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An Offer of Arbitration Docs from Ryan Tibbitts & A Proposed Amended Schedule for Tomorrow
Tuesday, December 29 2009 @ 08:42 PM EST

SCO General Counsel Ryan Tibbitts has filed a Declaration [PDF] with the bankruptcy court in support of Edward Cahn's objection to SUSE's motion for relief from the automatic stay. SUSE would like to finish the Swiss arbitration, as you know, and SCO would like to keep it from going forward. Tibbitts offers to submit to the judge sealed materials from the arbitration that he claims give evidence that SUSE is not likely to prevail in what he claims is the "highly contested" arbitration.

Then again, he would say that. But if that were really the case, why would SUSE be so eager to get that show back on the road? I think the arbitration suddenly got "highly contested" in SCO's dreams only after the appeals court ruled that there must be a trial before a jury on copyright ownership. Prior to that, SCO was using the "moot" word, IIRC. Remember at the trial in SCO v. Novell in Utah in 2008, Novell's lead attorney Michael A. Jacobs of Morrison & Foerster, told the court a bit about what was happening in the arbitration:

And, in particular, in the SUSE arbitration, which is still stayed pending the bankruptcy, when SCO was arguing to ... the arbitral panel: Don't go forward with this arbitration. There is no need. The Court -- the District Court in Utah, Judge Kimball, has already ruled on all the important issues here.

SCO said it was pointless for the arbitration to continue because the ownership decisions that the Court made here addressed all of SCO's claims relating to Linux.

It wanted to drop the arbitration. That's how hotly contested it wasn't. And it's still stayed. So exactly when did it become "hotly contested"? And if SCO was about to prevail, why did it argue to drop the whole arbitration? Is SCO telling stories? Is new SCO management starting to behave like old SCO management, or is it simply that they don't know all the water under SCO's bridge and are being misled?

I don't know. But Cahn has submitted a motion to seal [PDF], asking also that the arbitration materials be included in the hearing tomorrow, according to a new, proposed agenda [PDF] he's also filed.

Talk about last minute. They file the offer of the sealed materials today and set the deadline to object for the next day, the day of the hearing, December 30, one day's notice. In short, if anyone wishes to object, they'll likely have to do it orally at the hearing, with little time to prepare, which puts SUSE at a disadvantage. Some things never change with SCO, I gather. Well, this is a slight improvement. It's certainly better than showing up at the hearing tomorrow with the documents in your hand, with no notice at all, claiming that they were just signed in the parking lot, the ink still dripping on them, and you only found out on your way to the hearing or some such, a la the dancing Arthur Spector, and Darl McBride there with you, ready to swear on the witness stand it happened just that way.

The real question that lingers in my mind, though, is why didn't SCO submit this offer with their objection to SUSE's motion to lift the stay? One element both sides have to try to demonstrate is whether or not SUSE is likely to prevail in the arbitration. That's not news to either side that they have to address that in connection with any motion to lift the stay to proceed with arbitration, so I can't help but ask why this 11th-hour submission?

I am not a bankruptcy expert, though, so I could be missing plenty. Just guessing, but I think they either forgot, worried about confidentiality, or thought it wasn't needed, being so used to this bankruptcy judge doing whatever they ask, that it wasn't until they read SUSE's assertion in its Reply that "the Trustee does not even attempt to explain the evidence and arguments that supposedly support SCO's position" that they got rattled enough to gather some evidence and arguments to present.

But how? Their turn to speak was over, as far as the normal course of motion practice, assuming I've understood things, unless they get special permission, so here they are instead with a new motion that just happens to relate directly to the prior motion, offering to let the court have the "Confidential Arbitration Document" -- also later referred to as "Documents" -- instead of asking for the opportunity to respond to SUSE's motion directly.

Cahn also asks the court to bless this extremely short notice on his motion, so the document can be part of the hearing tomorrow. And considering that with this bankruptcy court, no one seems to really care about rules or normal practice, this will likely work.

Well, they'll care about trying to exclude the public from the part of the hearing where any arguments relate to the document(s) happen, I'm guessing. Rules apply to you and me, us little people, just not to SCO.

But just so you know, you are not supposed to sandbag the other side, not that you can tell from SCO's bankruptcy practice. They do it again and again, and each time the judge lets it happen. He likely will again. SCO will argue that the document(s) are directly pertinent to his ability to make the right decision on SUSE's motion, and judging from his previous reactions to SCO's sandbagging, he'll probably slide right along.

And so new SCO management is beginning to look to me a bit like old SCO management, I'm sorry to say. To be fair, perhaps there are lots of phone calls to SUSE and the US Trustee and everyone has agreed to go forward this way and we just don't know it, but why would SUSE agree? I expect SCO could argue that the document(s) belong with the issues that will be argued, that they are responding to something SUSE mentioned in the Reply, not in the Motion, that SUSE already has a copy of the document, and rather than postponing the hearing or going forward as a separate motion with a separate hearing, it makes sense to do it this way. But why not just ask the court to let you respond to SUSE directly, instead of with a new motion? Well, I'm not a lawyer, and they do what they think will work. That's their job.

On the other hand, I can't help but notice that SUSE filed its Reply on the 23rd. SCO already had the document, one assumes, on the 23rd. So why wait until the day before the hearing, unless the purpose is to sandbag? They needed to take time to research to argue why the judge should allow this to be sealed? Well, why doesn't SUSE need time to do that too, then? SUSE may not be ready to argue this at the drop of SCO's hat.

I confess I am disappointed to see this. Is there is a curse on SCO or something? It seems like everyone fighting for SCO ends up damaged in some essential way. But let's reserve judgment until tomorrow. It's conceivable, as loosely as bankruptcy courts are run, that they all chatted about this last week. We'll find out tomorrow at the hearing. If SUSE turns purple when Cahn's motion is argued, you'll know they aren't happy about being sandbagged. If not and no one seems to mind, we will know to file this in the "lotsa weird things happen in bankruptcy court" slot. Incidentally, if you are curious about why the arbitration matters, you can review this Joint Status Report that SCO and Novell filed with Judge Dale Kimball in August of 2007, letting him know what was still on the table after his ruling on the 10th, now partially overturned on appeal, and if you search the joint report by keyword 'arbitration', you'll see items that SCO at the time agreed were stayed by arbitration. And here's a handy chart.

All the new filings, so you can form your own impression:

12/29/2009 - 1012 - Declaration of Ryan E. Tibbitts in Support of Objection of Chapter 11 Trustee to SUSE's Motion for Relief From the Automatic Stay to Complete International Arbitration (related document(s) 951 , 992 , 995 ) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Fatell, Bonnie) (Entered: 12/29/2009)

12/29/2009 - 1013 - Motion to File Under Seal and Shorten Time For Notice and Response Thereto (related document(s) 1012 ) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Attachments: # 1 Notice # 2 Exhibit A-1 # 3 Exhibit A-2) (Fatell, Bonnie) (Entered: 12/29/2009)

12/29/2009 - 1014 - Amended Notice of Agenda of Matters Scheduled for Hearing Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. Hearing scheduled for 12/30/2009 at 10:00 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. (Fatell, Bonnie) (Entered: 12/29/2009)

Update: A witty reader, cpeterson, sums up in a comment SCO's position about the arbitration:
Please, your Honor, Please!
Don't make us go to arbitration, 'cause we'd WIN!


An Offer of Arbitration Docs from Ryan Tibbitts & A Proposed Amended Schedule for Tomorrow | 164 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here
Authored by: Erwan on Tuesday, December 29 2009 @ 08:48 PM EST
If any.


[ Reply to This | # ]

Off Topic
Authored by: bbaston on Tuesday, December 29 2009 @ 09:18 PM EST
Links appreciated.

Not for subjects related to PJ's subject.

imaybewrong, iamnotalawyertoo, icantremembernow, iamveryold

[ Reply to This | # ]

Secretly contested
Authored by: bbaston on Tuesday, December 29 2009 @ 09:23 PM EST
Seems that whatever "hotly contested" means to Ryan - it simply can't stand the light of day [or public scrutiny].

imaybewrong, iamnotalawyertoo, icantremembernow, iamveryold

[ Reply to This | # ]

Same old same old
Authored by: Anonymous on Tuesday, December 29 2009 @ 09:50 PM EST
"...Their turn to speak was over, as far as the normal course of motion
practice, assuming I've understood things, unless they get special permission,
so here they are instead with a new motion..."

And is anyone surprised? There are billable hours galore here, no accounting,
and plenty of parasites to jump on board. Sounds like a natural fit.

[ Reply to This | # ]

Smells like Delay (yet again)
Authored by: SpaceLifeForm on Tuesday, December 29 2009 @ 10:18 PM EST
The question is, why? What are they really up to now?


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

[ Reply to This | # ]

Ted Normand raises his hand
Authored by: Anonymous on Tuesday, December 29 2009 @ 10:43 PM EST
A PHV has been filed in his behalf by the trustee.
Fighting fire so as not to have to face arbitration.

[ Reply to This | # ]

"Your Honor, We object. They are trying to dupe the Court again!"
Authored by: webster on Tuesday, December 29 2009 @ 11:42 PM EST

Anyone that has been following GL for a significant period must realize how fortunate we are to follow such an omniscient and perceptive guide as PJ through the many fora and issues involved in the cases. As we have noted here before, it is not unusual that the only people who have memory and information at their fingertips are lawyers that have lived through all the hearings and filings. As for institutional memory, PJ is ahead of the new Trustee gang. Following GL and googling will teach one more than just law school. Tomorrow may be a wasted day just as a prior hearing with a last minute purchase contract, attended by yours truly. Gross may agree that Novell should get time to respond and then let the lawyers run on, stream of consciousness, all morning --about nothing. Before we get on with the filings, send PJ money, links on the left. She needs it.

  1. Tidbbitts from Tibbitts: Pardon the stutter. Tibbitts signs it because he is the highest man left and he is in a position to know as general counsel. One wonders what his position was on this late ploy. Did he caution Cahn not to try this stuff again? Are they desperate? Tibbitts' point is that "... the matters at issue in the SUSE Arbitration are highly contested and that SUSE is unlikely to prevail on the merits in connection therewith (as each term is defined in the Objection)." Talk about SCOspeak! Exhibit A which he attaches is SCO's Opening Memorial in the Arbitration. That's a European way of saying Memo. He should have asked consent and submitted the other side's too. If he asked, they didn't consent ergo highly contested. Of course this Memorial antedates Trustee, Judge Cahn, and is not anything he had anything to do with heretofore, but it is in his mouth now.
  2. The Credibility of the Declarant: If the Declarant sincerely believes that "SUSE is unlikely to prevail," why does he support the Trustee's objection to proceeding with said arbitration? Certainly the arbitration is much cheaper than a one-month jury trial. He is not believable.
  3. Cahn's Motion to Seal: They don't want PJ to dissect it and put it in an article. It has their answer to the UnitedLinux releases and the GPL predicament. One can move to seal: protect the estate or any entity in respect of a trade secret or other confidential research, development, or commercial information [or] ... to protect any entity against scandalous or defamatory matter contained in any paper filed in a case under the Code... Fed. R. Bankr. P. 9018
    P. 4, Item 1013. One Thousand Thirteen! SCO's argument against the GPL qualifies under all the cited reasons, no doubt. Novell should object if 1) they have no secrets, and 2) everything has already been exposed in any other litigation. Sort of like the code. It is hard to imagine that a bankrupt company has valuable secrets worth keeping. Indeed with SCO their secrecy confounds them.
  4. It would be stupid...: go to trial before the arbitration, or before the Supremes decide on certiori. Either could render the trial a total waste of time. Notice that Novell doesn't appear to be filing that writ early. Odds are they will wait to the last day. SCO must need a Novell verdict to attract another pass from the PIPE Fairy and get out of BK. Arbitration would nullify that verdict. Timing is everything.

There will be a decision or a delay tomorrow. One wonders if the courts like being subject to common scrutiny. Novell ought to show up by phone like Al and ask for more time.


Tyrants live their delusions. Beware. Deal with the PIPE Fairy and you will sell your soul.

[ Reply to This | # ]

Maneuvering to provide Judge Gross with cover...
Authored by: Gringo on Wednesday, December 30 2009 @ 01:04 AM EST

Judge Gross's indulgent attitude toward SCO has been met with heavy criticism in the past here on Groklaw. Now that SCO is being run by a trustee and fellow judge, we can only expect Judge Gross to be even more amenable to SCO's requests. A ruling against Suse's motion will likely be met with even greater skepticism and loud outcries, something that both judges would rather avoid.

SCO's request to file a sealed document is a maneuver concocted to provide Judge Gross with cover to rule against Suse's motion for stay relief in a manner that leaves no room for debate. Because Gross's ruling would then be based on the contents of the sealed Confidential Arbitration Document, we wouldn't be able to properly critique his decision, being left with insufficient information to draw any conclusions.

Democratic ideals would thereby be thwarted. This must not be permitted. SUSE need show only a "slight probability of success" on the merits. Therefore, SCO would have to have some document that shows that they have no probability of success whatsoever. It is highly improbable that SCO would posses such a powerful document. On the other hand, if they did possess such a thing, the need for openness would far outweigh the need for confidentiality, because nobody is going to believe it without seeing it.

[ Reply to This | # ]

What is it with Cahn?
Authored by: Anonymous on Wednesday, December 30 2009 @ 01:43 AM EST

Cahn has submitted a motion to seal [PDF], asking also that the arbitration materials be included in the hearing tomorrow, according to a new, proposed agenda [PDF] he's also filed.
Talk about last minute. They file the offer of the sealed materials today and set the deadline to object for the next day

Same old sleazy tricks that SCO always used to pull.

I thought this guy Cahn was supposed to bring some integrity to the proceedings?

Is there some kind of "SCO virus" that infects everyone who has any contact with them, turning honest people into manipulative scoundrels?

What do we know about Cahn, anyway?

[ Reply to This | # ]

Authored by: MadTom1999 on Wednesday, December 30 2009 @ 04:51 AM EST
There used to be a separate thread...

[ Reply to This | # ]

Invisible Lines
Authored by: sproggit on Wednesday, December 30 2009 @ 05:03 AM EST
I don't know anything of substance about Judge Edward Cahn.

But reading the history of his involvement with this case, two questions spring
to mind:

The first question is about ego. A lawyer, a Judge, now a bankruptcy trustee.
Thinking about Cahn's career in 'progression' terms, I wonder if he comes to
this case with a mindset of "My role is to help this company and their
debtors reach an equitable position", or if it is closer to,
"Conflict? Intrigue? Hotly contested legal case? Underdog you say? Bring it

If there is the chance that this is even close to the truth, what could or
should Novell and IBM do about that?

The second question is about (Novell's) tactics. Let's assume for the moment
that Cahn came in as a third party, entirely unfamiliar with the case, and that
comments here and elsewhere that can be summarised as 'the fix is in' are simply
not true. With a new trustee present, both the existing SCO management and
Novell/IBM are going to want to get Cahn 'on side' - ie sympathetic to their
cause. Obviously SCO are going to get the inside track on that, as Cahn will
spend time working with their management. [ But he seemed to have figured Darl
out early on].

But what about Novell or IBM. In their eyes (and ours, I guess), it's Novell and
IBM who are both wronged parties here. SCO's conduct on this entire case has
been specious from the outset, but what can IBM or Novell do in order to set
Cahn's train of thought off in that particular direction?

Thoughts, anyone?

A quick example to show where I'm trying to go with this. From the outset SCO
have said that they will only identify the infringing code under an NDA or in
sealed Court documents. We all know that the Linux kernel is developed entirely
"in the open", so there are no disclosures that SCO can make that have
not already been made.

We also know that Darl McBride spoke extensively about a "licensing
model" and quoted figures like $700 per server for a right to run Linux.

In other words, my inference is that if SCO disclosed their allegedly infringing
code, the Linux community would remove it post-haste (if it were genuinely
infringing). Such an act would also and instantly deprive SCO of any revenue
from a licensing model. In other words, SCO have tried to run this case like a
shake-down operation. There is no other way to look at this. The evidence is
there on the record. Is there no way that IBM or Novell or Red Hat or Autozone
or someone can sit down with Cahn and explain the history and technical niceties
of this case to him?

If this can be done and he doesn't react, then at least we would know for sure
what we're dealing with... [ And no, I don't think this can have happened yet.
Someone would have found a way to let the watching community know that, should
it be the case].

[ Reply to This | # ]

Hearing Minutes from PACER
Authored by: Steve Martin on Wednesday, December 30 2009 @ 12:10 PM EST
Hot off the press:

Petrofsky's motion to compel -- DENIED

Motion for Stay Relief -- "Judge will issue ruling within the next

Motion to file Tibbetts Declaration Exhibit A under seal -- GRANTED

I can hardly wait for our reporter's notes.

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

[ Reply to This | # ]

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