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Yarro Deal Approved
Friday, March 05 2010 @ 06:45 PM EST

Believe it or not, here's our first report from today's bankruptcy hearing:
The bottom line is that Judge Gross found that the terms of the proposed loan are “fair, reasonable & adequate.” He then signed the order. SCO plans to close on the deal on Monday



  


Yarro Deal Approved | 332 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
After turning down better deals.
Authored by: Tim Ransom on Friday, March 05 2010 @ 06:49 PM EST
Because, under his watch, things deteriorated to this point.

Way to go, Judge Gross.

---
Thanks again,

[ Reply to This | # ]

SCO Did It!!!
Authored by: Anonymous on Friday, March 05 2010 @ 06:51 PM EST

It is officially a Zombie company! It has no assets, and continues to sue people ...

Actually, I wonder if double bankruptcy is achievable. Between the Darl deal and the Yarro deal, it has no more assets. The next time it runs out of funds, it is for real.

[ Reply to This | # ]

Yarro Deal Approved
Authored by: tknarr on Friday, March 05 2010 @ 06:52 PM EST

I think the problem is that Novell's the only major creditor who isn't also a SCO insider. So Judge Gross is looking at it and saying "Only one creditor's objecting, the majority aren't, so what's the problem?". Well, we know what the problem is, but Judge Gross hasn't had enough exposure to SCO's background.

[ Reply to This | # ]

Full report coming
Authored by: Anonymous on Friday, March 05 2010 @ 06:56 PM EST
I just sent PJ my full report, so it should be posted soon (unless there's editing required, or the file format is unacceptable). There was another reporter there as well (who I'm guessing is the source of this initial article), and this article went up while I was writing my full report. Eventually there should be two reports.

Enjoy all.

[ Reply to This | # ]

inventing grammar?
Authored by: Anonymous on Friday, March 05 2010 @ 06:56 PM EST
This is obviously a novel use of the phrase 'fair, reasonable & adequate' -
with
only tenuous links to the accepted definitions of the words?

[ Reply to This | # ]

Yarro Deal Approved
Authored by: Yossarian on Friday, March 05 2010 @ 06:56 PM EST
>"Believe it or not"

I believe it.

As I have claimed, long ago, the US "justice" system does not
care about delivering justice. Life-long employment, at high
pay, for lawyers is the real goal of the "justice" system.

[ Reply to This | # ]

Corrections here
Authored by: SpaceLifeForm on Friday, March 05 2010 @ 07:02 PM EST
If any.

---

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

[ Reply to This | # ]

OT here
Authored by: SpaceLifeForm on Friday, March 05 2010 @ 07:03 PM EST
Please make any links clickable.

---

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

[ Reply to This | # ]

Comes notes here
Authored by: SpaceLifeForm on Friday, March 05 2010 @ 07:04 PM EST


---

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

[ Reply to This | # ]

News Picks commentary here
Authored by: SpaceLifeForm on Friday, March 05 2010 @ 07:05 PM EST
Please note in the title which article you are referencing.

---

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

[ Reply to This | # ]

Yarro Deal Approved
Authored by: capt.Hij on Friday, March 05 2010 @ 07:10 PM EST
If corporations have the same rights as people, I want the same rights as
corporations. I want to be able to incorporate in Delaware. That way I can get
the same kind of treatment if I go bankrupt in exchange for paying lower taxes.
Seems fair....

[ Reply to This | # ]

Shocked.....
Authored by: Jimbob0i0 on Friday, March 05 2010 @ 07:20 PM EST
After all the briefs by Novell, the multiple issues surrounding Yarro's 'I win!'
clauses and so on....

Looks like the mysterious IP the MIT deep divers had and Blepp's briefcase is
going to vanish to reappear another time with SNCP... I mean they didn't even
have the initials different from teh original failed deals....

Did anyone manage to find the paperwork for if this LLC even exists?

[ Reply to This | # ]

What did Yarro really win?
Authored by: Anonymous on Friday, March 05 2010 @ 07:32 PM EST
Is this correct? He won:

1) The right to lose more money chasing after the money he has already lost
suing Novell and IBM;

2) The right to stiff Novell out of any chance of collecting the money that SCO
stole from Novell;

3) The right to any IP that SCO may own, which means the right to continue
wasting money suing innocent people for no good reason.

What else? Am I thinking about this correctly?

[ Reply to This | # ]

Yarro Deal Approved
Authored by: wvhillbilly on Friday, March 05 2010 @ 07:34 PM EST
What happens when SCO vanishes into Yarro's black hole?
Is the trial still on?
Is SCO still in chapter 11?
Or does it just go Poof! and vanish into nothingness, like the Legion of Doom in
Superfriends?

---
Trusted computing:
It's not about, "Can you trust your computer?"
It's all about, "Can your computer trust you?"

[ Reply to This | # ]

SCO should have hired Cahn earlier
Authored by: Anonymous on Friday, March 05 2010 @ 07:37 PM EST
SCO should have hired Cahn to run their scam, rather than McBride, much earlier
in this fiasco. They could have more efficiently bilked more innocent people
out of their money for longer. The man has talent.

[ Reply to This | # ]

is this a "change in control", or will it become one?
Authored by: Anonymous on Friday, March 05 2010 @ 07:43 PM EST
If this is now, or becomes in the future, a change in control of SCO will this
activate the "change of control" wording in Novell's agreement.

However, will the upcoming potential change in control at Novell negate any
effect this may have?

Just asking.

[ Reply to This | # ]

The real meaning of SNCP...
Authored by: jbeadle on Friday, March 05 2010 @ 07:50 PM EST
We've seen it before - Stephen Norris Capital Partners, and now we have Yarro
with his Seung Ni Capital Partners.

A simple google for "sncp" comes up with The Free Dictionary defining
it (among other things) as "Single Node Control Point".

Seems that's the entire focus of what we've been watching here for the last 7
years or so. Apropos, no?

Thanks,
-jb

.

[ Reply to This | # ]

Yarro Deal Approved
Authored by: seeks2know on Friday, March 05 2010 @ 07:53 PM EST
PJ, I believed you when you preached that things would work out right in the
end. It might take some time...

This is insanity. It's been how many years???? And the bad guys just keep the
circus going and draining the cash out of the good guys.

Justice system? I have not seen any yet.



---
There is but one straight course, and that is to seek truth and pursue it
steadily."
-- George Washington

[ Reply to This | # ]

  • Yarro Deal Approved - Authored by: Anonymous on Saturday, March 06 2010 @ 05:14 PM EST
  • Think wider - Authored by: Anonymous on Monday, March 08 2010 @ 11:16 AM EST
Look at it form the judge pov
Authored by: Anonymous on Friday, March 05 2010 @ 07:57 PM EST
While I obviously don't like it...
if you look at it from the judge's pov, I can see this.
I mean, he sees SCO basically be out of cash entirely, barely even able to make
payroll, if that. Chapter 7 isn't much better, it's not like there's tons of
assets to turn into money.

Anyone who puts money into a company in this state will want some very
favourable terms; I'm sure the judge has seen even worse than these. I suspect
the judge was rather surprised that anyone would poor money into this carcass as
all.. The judge realizes that winning against Novell and then IBM is the only
chance the company has to survive; and for the first part it needs live only 4
more weeks in practice. If they lose against Novell, it does not matter, Yarrow
gets nothing, and for that risk, there's a reward in the contract for the case
where SCO wins.

[ Reply to This | # ]

Report eMailed to PJ
Authored by: RFD on Friday, March 05 2010 @ 08:10 PM EST
PJ, I just sent you my full report. Let me know if you didn't get it.

---
Eschew obfuscation assiduously.

[ Reply to This | # ]

Yarro Deal Approved
Authored by: Anonymous on Friday, March 05 2010 @ 08:11 PM EST
the use of the very same initials just seems
like giving the finger to the court or an
inside joke

[ Reply to This | # ]

Yarro's Approved
Authored by: webster on Friday, March 05 2010 @ 08:28 PM EST

Yarro's Loan: This was up to Cahn. He took the easy, safe or wise route. He was faced with the prospect of a dead SCO or a SCO on life support awaiting some jackpot cure. He chose life support with the litigation lottery of billions still a dream. He could have stood up to the SCOnks and said pay the estate if you want the litigation claim so much. "Pay the creditors, pay the ongoing expenses, pay me." Yarro is willing to burn up to two million more as it is. Cahn has grossly underestimated their greed. They would have held on at a much greater price. Cahn is probably as risk averse as Yarro. Let's hope it was reason and brains over --cojones.

If anyone wants to "pierce the corporate veil," this loan will help. The SCO tarbaby shows no bias.

No one should be surprised or disappointed at this loan. SCO was the chosen vehicle [or troll] for this project since they never made any money and weren't capable of losing anything they didn't have. Everyone has known this from the start. Indeed they did too good a job and now need a loan. Add Yarro to the list of frustrated creditors.

~webster~

[ Reply to This | # ]

How many times...
Authored by: Anonymous on Friday, March 05 2010 @ 08:37 PM EST
...does Novell have to be screwed before people admit this thing is fixed?

It's about time for Novell to buy a judge too.

[ Reply to This | # ]

After losing the jury trial...
Authored by: Anonymous on Friday, March 05 2010 @ 08:43 PM EST
what assets will yarro actually get? What does piercing the corporate veil
mean? And, how would that benefit Novell? What if Novell is bought out, and
the new owners begin suing Linux users? Help!!!!!!!!

[ Reply to This | # ]

You have got to be joking... Yarro Deal Approved
Authored by: SilverWave on Friday, March 05 2010 @ 08:45 PM EST
I mean what?!

---
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 | # ]

so Yarro loans them $1 Monday - then is the effective owner?
Authored by: SilverWave on Friday, March 05 2010 @ 08:57 PM EST
the other shoe has dropped.



---
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 | # ]

Yarro Deal Approved
Authored by: Anonymous on Friday, March 05 2010 @ 08:59 PM EST
1. Have Yarro buy part of SCO.
2. Have McBride buy part of SCO.
3. Break Novel up.

Elliott Associates and Novell: All About a Game of Cat and
Mouse
http://www.consortiuminfo.org/standardsblog/article.php?story=20100304051547830

By now you've probably read endless takes on the news that
Elliott Associates, one of the oldest hedge funds, with
over US $16 billion under management, has made an
unsolicited offer for Novell.

By Microsoft buying Novel through a proxy what Microsoft
accomplishes is:
1) an end to the SCO vs Novel litigation,
2) the termination of the SuSE aberration
3) cork in the IBM trial. IBM could continue but!
4) termination of the Supreme Court appeal
5) continuation of Microsoft monopoly
6)destruction of a thorn in the side competitor.

and mostly a very large profit on the purchase of Novel at
fire-sale prices and the sell of various components of
Novel at prices based on asset rate of return.

For this to work Judge Cahn had to have some knowledge of
this plan for weeks. Not full knowledge but enough that he
did not place SCO into Chapter 7.

[ Reply to This | # ]

the old boys network - wow - see it and marvel - nt
Authored by: SilverWave on Friday, March 05 2010 @ 09:01 PM EST
.

---
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 | # ]

Why couldn't Novell have made an offer to purchase
Authored by: jjock on Friday, March 05 2010 @ 09:01 PM EST
Why couldn't Novell have made an offer of a Yarro bid +10% to
ensure that any "IP" that was important to this case would not
end up in the shredder? I find it difficult to believe that SCO was
able to get away with another smarmy deal. It is just sickening.
Bob

[ Reply to This | # ]

Hot Off PACER
Authored by: Steve Martin on Friday, March 05 2010 @ 09:08 PM EST

Get this: Judge Stewart has granted (docket 762) Novell's motion asking for a determination that First Amendment defenses apply to slander of title.

Based on the above, the Court finds that the First Amendment applies to slander of title claims, that Defendant’s press releases are not commercial speech, and that Plaintiff is a limited purpose public figure. As a result, Plaintiff must prove, by clear and convincing evidence, that Defendant acted with actual malice. The above reasoning is equally applicable to Defendant’s slander of title claim.

It is therefore ORDERED that Defendant’s Motion to Determine that First Amendment Defenses Apply to Slander of Title and Require Proof of Constitutional Malice (Docket No. 748) is GRANTED.

It is further ORDERED that Defendant’s Motions in Limine No. 2 and 3 (Docket Nos. 629 and 630) are GRANTED.

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

[ Reply to This | # ]

Hearing Report
Authored by: RFD on Friday, March 05 2010 @ 09:46 PM EST
I emailed this to PJ earlier, but there seem to be difficulties, so I decided to
also post it.

10:40 Arrived an empty courtroom 3

10:48 Bonnie Fatell, Edward Cahn and others arrived.

11:08 Judge Gross entered and Bonnie Fatell opened, introducing Edward Cahn

11:09 Mr. Cahn gave a status report—SCO is closing some foreign subsidiaries and
reducing others. He received expressions of interest from several hedge funds,
but the conditions they proposed were so onerous that he dismissed them out of
hand.

11:13 Bonnie Fatell calls Mark Fisler as a witness. He works for OPA financial
advisers. Apart from the litigation, he said SCO had four assets: a patent,
excess equipment, ME, and the operating business. The first three they are
trying to sell. He has visited some of the European subsidiaries and believes
with serious trimming, there can be a viable business. (He may be right, but it
is a dying one.)

SCO was in crisis mode when they arrived. They could survive two payroll
cycles. They started cutting costs in two phases. Phase 1, which they could do
quickly, consisted of RIF's which were “top heavy,” moving to smaller and
cheaper quarters, and eliminating any non-essential expenses.

Phase 2, involved downsizing the overseas operations. This can take time
because of foreign laws on severance pay.

In searching for financing, they had discussions with a hedge fund, Mr. Yarro,
and 10 or 12 others. Eight signed NDA's and examined the books. Mr. Yarro's
offer was the best.

Ms. Fatell handed the lawyers and Judge Gross Exhibit 1 and Mr. Fisler
explained how the money would be used--$1 million for operations, and $1 million
for litigation, including getting up to date with overdue professional fees.

11:52 Adam Lewis (Novell) by phone. Could this wait 3 weeks? Mr. Fisler didn't
say it couldn't wait, but that it be wise to do it as soon as possible.

11:57 Al Petrofsky by phone clarified a few details

12:00 In response to a question from Ms Fatell, Mr. Fisler confirmed the they
planed to close the deal Monday morning.

12:07 Mr. Lewis asked if Mr. Fisler had concluded that SCO, under the DIP, had
not made a robust offer to sell. Mr. Fisler declined to go that far, but he
clearly was not impressed by what SCO had done.

12:13 Argument by Ms. Fatell

12:19 Closing argument by Mr. Lewis—This proposal does not does not satisfy the
requirements for such an extraordinary loan.

12:23 Mr. Petrofsky—most of his questions had been answered but he did question
if Mr. Yarro's LLC legally existed.

12:28 Ms. Burton, attorney for Mr. Yarro, spoke up by phone and assured the
court that that the LLC is in existence under Utah Law

12:29 Ms. Fatell closed and urged the court to grand the motion.

12:35 Judge Gross. He found Mr. Fisler to be a credible witness (I tend to
agree). He found the terms to be “fair, reasonable, and adequate.” He granted
the motion and signed the order.

12:40 Adjourned



---
Eschew obfuscation assiduously.

[ Reply to This | # ]

Yarro Deal Approved
Authored by: JamesK on Friday, March 05 2010 @ 10:36 PM EST
When does Novell get paid for the money that SCO collected on their behalf? Can
this deal simple disregard that??? Wasn't that money supposed to be put in a
trust a couple of years ago? Any possibility of criminal charges???


---
IANALAIDPOOTV

(I am not a lawyer and I don't play one on TV)

[ Reply to This | # ]

Court aiding fraud???
Authored by: JamesK on Friday, March 05 2010 @ 11:04 PM EST
Given what we've read here about the Yarro "loan" and the previous
behaviour of Gross & Cahn, might those two be considered aiding Yarro etc.
in the commission of a fraud against the creditors & Novell?

How can anyone, particularly a bankruptcy judge, not see that the Yarro deal is
an attempt to defraud the creditors??? Isn't this, as I believe PJ pointed out,
a major shareholder looting the company???


---
IANALAIDPOOTV

(I am not a lawyer and I don't play one on TV)

[ Reply to This | # ]

  • Judge Gross - Authored by: Anonymous on Saturday, March 06 2010 @ 03:48 AM EST
What about conversion
Authored by: Anonymous on Saturday, March 06 2010 @ 12:32 AM EST
As I understand it SCOG was found guilt of conversion. How does that change
things? SCOG does not just owe money, but they clearly embezzled/converted funds
which belonged to Novell. Where does that put Novell? Is there any hope of them
reversing this?

For the record it's the worst deal in my opinion and the estate is going, going,
gone. Not sure how the creditors are served by leaving only a big bag of empty.

[ Reply to This | # ]

Can Novell appeal this ruling?
Authored by: kh on Saturday, March 06 2010 @ 12:32 AM EST
Maybe with an injunction?

[ Reply to This | # ]

When do Serge & Brin say enough
Authored by: Anonymous on Saturday, March 06 2010 @ 01:05 AM EST
Largest Linux users, deepest pockets, ability to spread the word most
extensively. If "the fix is in" they will be fixed. Better for them to
step up to the plate early, either entering in a litigious sense or spreading
the word that "the fix is in" so extensively that public opinion
forces the executive and SCOTUS to intervene. After all, ACTA is currently on
the line worldwide, use it!

[ Reply to This | # ]

Just some random thoughts
Authored by: Anonymous on Saturday, March 06 2010 @ 01:09 AM EST
When (not if) SCO is put into Chapter 7, and Mr Yarro says, I want everything.
Is it possible that Judge Gross (or a District Judge acting on appeal) can say:
"Not so fast"?

Additionally, there are a couple of possible outcomes in the Utah trial, but if
Novell loses, they will appeal. Then SCO will run out of money anyway. They
can't get more money from Mr Yarro because they are completely out of
collateral.

I think that if SCO loses in UTAH, they'll finally give it up.

[ Reply to This | # ]

  • clawback n/t - Authored by: Anonymous on Saturday, March 06 2010 @ 01:13 AM EST
"Believe it or not"? We predicted it
Authored by: Anonymous on Saturday, March 06 2010 @ 01:45 AM EST

PJ, we told you that Gross would rubber-stamp anything that SCO wanted. He's a disgrace to the Bench, to Delaware and to his country, but we already knew that.

Unfortunately, I believe that people like Gross are not uncommon in the US legal system.

[ Reply to This | # ]

It's a loan.
Authored by: Ian Al on Saturday, March 06 2010 @ 03:54 AM EST
I've been thinking. If Ed Cahn and Judge Gross were seriously sneaky guys could
the following be feasible?

Ed borrows as much of the $2M that SNCP are good for (I suspect not much). Ed
agrees with the judge that it's just not good enough to settle with the
creditors and decides to put SCOG into Chapter 7. They use Ralph's money to
continue the litigation and the interest payments up until Chapter 7 actually
happens thus fending any default until the assets are protected by Chapter 7.

Whatever the agreements around the loan, Ralph just joins the general list of
creditors for the value of the loan and loses the benefit of the other clauses.
SCOG does not quite get around to paying Ralph's arrangement fee. Ralph is also
a direct creditor as well as SNCP. The Ralph money is used in lieu of the $600k
trust fund to pay Novell and the rest is shared amongst the creditors.

Some copyrights may, or may not, go SCOG's way. Whatever they are, they are
worthless without the rest of SVrX to go with them. They are sold off to any
fool prepared to offer good maney for them only if they can be specified with
specificity, uniquely, in a way that the SVrX copyright holders have no standing
to sue (whoever the copyright holders might be!).

I know what you're thinking. Neither Ed nor Judge Gross would ever bend the
rules this much. But, what are they going to do to him if the judge really goes
for it?

---
Regards
Ian Al

PJ: 'Have you read my open letter?

[ Reply to This | # ]

Yarro Deal No Surprise
Authored by: sproggit on Saturday, March 06 2010 @ 07:07 AM EST
If you step back and think about it, this was inevitable. When SCO was operating
"Debtors-In-Possession", there must have been ways that they could
continue to trickle money into the company to keep it "just sufficiently
alive" to allow them to continue the smokescreen of Chapter 11 and to
pursue the litigation.

Just as the SCOsource was a smokescreen way to channel funds to this litigation
project, so this Yarro deal is more of the same.

We see no discussion of the ultimate source of Ralph Yarro's investment stake.
Obviously he will be able to show that it came from legitimate business dealings
that he has had - such as with Canopy Group - and not through any token
transactions [ you know the kind, where some large and powerful third party with
vested interests in this case offers to pay him 7-figure sums of money for
specialist consulting services ].

Nor should it be a surprise to us that it came through in this format. The
arrival of Judge Cahn as Trustee threw a small wrench in the works. Whereas
before the DIP could trickle monies into SCO and claim them to be
"sales" or "maintenance" or "support", it would
obviously be harder to do that with Judge Cahn reviewing the numbers each month.
So the simple solution is to play this motion.

I notice that noone has asked why Yarro waited until now for this public show of
generosity. Nothing to worry about there, either.


It seems to be getting much more difficult to see how this will play out. I
would agree with PJ and others who are starting to see that Judge Stewart seems
to be favouring SCO, but it's not yet clear that this is attributable to malice,
or if it's merely the Judge's sense of justice in wanting to allow a "tiny
company", "struggling on it's last legs" to receive a fair
hearing in a court of law.

Though I suspect a lot of us are concerned at some of the recent developments, I
think that IBM, if not Novell, have the inclination to appeal if things go awry.


But the most interesting development is the unsolicited bid for Novell. It's
going to be fascinating to see what is at the back of that!

[ Reply to This | # ]

Yarro Deal Approved
Authored by: Anonymous on Saturday, March 06 2010 @ 11:10 AM EST
All well and good, but Novell will smartly appeal.

[ Reply to This | # ]

IBM Waits to Drop Patent Bomb
Authored by: Anonymous on Saturday, March 06 2010 @ 11:22 AM EST
I am guessing that IBM will wait to see if Yarro carries on the IP fight, and
then IBM will drop a major load of Patent infringement claims on Yarrow, who
will now personally have to fund the legal fight....

[ Reply to This | # ]

Why Novell Might Want Yarro Deal Approved
Authored by: Barbie on Sunday, March 07 2010 @ 12:01 AM EST
I was just getting the dogs ready for the last walk of the night, and I might have figured it out ... or I might be completely wrong ...

Novell asked (vie Lewis) how much $$$ there would be left to satisfy unsecured creditors if SCO loses at trial. This is to make sure that SCO will not be a going concern after it loses.

Novell has already indicated that SCO is in breech of contract wrt the licensing way back with the Microsoft and Sun deals. Once the trial is finished, there's nothing to prevent Novell from simply pointing out that SCO remains in breech, and cannot sell software containing Novell's IP without a license, and Novell is not willing to negotiate a new license, and that SCO cannot "cure" the existing multiple and ongoing breeches - it doesn't have anywhere near the funds necessary even if Novell were willing to sit down and discuss it. Injunction against SCO North America from any further sales.

Yarro ends up spending $2 million for a couple of manuals and a losing ticket in the litigation lottery.

Novell moves against the European and Japanese offices of SCO with injunctions against any future sales and a demand for a list of all transactions for the last X years - and all the revenue, since it is now unlicensed.

SCO has no money to sue, no product to sell (Unixware is encumbered by Novells' IP), and no foreign operations. No potential buyers emerge. Chapter 7.

Novell informs Darl "you need to license our Unix IP" - $666 per unit sounds about right if you're dealing with that particular devil. Darl finds out he can't get indemnified by SCO for past and current breeches, his business files Chapter 7.

[ Reply to This | # ]

Biased Judge
Authored by: Anonymous on Sunday, March 07 2010 @ 10:39 AM EST
What can you do about a judge who is biased?

[ Reply to This | # ]

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