believes, however, that crafting such an order is an unnecessary distraction when a simple order for the appointment of a trustee is pending before this Court and would fully suffice.
Emphasis added. Does this mean that IBM wants to negotiate some sort of settlement with the SCO trustee?

[ Reply to This | # ]

words : Debtors vs Board
Authored by: Anonymous on Friday, July 31 2009 @ 03:35 PM EDT

The letter from SCO makes a clear distinction between the
Debtors and the BOD.

Not versed in the fine points, I always considered the Board
of Directors to stand for the company itself.. (see recent
conversation about the VP in Germany)

Is that usual?

[ Reply to This | # ]

Maybe I'm reading too much into this, but...
Authored by: Anonymous on Friday, July 31 2009 @ 03:36 PM EDT
I get the sense that this is the board of directors signalling that they might
be ready to cooperate. I wouldn't be surprised if this was done over
management's objections.

A pledge of compliance with a court order is seems unneeded, but it's an
attitude we haven't yet seen.

[ Reply to This | # ]

SCO Files Amendments 1 & 2
Authored by: rsteinmetz70112 on Friday, July 31 2009 @ 03:52 PM EDT
There could be a reason for this.

Novell filed an Objection to the Sale, which says the APA can only be assumed as
a whole. This could be related to that.

Is it possible the Judge asked a question about the agreements? I don't recall
these being submitted before. Was the APA ever submitted?

---
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 | # ]

881 looks like just a Notice of service for an older filing (815)
Authored by: Anonymous on Friday, July 31 2009 @ 04:03 PM EDT
07/31/2009 - 881 - Notice of Service of Amendments 1 and 2 to September 19, 1995 Asset Purchase Agreement Between Novell, Inc. and the Santa Cruz Operation, Inc. (related document(s) 815 ) Filed by The SCO Group, Inc.. (Attachments: # 1 Amendment 1# 2 Amendment 2# 3 Certificate of Service and Service List) (Makowski, Kathleen) (Entered: 07/31/2009)
Emphasis added.

It looks like they're just crossing some i's and dotting some t's. The ammendments appear to have been filed as exhibits to 815, which was the latest sales motion. Maybe they forgot to serve those amendments to some of the interested parties back when they filed 815 and it's exhibits.

[ Reply to This | # ]

Corporate Hospice
Authored by: webster on Friday, July 31 2009 @ 04:03 PM EDT
..
Barring a miracle, or extraordinary fairy machinations, Judge Gross is about to
make a series of final pronouncements. This will be sooner than the patient,
SCO would like. It may preempt their chance at the big score. The money has
run out; the Judge must do his daily duty. SCO will expire with maybe a few
organs donated for benefit of the aggrieved creditors.

.

[ Reply to This | # ]

Perfect!
Authored by: jbb on Friday, July 31 2009 @ 04:37 PM EDT
Just in case Judge Gross had any lingering doubts about the nature of the people running SCO, all doubt has been eliminated. As Mark Twain said:
Better to keep your mouth shut and be thought a fool than to open it and remove all doubt.

---
You just can't win with DRM.

[ Reply to This | # ]

  • Just clarifying - Authored by: Anonymous on Friday, July 31 2009 @ 05:29 PM EDT
Why even bother with an examiner?
Authored by: Anonymous on Friday, July 31 2009 @ 04:38 PM EDT
"As long as the Court's order made clear that the examiner would have all
the rights, powers, functions and duties of a trustee with respect to the sale
of any or all assets of the estates outside the ordinary course of
business"

SCO does not have much of a real business, and it wants to put
its main assets on sale. And, as IBM pointed out, an external
examiner will have to have the same rights as a trustee.

So, why should the court bother itself with an examiner? Just
nominate a trustee and be done with those endless motions.
(And tell Darl to move the big circus tent to the appeal court.)

[ Reply to This | # ]

PSA Amendment is on Groklaw
Authored by: Steve Martin on Friday, July 31 2009 @ 05:01 PM EDT

[PJ:] Did that amendment ever get filed with the court so the public can view it?
Yes, it did. It's the Exhibit attached to docket # 870. Groklaw has it here.

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

[ Reply to This | # ]

Dear Judge Gross - A Letter from SCO - Updated 4Xs: IBM Responds & Novell too & SCO Files Amendments to 1995 APA
Authored by: Anonymous on Friday, July 31 2009 @ 05:03 PM EDT
It's another stall tactic.

[ Reply to This | # ]

Update 4
Authored by: RFD on Friday, July 31 2009 @ 05:16 PM EDT
In his cross examination of Darl, Mr. Levin went over the minutes of the June
11, 2009 BOD meeting. According to them, Mr. McBride went over the status of
the negotiation of possible sales. He then told the board that that they had to
get a sale ready to present at the June 15 hearing in order to try to stave off
conversion. The board authorized him to pursue a sale. The board later
ratified the agreement Darl presented at the June 15 hearing--sorry I don't
remember the date. I remember thinking at the time that that exchange probably
did not help Darl's credibility with Judge Gross--that is not exactly the
picture Darl and Mr. Spector tried to paint at the June 15 hearing

---
Eschew obfuscation assiduously.

[ Reply to This | # ]

Now this makes the Judge's up coming rule interesting.
Authored by: HockeyPuck on Friday, July 31 2009 @ 05:18 PM EDT
I read in other posts about the time it takes Judge Gross will rule. Looking at
the news picks, that seems to explain a lot. The good Judge was also working on
another little bankruptcy case worth 1.13 billion dollars with Nortel and
Ericsson. After all, one SCO case equals many other cases. Now the
"letter". I'm surprised if he is able to rule in a week. But the delay
kings strike again, giving him even more to sort out.

At this point, he might as well wait until appeals are done. I would love to see
the look on SCO faces if the appeal is in Novell's favor. Then I might buy a
ticket to the next bankruptcy court date. That would be better than Shakespeare.

[ Reply to This | # ]

Dear Judge Gross - A Letter from SCO - Updated 4Xs: IBM Responds & Novell too & SCO Files Amendm
Authored by: karl on Friday, July 31 2009 @ 05:31 PM EDT
This is great...

As long as the Court's order made clear that the examiner would have all the rights, powers, functions and duties of a trustee with respect to the sale of any or all assets of the estates outside the ordinary course of business and with respect to the settlement of any litigation and that the debtors in possession were prohibited from participating in any aspect of any such sale or settlement except as specifically requested by the examiner, IBM would not object to the appointment of an examiner.

In other words, we don't object to an examiner as long as the examiner is really a trustee.

[ Reply to This | # ]

Semantics again
Authored by: Anonymous on Friday, July 31 2009 @ 05:42 PM EDT
They consent to "an auction" of the "subject assets",
identified as those in the current sale (which are still not identified ;-)).
And by the final paragraph, they've dropped the auction altogether, and they are
looking forward to closing "the sale".

I read that as not an auction in the normal general sense, but merely the sale
they proposed with a rider that says someone else can submit bids, but that SCO
can ignore them.

Yet another hole in their credibility.

[ Reply to This | # ]

You never know, ....
Authored by: AMackenzie on Friday, July 31 2009 @ 05:46 PM EDT
If you're a cricketer, this letter is a googly.

If you're a chess player, it's trying to provoke a positional weakness, to be
exploited later.

Everybody knows that the judge will be under some stress, desperately trying to
finish his work before the weekend, or possibly even trying to get it done by
midnight, Sunday.

This letter will increase that stress, even if the judge quite properly decides
to "ignore" it. From SCO's point of view, it might just push the
judge into making a mistake, something they can later appeal over. Why not?
They've got nothing to lose.

[ Reply to This | # ]

SCO's playbook getting thin
Authored by: Anonymous on Friday, July 31 2009 @ 05:55 PM EDT
I get the distinct feeling that IBM and Novell both anticipated this letter, and
had their responses ready.

The hat may finally be running out of rabbits.

[ Reply to This | # ]

This is very fast!
Authored by: tiger99 on Friday, July 31 2009 @ 06:30 PM EDT
After 6 years of moving at a sub-glacial pace, the end of SCO looks like being very swift. Reminds me of the Berlin Wall.....

But I see from the comments here that the Groklaw community are also very quick today.

Hopefully Judge Gross' week will be a real week, and it will all be over on Monday. I think we have just seen the dying convulsions of the corpse.

I feel sorry for whoever is appointed as trustee. It will be a truly miserable job sorting out this lot.

[ Reply to This | # ]

Am I mistaken...
Authored by: Anonymous on Friday, July 31 2009 @ 06:50 PM EDT
...or does this look a lot like SCO squirming?

(Now there's an image worthy of a horror movie.)

[ Reply to This | # ]

Red herring...
Authored by: Gringo on Friday, July 31 2009 @ 07:31 PM EDT

SCO says...

The appointment of an examiner should alleviate the concerns expressed at the hearing that a third party would need to be involved in the process to make sure it is fair to all bidders.

They must be myopic if they couldn't see that concerns expressed at the hearing were much, much broader than SCO suggests. How stupid of them to say such a thing! We just heard from Novel and IBM that an examiner would not alleviate their concerns, as any fool could have predicted.

BTW: Do you think we will we receive a response from the Trustee as well?

[ Reply to This | # ]

What are IBM and Novel's options
Authored by: Anonymous on Friday, July 31 2009 @ 08:22 PM EDT
Can they appeal Judge Gross' decision when he rules for SCO?

[ Reply to This | # ]

More filings Monday?
Authored by: Anonymous on Friday, July 31 2009 @ 08:39 PM EDT
Looks like SCO's latest roll of the dice is to keep flooding Gross
with more paper. Wouldn't be surprised if they keep filing new stuff
all next week, if the ruling doesn't come down Monday.

[ Reply to This | # ]

Dear Judge Gross - A Letter from SCO - Updated 4Xs: IBM Responds & Novell too & SCO Files Amendments to 1995 APA
Authored by: Anonymous on Friday, July 31 2009 @ 08:56 PM EDT
SCO is understandably desperate to avoid having a trustee appointed. One major
problem for SCO is that at the hearing Specter said that a Ch. 11 trustee would
be acceptable.

[ Reply to This | # ]

more letters?
Authored by: Anonymous on Friday, July 31 2009 @ 08:58 PM EDT
What do you bet that SCO will send the judge one or two more letters before he
is scheduled to issue his rulings?

[ Reply to This | # ]

What SCO is up to
Authored by: jws on Friday, July 31 2009 @ 11:49 PM EDT
I wonder if the whole game SCO is playing right now is to simply generate $$
going forward for the Unix lawsuits, by selling off the real assets of the
corporation (what they say they have) but retaining the rights to sue to one
company.

The mobile company with whatever it produces would be given to IBM and Novell
and other debtors as a booby prize to make the claim they have honored their
claims. Obviously if you leave them nothing they would have a case to pursue
their settlement further, but if you give them an empty bag, they got something
and can't complain. Sort of along the lines of leaving $1 in your will to those
you really don't like.

Everything they do seems to be crafted to appear as they are doing what they are
being compelled to do, when in actuality they are very good at doing the
opposite with every move. The only way to win with such a crafty adversary is
to be sure you are calling the shots and not them.

[ Reply to This | # ]

  • What SCO is up to - Authored by: Anonymous on Saturday, August 01 2009 @ 12:00 AM EDT
Dear Judge Gross - A Letter from SCO - Updated 4Xs: IBM Responds & Novell too & SCO Files Amendm
Authored by: Anonymous on Saturday, August 01 2009 @ 12:04 AM EDT

“A society becomes totalitarian when its structure becomes flagrantly
artificial,” Orwell wrote. “That is when its ruling class has lost its function
but succeeds in clinging to power by force or fraud.”

... doesn't this sound a lot like SCO as well?

As in the small, so also in the large - perhaps there is more to learn here than
just the facts of the task at hand ...

[ Reply to This | # ]

  • Donations - Authored by: ak on Saturday, August 01 2009 @ 04:36 AM EDT
Hey, wait a minute!
Authored by: Ian Al on Saturday, August 01 2009 @ 02:59 AM EDT
I'm sorry, I'll read that again.
07/31/2009 - 881 - Notice of Service of Amendments 1 and 2 to September 19, 1995 Asset Purchase Agreement Between Novell, Inc. and the Santa Cruz Operation, Inc. (related document(s) 815 ) Filed by The SCO Group, Inc..
So, SCOG are providing amendments of a 1995 contract agreement between Santa Cruz Operation and Novell. Inc.

PJ suggests,

the angelic interpretation would be that [SCOG] noticed that it attached the APA but not the two amendments
Well, it attached an APA, but not all the documents that go together to make the APA to which these amendments form an integrated part.

I checked and found that SCOG have not presented the APA, Operating Agreement or any of the other documents that go to make the 1995 integrated agreement. Neither does it claim that the amendments now form part of the new signed APA. Indeed, there is already an Amendment 1 to the new APA with the court (the basis of the APA filed with the court on the Sunday night before the second conversion hearing).

These two documents cannot be read alone. They can only be understood as part of the integrated agreement of 1995. Are they referred to in any of the SCOG motions? Well, I must have missed that. Do they relate to any of the APA documents that SCOG have presented to the court (including the York APA)? No, SCOG make no such claim. So, I attach for the court's consideration a poor, photostat copy of my 1987 water bill. I make no claims that it relates to the SCOG bankruptcy, conversion or the proposed sales or that it is in any way helpful to the court, but enjoy anyway.

---
Regards
Ian Al

Linux: Viri can't hear you in free space.

[ Reply to This | # ]

Will this in any way, shape or form cause delay?
Authored by: Peter Baker on Saturday, August 01 2009 @ 07:38 AM EDT
The main output of SCO is IMHO scamming the legal process by
spinning it out.

So, key question: can this be spun so it prolongs the process
again? If yes, seek for no further motives IMHO..

[ Reply to This | # ]

Expert in their fields
Authored by: Waterman on Saturday, August 01 2009 @ 08:19 AM EDT
"Whew. See why you want your attorney to be a true expert in the specialty field you are involved in litigation in?"

And if you have friends who are lawyers in the field of a lawsuit you're involved in, but they aren't the one who is representing you, ask if the ones they reccomended ever beat them in court. No means your friend is either very good or lucky. Yes means the ones they suggest are as good as your lawyer friend.

[ Reply to This | # ]

List of voip replacements for skype
Authored by: Anonymous on Saturday, August 01 2009 @ 08:55 AM EDT
wikipedia J ack

[ Reply to This | # ]

Dear SCO
Authored by: ThrPilgrim on Saturday, August 01 2009 @ 09:15 AM EDT
Thank you for your letter dated July 31, 2009

I'm really busy right now so I'll get around to dealing with it just as soon as
I've finished with these motions to convert which we discussed when we last met.


yours,

Judge Gross



---
Beware of him who would deny you access to information for in his heart he
considers himself your master.

[ Reply to This | # ]

Dear Judge Gross - A Letter from SCO - Updated 4Xs: IBM Responds & Novell too & SCO Files Amendm
Authored by: AMackenzie on Saturday, August 01 2009 @ 10:58 AM EDT
> It's true that Microsoft has documented the RTF format, but they still
control it and can change it any time.

True. But, in practice, they don't. If you send a file.rtf, you don't first
need to check what version of MS-Word the other guy is using. You can even load
it into Emacs 23.1 (shameless plug - it was released a couple of days ago :-)
and read it, possibly first filtering out the formatting dross.

> I do not want an agency to muck with my CV. Of course, they often want a CV
without contact details, and I always supply that to agencies. They can have two
pdfs, one with and one without contact details, if they want. No problem.

Well, fine. But the less work an agency has to do to deal with your CV, the
more likely you are to get something useful back from them.

> I definitely do not want agencies "correcting" my spelling.

Well, judging from your "definitely", you probably don't need it.
;-)

Just to be quite clear, I don't like using RTF - but it's less loathsome than
.doc.

[ Reply to This | # ]

So... We are all waiting for Monday... Yes?
Authored by: SilverWave on Saturday, August 01 2009 @ 11:48 AM EDT
Just read through what I missed on Friday... Thanks for all the updates PJ.

Looks as if this could be the End For SCO :D

About time.

Here's Hoping we all get good news Monday!

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

How many LNS are there?
Authored by: IMANAL_TOO on Saturday, August 01 2009 @ 11:53 AM EDT
How many LNS are there? I found one LNS dealing with bankrupt tech companies through Google.

On December 11, 2003, Lightyear Communications, Inc., (“LCI”) Lightyear Telecommunications LLC (“LTL”), and Lightyear Network Solutions, LLC (“LNS”) (collectively “Applicants”) filed an application with the Illinois Commerce Commission (“Commission”) seeking, to the extent necessary, permission to consummate a series of transactions through which LCI and LTL will emerge from bankruptcy via the transfer of substantially all assets to LNS. Applicants also seek certificates of service authority authorizing LNS to provide resold and facilities-based local exchange telecommunications services and resold and facilities-based interexchange telecommunications services throughout the State of Illinois pursuant to Sections 13-403, 13-404, and 13-405 of the Public Utilities Act (“Act”), 220 ILCS 5/1-101 et seq.
[...]
LNS is a newly-formed limited liability company formed under the laws of Kentucky for the purpose of carrying out the transaction described herein. LNS is a wholly-owned subsidiary of LY Acquisition, LLC (“Acquisition”). Acquisition, in turn, is owned by a series of new investors, including LANJK, LLC, SullivanLY, LLC, and Rice-LY Ventures, LLC. LNS, as the successor of LCI and LTL, will acquire substantially all of LCI and LTL’s assets, as well as many of the experienced personnel employed by LCI and LTL. After the transactions are complete, LNS’ principal place of business will be 1901 Eastpoint Parkway, Louisville, Kentucky. A copy of LNS’ Articles of Organization and evidence of its authorization to transact business as a foreign corporation in Illinois have been entered into the record as Exhibits G and H, respectively.

According to the application, the sale of assets has been approved pursuant to an auction conducted under the supervision of the U.S. Bankruptcy Court for the Western District of Kentucky on October 28, 2003. Pursuant to the terms of the Asset Purchase Agreement executed by Acquisition, LCI, and LTL, Acquisition agreed to an estimated price of $33.5 million through a combination of cash payment and debt assumption of the debtors to satisfy the creditors of LCI and LTL. At the time of closing, the assets of LCI and LTL will be transferred to Acquisition and then immediately transferred to LNS. After the transfer of assets to LNS, LNS will operate as a certificated carrier in Illinois and will continue to provide telecommunications service to all current LCI customers.

In addition, it is expected that Acquisition will be entering into a variety of financing arrangements at the time of consummating the aforementioned asset purchase. The application states that the details of this transaction have not yet been finalized, but indicates that this financing will involve Acquisition receiving a bank loan of approximately $14 million, secured by a guarantee of the assets of LNS, including the newly acquired assets from LCI and LTL. This transaction will occur simultaneously with LNS’ becoming a certificated telecommunications carrier in Illinois.
How many LNS are there? The similarity with this case seems more than coincidental.



---
______
IMANAL


.

[ Reply to This | # ]

  • LY==LightYear? - Authored by: Anonymous on Saturday, August 01 2009 @ 01:24 PM EDT
Windows 7 is Crippleware!
Authored by: SilverWave on Saturday, August 01 2009 @ 12:08 PM EDT
Crippleware is any product whose functions have been limited (or "crippled") with the express purpose of requiring the user to pay for those functions (either paying a one-time fee or continually paying a service)

"After you’ve installed Windows 7, you can move up from Home Premium to Professional with minimal extra effort, for an added sum, by using a program from Microsoft called Windows Anytime Upgrade. This unlocks the added features of Professional, which were actually already on your machine, but were hidden. You can do the same thing to move up to Ultimate."

Hasta la Vista: The Many Versions of Windows 7 Published on July 29, 2009 by Walter S. Mossberg

Hah reading the Mossberg article it just hit me! LOL

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Windows 7 and Browser Choice in Europe
Authored by: The Mad Hatter r on Saturday, August 01 2009 @ 09:13 PM EDT


Dave Heiner, Vice President and Deputy General Counsel of Microsoft has posted a message on Windows 7 and Browser Choice in Europe.

I have a feeling that this is going to go over like a lead balloon at the EU Competition Bureau.

It looks great the way he talks about it, but what he's actually saying is:

1) We won't install other browsers on Windows.

2) We will include IE

3) Rather than doing what you asked (the Competition Bureau) what we are going to do is to make the user who buys the computer start up Internet Exploder. When they start up Internet Exploder, we will redirect them to a page that we designed, that will mention other browsers, and we'll design it so that they will just use Internet Exploder because it's too much work to install anything else. Oh, and we are going to change the release version of Windows so that Firefox, Chrome, and Opera will run like molasses in January.

Yeah, I'm cynical.

---
Wayne

http://crankyoldnutcase.blogspot.com/

[ Reply to This | # ]

Updated 4X? I only see 3X
Authored by: GriffMG on Sunday, August 02 2009 @ 04:44 AM EDT
Am I missing something?

I only see three updates - although one is called Update 4?

---
Keep B-) ing

[ Reply to This | # ]

Dear Judge Gross - A Letter from SCO - Updated 4Xs: IBM Responds & Novell too & SCO Files Amendments to 1995 APA
Authored by: GriffMG on Sunday, August 02 2009 @ 03:09 PM EDT
Thanks people, particularly PJ, I get it now!

---
Keep B-) ing

[ Reply to This | # ]

Dear Judge Gross
Authored by: Jeffrey on Monday, August 03 2009 @ 01:42 PM EDT
How does Judge Gross deliver his decision? Is it posted, simply mailed to those
involved? How will we get to see it?

And finally, if one of the litigants doesn't like the decision (obviously) can
there/will there be more appeals/delays?

Sorry for the noob questions.

[ Reply to This | # ]

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