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SCO Files MORs for March
Friday, May 07 2010 @ 03:07 PM EDT

SCO has filed its monthly operating reports for March. This is the month they did the deal with Ralph Yarro, so we find out what they did first with that loan money. Pay themselves, of course, and their lawyers. And one of their experts.

Here they are:

05/04/2010 - 1118 - Debtor-In-Possession Monthly Operating Report for Filing Period as of March 31, 2010 (The SCO Group, Inc.; 07-11337) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Attachments: # 1 Certificate of Service) (Fatell, Bonnie) (Entered: 05/04/2010)

05/04/2010 - 1119 - Debtor-In-Possession Monthly Operating Report for Filing Period as of March 31, 2010 (SCO Operations, Inc.; 07-11338) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Attachments: # 1 Certificate of Service) (Fatell, Bonnie) (Entered: 05/04/2010)

The second document, on page 13, shows the payments in March:
  • Blank Rome, Cahn's firm, got paid ($335,296)

  • Mesirow (a mere $362)

  • Ocean Park ($261,645)

  • Pachulski Stang ($45,029)

  • Dorsey & Whitney ($10,191)

  • Tanner ($3,301 and $548)

  • Goodwin Proctor ($2,428)

  • Cursed Network ($1,725)

  • G. Gervaise Davis ($5,000)

  • Novell and the other creditors (not one red cent, as usual)

I rest my case. There is an imbalance in the bankruptcy universe, in terms of what us non-bankruptcy experts see as fair.

Davis is the SCO expert whose testimony was so whittled down by pretrial motions, he never actually testified, IIRC. Here's Novell's memorandum of law [PDF] outlining the issues it had with his proposed testimony. But he was available and prepared his declaration and his report, so he gets paid by SCO, despite being on the losing team, while Novell, who won at the jury trial, gets absolutely nothing. That's the part that seems so skewed to those of us not used to bankruptcy courts.


  


SCO Files MORs for March | 365 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here
Authored by: DaveJakeman on Friday, May 07 2010 @ 03:19 PM EDT

[ Reply to This | # ]

Off Topic
Authored by: DaveJakeman on Friday, May 07 2010 @ 03:21 PM EDT
For the usual top-quality side colour.

[ Reply to This | # ]

News Picks
Authored by: DaveJakeman on Friday, May 07 2010 @ 03:22 PM EDT
Please title appropriately.

[ Reply to This | # ]

Comes Goes Here
Authored by: DaveJakeman on Friday, May 07 2010 @ 03:23 PM EDT

[ Reply to This | # ]

This is how it always goes
Authored by: Anonymous on Friday, May 07 2010 @ 03:30 PM EDT
As I said when Cahn first took over, and people started suggesting he may bring
a case against the SCO management and right all wrongs .. thats just SO not
going to happen.

As always happens, they simply siphon off all the cash, with ludicrous fees,
until the place is scraped dry. Been there, got the T Shirt.

They will just keep going, racking up charges and running it along until there
is nothing left. If they had just closed the doors and rolled over dead, there
would have been something .. but, if you a are a "bankruptcy
professional" you don;t get rich that way.

They will just keep rolling along, until there is NOTHING left.

[ Reply to This | # ]

A Short Summary
Authored by: DaveJakeman on Friday, May 07 2010 @ 03:35 PM EDT
The code was clean as clean could be,
   Accounts were dry as dry.
You could not see a cloud, because
   Attorneys filled the sky:
No valid claims were overheard --
   There were no claims to fly.

From: The Darlus and the Counselor

[ Reply to This | # ]

  • A Short Summary - Authored by: Anonymous on Friday, May 07 2010 @ 09:32 PM EDT
SCO Files MORs for March
Authored by: rsteinmetz70112 on Friday, May 07 2010 @ 03:38 PM EDT
At least this one is timely.

---
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 | # ]

End of March without 'secure loan'
Authored by: Anonymous on Friday, May 07 2010 @ 04:23 PM EDT

Would have been it without the loan. Numbers taken from s PDF SCO OPS MOR.

    (1) Cash at end month: $2,458,179
    (2) PROCEEDS FROM SECURED DEBTOR LOAN: $1,950,000
    No loan-Cash at end of month (1)-(2): $508,179
    Burn rate (TOTAL DISBURSEMENTS): $1,372,569
    In the red: $864,389

They wouldn't have made it through the trial.

The loan gave SCO enough cash to survive 1 month and three weeks. That's April and onto the 17th of May. Of course they're selling websites and abandoning buildings, so maybe they can survive until June.

When they go belly up, that last secured loan; does the lender (Yarro et. al.) get first rights to pick over the bones, in Chapter 7? If so, Yarro will just buy up the litigation and keep the party rolling.

[ Reply to This | # ]

SCO Files MORs for March
Authored by: kozmcrae on Friday, May 07 2010 @ 04:55 PM EDT
Novell should petition the bankruptcy court to assign them as consultants to
SCO. That way they could at least "earn" some of their money back.
It's a totally absurd idea but it would fit right in with the carnival SCO has
created out of every courtroom they enter.


---
It all started with Lynda Carter playing Wonder Woman in the '70s. Now I'm a
Heroine addict.

[ Reply to This | # ]

SCO Files MORs for March
Authored by: Anonymous on Friday, May 07 2010 @ 05:13 PM EDT
So how many people are left?
Net Payroll = $131,462 + $67,342(taxes) = $198,804/mo = $2.4M/year.
Assuming $100K per employee that gives about 24.
Are the taxes the company side, the employee side or both?
If the company side then there would only be about 16.

Is $100K per employee a fair guess? (some make quite a bit more, some a bit
less)

[ Reply to This | # ]

Two comments
Authored by: sysprog on Friday, May 07 2010 @ 07:14 PM EDT
1. Their Gross Accounts Receivable shows almost 20 percent as being over 90
days. Their allowance for doubtful accounts (at over 50 percent of that amount)
does not unfairly reflect that even they think they'll never collect. I wonder
if we'll ever know who they sold to that won't/can't pay.
2. The change in the Net Owners' Equity since the Bankruptcy Filing date shows
that they lost 14.5 million dollars. Since there's no reported change to
Goodwill, and depreciation was (relatively) negligible, this suggests that had
they just gone Chapter 7 on the filing date, the large majority of that 14.5
million could've been recovered, back then.

[ Reply to This | # ]

Google Doc Spreadsheet of MOR's
Authored by: Anonymous on Friday, May 07 2010 @ 07:29 PM EDT
Bank Accounts

Cash Disbursements

Please note the remaining Yarro et. al. funding has been stored in the "Sweep" account,($721,000)and a newly created "DIP" account ($723,000). To me this indicates that SCO anticipates consuming the money in the Sweep account in the near term (April bills for trial, and continuing payments to Blank Rome and OPA). Historically, the Sweep account has been a volatile supply of funds for payment, resupplied from other accounts (which are now exhausted).

In this interpretation, The DIP account will be held for May and later bills, and represents the sole remaining "runway" for the organization.

[ Reply to This | # ]

So the big winner is ...
Authored by: Anonymous on Friday, May 07 2010 @ 11:00 PM EDT

...the bankruptcy trustee's company.

I originally thought the point of installing a bankruptcy trustee was to put the bankrupt entity in the hands of an independent party who would impartially take into account the interests of all stakeholders, including creditors, employees, etc.

Silly me.

[ Reply to This | # ]

It smells like... fish
Authored by: Anonymous on Saturday, May 08 2010 @ 02:17 AM EDT
So, half their expenses goes to... Cahn's buddies.
I'm sure they're eager for this circus to leave town. Not.

[ Reply to This | # ]

Is SCO Solvent?
Authored by: sproggit on Saturday, May 08 2010 @ 06:46 AM EDT
Take a look at that pdf attachment...

Now, in the Receipts section you will see that SCO earned $639,391 from Accounts
Receivable. They didn't make any sales in the first quarter of the year, so
presumably this income is maintenance revenue.

Now look at disbursements. If you disregard the $278,000 paid to subsidiaries
(which, if they had to, they could close and/or sell); and if you disregard the
$681,548 of professional fees (since these were exceptional costs associated
with the trial - an event which SCO elected to continue with when they did not
have to...) then SCO's total disbursements for the same period amounts to
$412,202.

So by my simple and usually incorrect math, disregarding "exceptional"
expenditure, SCO made a monthly profit of close to $230,000.

OK, so that's not beellions, but it's profitable operations. In which case, if
SCO were to continue like this for a year - flat revenue - they would generate
$2.76 Million Dollars. How long have SCO been in bankruptcy? Let's be generous
and say 2 years - it's more than that, I know. But that's more than $5 Million,
right there.

Surely, SCO could have paid off most if not all of their creditors with $5
Million?

Am I misunderstanding something here?

Or is Judge Kevin Gross, through negligence, allowing a farce to continue,
depriving creditors of their rightful dues, and discrediting the US legal system
all at the same time? I'm not trying to be sarcastic - these are serious
questions. If I've calculated correctly, then what is this company still doing
in Chapter 11?

[ Reply to This | # ]

Aparently SCO isn't the only one that can game the bankrupcy court
Authored by: tedavids on Saturday, May 08 2010 @ 11:30 AM EDT

Appaently others know how to game the system also, even if they have an active trustee. This is a group of gas stations in Milwuakee, WI that the owner is apparently going to be able to buy back, even when creditors and the trustee object.

Sale of gas stations approved

[ Reply to This | # ]

Corruption
Authored by: ak on Saturday, May 08 2010 @ 03:51 PM EDT
Someone who transfers $335,296 from a small bankrupt company to a company he
works for should be looked at with extreme suspicion. And if that money was
borrowed from someone else or belonged to someone else ...

I personally did not trust Edward N. Cahn from day one.

[ Reply to This | # ]

  • Corruption - Authored by: stegu on Sunday, May 09 2010 @ 06:25 AM EDT
    • Corruption - Authored by: PJ on Sunday, May 09 2010 @ 12:14 PM EDT
      • Corruption - Authored by: amster69 on Sunday, May 09 2010 @ 05:20 PM EDT
        • Corruption - Authored by: Anonymous on Sunday, May 09 2010 @ 10:30 PM EDT
          • Standing - Authored by: ak on Monday, May 10 2010 @ 01:07 AM EDT
            • Standing - Authored by: PJ on Monday, May 10 2010 @ 01:44 AM EDT
      • Corruption - Authored by: Anonymous on Monday, May 10 2010 @ 09:22 AM EDT
        • Corruption - Authored by: Anonymous on Tuesday, May 11 2010 @ 07:21 PM EDT
          • Corruption - Authored by: Anonymous on Tuesday, May 11 2010 @ 07:26 PM EDT
SCO Files MORs for March
Authored by: Sunny Penguin on Sunday, May 09 2010 @ 05:15 PM EDT
The solvency of SCOG is dependent on the conversion of Novells funds.

---
EOD is a science of vague assumptions based on debatable data taken from
inconclusive experiments with instruments of problematic accuracy by persons of
questio

[ Reply to This | # ]

So where is the massive income from Autozone hidden?
Authored by: amster69 on Sunday, May 09 2010 @ 05:29 PM EDT
It seems to have disappeared, just like the famous breifcase.

Bob

[ Reply to This | # ]

Bleak House 2010
Authored by: Anonymous on Monday, May 10 2010 @ 09:22 AM EDT
Dickens all over again

[ Reply to This | # ]

Bankruptcy 2010
Authored by: Anonymous on Monday, May 10 2010 @ 07:10 PM EDT
Creditors?

Pah!

Call the lawyers... and start SPENDING!

[ Reply to This | # ]

SCO is allowed to defend
Authored by: Anonymous on Tuesday, May 11 2010 @ 07:57 AM EDT
> There is an imbalance in the bankruptcy universe, in
> terms of what us non-bankruptcy experts see as fair.

No. It's not about fairness. It is about law and the ability to defend yourself.
Even if it lack any moral issue.
To deny SCO to defend themself would not be fair. Even if their thinking and
argumentation is weird. Neither you, nor the judge is their legal guardian. It
is not forbidden to be weird. And they have to pay for their plea.

Sorry, but there is nothing to complain about.

[ Reply to This | # ]

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