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SCO's Bankruptcy Hearing Monday Is Called Off |
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Friday, June 18 2010 @ 11:53 AM EDT
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SCO's bankruptcy hearing scheduled for Monday in Delaware has been cancelled. The next one will be on July 12 at 1:30, or so they say, so if you were planning to attend on Monday, please rearrange your plans. This is the third time in a row that SCO has cancelled a bankruptcy hearing. They cancelled in May, and they cancelled in April, and now again they cancel in June. Is there perchance something they'd rather not tell the judge? Something they don't want the creditors to bring up? You think? I have a question for him. Why isn't SCO in Chapter 7? What is the plan to pay off the Yarro loan so all the assets don't end up in the hands of the man who started this whole fiasco? I guess Judge Gross will just have to wait to find out SCO not only lost the jury trial, which he knows already, but also SCO's laughable effort to get the copyrights given to them as a present from the judge in Utah anyway. What to do? What to do now? How to stay protected in bankruptcy (so IBM can't eat them alive) while they try to figure out if they can appeal and if so, how. A hearing might be a tad awkward at the moment, I'm guessing.
Well, Ocean Park wants to get paid, and no one complained about
the sale of the mobile assets to Darl McBride for $100,000, $60,000 of which goes to Ocean Park, not to mention their regular bills, so there you are. Who needs hearings? A happy ending for them. Can you think of a single reason why the public should know what's going on with a public company like SCO? They aren't timely filing with the SEC either. Their most recent filing was an amended 8K about the Yarro loan in March. Was this their favorite paragraph, perchance? The Loan is secured by a lien on substantially all of the assets of the Company. Pursuant to applicable bankruptcy law and the Bankruptcy Court Order approving the Secured Credit Agreement, the Lenders’ lien is senior in priority to all other liens and claims and administrative expenses of the Company.
Can you imagine if the jury had awarded the copyrights to SCO? Can you figure out the plan? But they didn't win. So now what? What's the plan to pay off that loan? With what? Who knows? SCO's most recent monthly operating report is for March. So the SEC doesn't know they lost before Judge Stewart either. Shouldn't the public know that? I'd call that material info, how about you? I'd call that near total stealth, actually. Perfect. Hide in the closet. Public companies are allowed to do that, right?
Kidding. I suspect they are desperately trying to invent a new strategy. How to stretch this out further is the goal, I'd opine, and in a perfect SCO world, how to snatch victory from defeat in the end. Their lawyers are likely looking over every ruling from Judge Ted Stewart before or during or after the jury trial to see if there is anything they can appeal. Or maybe they are going over the Federal Rules of Civil Procedure looking for another route to the top of the mountain, like fraud or newly discovered evidence? Hahahaha. That'd be so like SCO. But I'm not sure it'd be wise to bring up the subject of fraud, now that I think of it. Here's the time frame: according to the applicable section of the Federal Rules of Appellate Procedure, they have 30 days from the final judgment to file a notice of appeal. June 10th is the date of Judge Stewart's order on their request for the copyrights or a new trial and on the items from the trial that the jury didn't decide. So I think that's the relevant date to begin counting. Meanwhile, no press release. Not a peep from the company that used to have a mouth as big as the sky.
Here's the text of the notice:
"PLEASE TAKE NOTICE that the omnibus hearing scheduled in the above-captioned
case for June 21, 2010 at 3:00 p.m. has been cancelled. The next omnibus hearing is currently
scheduled for July 12, 2010 at 1:30 p.m."
And here's the notice itself:
06/17/2010 - 1127 - Notice of Adjournment // Notice of Hearing Cancellation Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. Hearing scheduled for 6/21/2010 at 03:00 PM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. (Fatell, Bonnie) (Entered: 06/17/2010)
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Authored by: Anonymous on Friday, June 18 2010 @ 12:10 PM EDT |
At what point can creditors start complaining about the constant cancellations
and force a hearing?[ Reply to This | # ]
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Authored by: Anonymous on Friday, June 18 2010 @ 12:14 PM EDT |
Seriously, do they own the Delaware courthouse or something? Their ability to
control and direct the BK process is incredible.[ Reply to This | # ]
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Authored by: Anonymous on Friday, June 18 2010 @ 12:23 PM EDT |
This has become a big joke. Where is the justice for Linux, Novell and IBM? They
need there money just like everybody else. [ Reply to This | # ]
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Authored by: Anonymous on Friday, June 18 2010 @ 12:28 PM EDT |
They tried SCOx maybe they need to sell the assets to SCOy, in exchange for
stock in the new and improved SCO.
SCOy can then tell the world that they obtained the rights to sue the word for
billions, and rather than going after companies that have the money to fight, go
after the children and grandparents like the RIAA. A billion dollars is still a
billion even if it is several smaller payments. [ Reply to This | # ]
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- SCO's new plan - Authored by: PJ on Friday, June 18 2010 @ 12:57 PM EDT
- SCO's new plan - Authored by: Anonymous on Friday, June 18 2010 @ 01:06 PM EDT
- SCO's new plan - Authored by: Anonymous on Friday, June 18 2010 @ 06:34 PM EDT
- SCO's new plan - Authored by: Anonymous on Friday, June 18 2010 @ 02:19 PM EDT
- SCO's new plan - Authored by: Anonymous on Friday, June 18 2010 @ 02:37 PM EDT
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Authored by: ankylosaurus on Friday, June 18 2010 @ 12:41 PM EDT |
Please use 'mistake --> correct' in the title.
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The Dinosaur with a Club at the End of its Tail[ Reply to This | # ]
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Authored by: ankylosaurus on Friday, June 18 2010 @ 12:44 PM EDT |
Please make any URLs clickable.
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The Dinosaur with a Club at the End of its Tail[ Reply to This | # ]
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Authored by: ankylosaurus on Friday, June 18 2010 @ 12:48 PM EDT |
Since news picks change rather rapidly, it can be helpful to include a
(clickable) link to the original item.
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The Dinosaur with a Club at the End of its Tail[ Reply to This | # ]
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Authored by: Anonymous on Friday, June 18 2010 @ 12:49 PM EDT |
How long does SCO have to file an appeal to Stewart's decision? I ask because I
think it may set the timeline here. Cahn is going to have to make a definite
decision - to appeal, or not to appeal. If the answer is not, it looks to me
like it's Chapter 7 for sure. If the answer is to appeal, then somebody else is
going to have to force Gross to pull the plug on Cahn, or else Cahn is going to
let this farce limp on for another year or two.
But an optimistic reading might be that Novell, IBM, the US trustee, and Gross
are all waiting to give Cahn a chance to do the right thing.
MSS2[ Reply to This | # ]
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Authored by: mcinsand on Friday, June 18 2010 @ 12:59 PM EDT |
Although I think I know the answer, is there ever a point where judicial
negligence can be charged? While our system is still one of presumed innocence,
proceedings here have allowed SCOX to squander assets with no rational means for
paying creditors. Does the judge have some responsibility for letting this drag
on at a snail's pace?[ Reply to This | # ]
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Authored by: Anonymous on Friday, June 18 2010 @ 01:02 PM EDT |
Given history, maybe SCO will be requesting an Overlength Bankruptcy.... [ Reply to This | # ]
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Authored by: JamesK on Friday, June 18 2010 @ 01:06 PM EDT |
{
like fraud
}
This is something I've been wondering about for quite some time. Given all that
gone on, including conversion of funds, shouldn't there be some criminal charges
against the principals. For example, that Yarrow "loan" appears to be
a plain attempt to defraud the creditors.
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IANALAIDPOOTV
(I am not a lawyer and I don't play one on TV)[ Reply to This | # ]
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Authored by: Anonymous on Friday, June 18 2010 @ 01:15 PM EDT |
How many trials will the 10th Circuit grant SCO? Maybe no more in the Novell
case. If SCO somehow loses in the 10th Circuit, it will go to the Supreme Court,
which will deny certiorari after 6 to 8 months.
But SCO will also ask Gross to unstay IBM, and Gross will agree. Novell will
waive the right of SCO to sue IBM. SCO will appeal that, interlocutory, to the
10th Circuit, which will order a jury trial on the waiver. SCO will lose the
jury trial. IBM's counterclaims will then be tried. SCO will lose the jury trial
(no summary judgments). SCO will appeal that to the 10th Circuit. Who knows
then?
After that, SCO will ask Gross to unstay the Red Hat suit. He will agree.
Another jury trial, although the Red Hat suit will be in the 3rd Circuit, not
the 10th, so sanity may or may not prevail. After all, Cahn comes from the 3rd
Circuit. More appeals there. Supreme Court will deny certiorari.
The U.S. Bankruptcy Trustee's Office, while all this is going on, will have
their feet on their desks collecting their pay. They get paid the same whether
they work or not?
I figure there is at least three more years to go.
[ Reply to This | # ]
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Authored by: IMANAL_TOO on Friday, June 18 2010 @ 01:38 PM EDT |
According to Wikipedia an omnibus hearing: is
for pretrial:
An omnibus hearing is a pretrial hearing. It is
usually soon after a defendant's arraignment. The main purpose of the hearing is
to determine the admissibility of Evidence, including testimony and evidenced
seized at the time of arrest.
There is nothing even
remotely pretrial about this today. What is the purpose of an omnibus hearing at
this stage?
.--- ______
IMANAL
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Authored by: Anonymous on Friday, June 18 2010 @ 02:00 PM EDT |
"Yeah, I know I owe everybody gazillions of dollars but I'm going to give
my cash-on-hand to my buddies and treat myself to more goodies.
Oh, by the way judge, I'm canceling the hearing again. Live with it."[ Reply to This | # ]
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Authored by: tce on Friday, June 18 2010 @ 02:13 PM EDT |
What else must transpire before IBM could consider piercing a veil or too?
Does anyone else have standing and cause to go after SCOff(Lof)icers directly?[ Reply to This | # ]
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Authored by: Anonymous on Friday, June 18 2010 @ 02:33 PM EDT |
The SCO death bed has entered the dark and hidden phase. A Ryan Tibbits
>> M'OG communique the only emanation.
SCO will pay Novell its
escrowed dollars.
Blank Rome has several hundred thousand dollars of
unbilled time at risk It has filed no bills since December.
Judge Cahn will
not file a bill until resolution (cite El Cort).
Boies and Hatch may have
billed for the trial expenses, but we have no way of knowing until the
perennially missing MOR's are filed. Cahn may have jawboned Boies into eating
the expenses from the trial. Hatch seems to have cash needs, so he will likely
demand some recompense.
OPA is relatively current with its billings, and
accepted CNO's since the March MOR's mean that these charges are payable and
should be deducted from the bank balances. The CNO approved deduction for OPA
is ($412,495) in my accounting.
ex-Novell escrow, SCO controlled
$1,700,000 on March 30 per the last MOR. It gained from sales to the
Patent consortium and a regiggered deal to McBride, but cash neutral software
sales remains a hopeful and not often achieved target, and the March MOR shows
the large semi-annual insurance bill was not yet paid. Any gain on the asset
sales would be lost to periodic insurance billing due in April. Payment flows
based on approved CNO's to OPA would drop the Cash on hand to $1,300,000
exclusive of any payment to Hatch, Boies, et. al.
SCO has run up its
liability to its overseas affiliates (these now exceed $1,400,000)
especially England, Germany and India. OPA flew first class to Europe to tell
(some subset) of the affiliates that they were now contractors working on a
reduced commission structure. Linked-in scrape shows several England staff have
moved on to new unrelated jobs. Some of the European names continue to post on
Comp.Unix.Sco.Misc, so at least have a nominal commitment to the corpse. The
affiliate liability is an ordinary course obligation (??) so may have priority
in liquidation. Note that OPA and Blank Rome have billing records showing they
are trying to sort out the legal obligation to the affiliates.
Is Blank
Rome is working for free? I seriously doubt it. Some professionals have high
hourly and accept a substantial shrinkage from unpaid bad debts. Doesn't seem
likely in this case.
My hypothesis: Cahn and Blank Rome, before they took
the assignment, got a valuation that told them they could sell SCO (the genuine
business) for about 1.5x Revenue run. In the summer of 2009, revenue was
11M/year, today it is about 8M/yr. Cahn and BR believed their worst case was
liquidation and would produce about $15M, and all liabilities and all their
bills would be paid.
They likely held on to this belief through the
trial. Within their analysis, the Yarro loan was bankable because it was covered
by the overage in the hypothetical sales price vs. total liabilities.
IBM/Nazgul may have suckered Cahn by offering to settle for about 5-8M. Cahn
thought that the IBM offer was his backstop, and voted to go big on the trial
since he thought he could double the settlement through a sale, and still hold
the lottery ticket for the big payoff.
So is Cahn seeking a sale partner
based on some revenue-run multiple, is he frantically calling IBM trying to
resussitate the expired settlement offer, or is he hunkered down waiting for a
miracle?
Yarro's group cannot run the business. The Las Vegas guys (Rex
H. Lewis) are in court with the trustee of their bankrupt Ohio bank over land
deals gone south, and Rex Lewsis is likely to be taken to the cleaners. There is
no capital to subsidize the bleeding. The hedge fund guys may have just ante'd
so they could sell their stranded shares into the pre-trial price appreciation,
perhaps they also see the now-vanishing revenue run multiple, and think they
could market the thing better than OPA.
The only buyer that could extract
some cash flow from SCO is Novell, since the evergreen sales to Telecom's in
Japan are the only profitable segment of the business and at least half of that
money goes to Novell. Novell will continue to receive the royalties as long as
viable product is being marketed. Does Cahn have leverage on Novell--saying
through OPA, "We will kill the brand unless you buy it off us?" Does Novell
care? I doubt it, and expect they are looking forward to selling SUSE-based
Telecom switches in Japan.
Yarro roused himself in the winter and pushed a
couple of business changes. It seems they are focused big on the soda bottle
(which is a guaranteed money hole). The server farm business [Orbiteer.net,
Voonami, Sumavi] got new investment. Various IP traces to Orbiteer don't show
much sustainable business-- ad-farming and spam pages seem to dominate. News
reporting gave hints that Voonami is selling some sort of security service to
Facebook, porn filtering using the database would be an obvious guess. Yarro has
kept a core group of employees since being frog-marched out of the Canopy
building, Yarro's source of funds to keep this stable of loyal followers
sufficiently recompensed to pay for their children's ballet lessons is not
obvious.
Sumavi is most interesting, this is the brain child of a
Portland based ex-IBM (sales) engineer (Vallard Benincosa) who is writing
web-portal User Interface to configure server farms using the command line tool
from the xCat project ( xCat uses the Eclipse License). xCat is a IBM
subsidized project, Yarro sniping a sales engineer who want to patent his portal
and turn it into a commercial biz is an interesting complication.
Did
Yarro make a shrewd move with the Sumavi deal. ***Is his plan to sell the
portal interface back to IBM to cover a legal settlement side deal?*** This is
the Anderer Memo model where Anderer told SCO they needed a pipeline of products
to sell Microsoft to cover for the unsavory aspects that might arise from a
direct subsidy.
Yarro sold at least 2 other deals to Microsoft before
Brian Roberts (Corp Dev) left the Vole to rejoin the exiled Richard Emerson at
Evercore. This was the Volution co-investment (fall 2004) and a sale of a SQL
database drilldown tool (so obscure I forget the name) in spring 2004. The
dollar value of these deals (4M if I remember correctly) and their periodic
nature (6 month spacing) make me think the Anderer claim that Corp Dev at MSFT
would continue to channel money via product buys survived in cloaked form until
about 2005. Another indication that these "investments" were dual purpose is
their apparent evaporation following the dismissal of Roberts from Microsoft.
Timing strongly supports the suspicion that Yarro tried to clone the wildly
successful DR-DOS shakedown of Microsoft in the SCO v. IBM litigation. Now,
there is some suspicions that he trying to clone the MSFT sham-purchase
model
(as laid out by Anderer) to get a periodic income stream from IBM in exchange
for legal peace. [ Reply to This | # ]
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Authored by: Anonymous on Friday, June 18 2010 @ 02:56 PM EDT |
IANAL, so I don't know where to look for this answer: What provisions are there
for the other interested parties to force SCO to appear at scheduled hearings?
I know they can form a Creditors Committee, but that would required sufficient
effort for no benefit, given that SCO has substantial negative equity. So, I
guess my question really is:
Can an estate remain in Chapter 11 indefinitely? Judge Gross has silenced and
disregarded every voice expressing anything that doesn't support allowing this
debtor to squander the total assets of the estate, leaving nothing left to pay
creditors. Now that the Novell litigation has a final judgment, how can this BK
judge not be more aggressive about making SCO be more forthcoming? What makes
this case special?[ Reply to This | # ]
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Authored by: joef on Friday, June 18 2010 @ 05:08 PM EDT |
Would Novell have standing to sue to recover their revenue stream, the one
associated with the continuing licensing business? If so, in what court? Could
Cahn as trustee be the defendant? Is there any residual value to be recovered? I
can see that Novell would not wish to acquire the litigation business; there are
too many liabilities associated with that _____. (Use your own description.)[ Reply to This | # ]
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Authored by: _Arthur on Friday, June 18 2010 @ 06:38 PM EDT |
Blank Rome just submitted its bill for the work performed in December 2009.
Took them only 6 months to tote it up.
#1128
$140,847.00 + $7,019.45
They spent 12 minutes working on Al Petrofsky's phone call...[ Reply to This | # ]
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Authored by: Anonymous on Friday, June 18 2010 @ 09:05 PM EDT |
One big question on my mind is the priority of two key claims to SCO's
rapidly dwindling asset base: Yarro's super-priority loan vs Novell's converted
funds. Both are about $2 million. Yarro's loan has priority over other
claims to SCO's assets, but the converted funds are not SCO's assets.
They are Novell's. A move to Chapter 7 would reduce the waste of remaining
assets on lawyers and consultants, but who would get what little meat is left on
this skeleton? I think that in the event that SCO's pockets are too empty to pay
Novell, Novell should seek to pierce the corporate veil and go after past and
present executives and directors of SCO for the balance of the converted
monies. [ Reply to This | # ]
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Authored by: Ian Al on Saturday, June 19 2010 @ 04:04 AM EDT |
Ed Cahn isn't afraid of another hearing. It's just that there is not enough
money left for his bus fare to the court room.
---
Regards
Ian Al
SCOG, what ever happened to them? Whatever, it was less than they deserve.[ Reply to This | # ]
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Authored by: ghost on Saturday, June 19 2010 @ 04:59 AM EDT |
Well, I guess they are so broke that they can't even afford to attend the
bankruptcy court..[ Reply to This | # ]
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Authored by: Anonymous on Saturday, June 19 2010 @ 07:26 AM EDT |
Help me out people - wasn't there supposed to be a reorganisation plan being
produced? That was the big issue in the bankruptcy wasn't it? What happened to
the plan SCO was supposed to be coming up with?
There was even supposed to be a time limit for SCO to come up with such a plan
wasn't there? That is the deadline Judge Gross famously chose to ignore absent
the possibility that someone might take him out back of the courthouse and shoot
him.
So now that there is no deadline where does that leave us? Does that mean unless
a firing squad shows up at the courthouse to make the Judge do his job then the
case is just going to be allowed to drift?
There seems to be nothing at all happening bankruptcywise right now that I can
see - apart from lots of money being poured down a rathole. I didn't think
companies were allowed to hide in chapter 11 and waste all their assets in this
way. I thought they had to at least pretend to come up with a plan.[ Reply to This | # ]
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Authored by: Anonymous on Monday, June 21 2010 @ 05:11 AM EDT |
Now that Novell is the un-disputed owner of the valuable Unix copyrights, I'm
concerned about someone with a certain agenda going after that company.
SCO Assets? No longer of any concern. Only keep your eyes open for the
expected appeal![ Reply to This | # ]
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Authored by: GriffMG on Monday, June 21 2010 @ 12:41 PM EDT |
If SCO were in chapter 7 he wouldn't be able to bill it any more!
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Keep B-) ing[ Reply to This | # ]
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