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Tanner would like to be paid by SCO for a "July" ERISA audit
Tuesday, September 14 2010 @ 11:04 PM EDT

Tanner LC has filed an interim bill for July in the SCO bankruptcy. Every entry is listed as "ERISA Audit". The total bill is $6,000, plus $226 in expenses. The header on Exhibit A says this:
Summary of Tanner LC fees from 7/1/2010 through 7/31/2010, by professional and service
So it purports to be for July of this year. But the dates in the itemized list run from March 3, 2010 through July of 2010. I can't explain it, since it seems contradictory. The expenses also are not just for July, beginning with a $5 phone call by "Hansen" dated 06/22/2010. I'm pretty sure that isn't July, unless SCO is still floating around in its own little world.

When you look at page 9, you see Tanner reciting to the court that on September 8, 2010, it was authorized by order [PDF] of the court to audit the Debtors' 401(k) plan for the year ended December 31, 2009, nunc pro tunc to March 31, 2010, the date of the Letter of Engagement [PDF], nunc pro tunc meaning going back to that date. At first one might think that maybe Tanner included all the bills, then, from March 31 onward and just called it a July bill. But the bill includes that entry for March 4th, prior to the engagement date, so that can't be it. Weird.

Here are the filings:

09/14/2010 - 1170 - Monthly Application for Compensation of (Twenty-Third) Tanner LC for the period July 1, 2010 to July 31, 2010 Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. Objections due by 10/4/2010. (Attachments: # 1 Notice # 2 Exhibit A # 3 Verification # 4 Certificate of Service) (Fatell, Bonnie) (Entered: 09/14/2010)

See what I mean:

Maybe they forgot to tell the paralegal that Exhibit A was supposed to be just for July? Or conversely, it's that header that is wrong? Or they forget to tell her that it was supposed to be for March 31 onward through July? Or maybe I don't know enough about the deep workings of bankruptcy court? Or maybe this explains why SCO has trouble sometimes meeting deadlines if Christmas or any other holiday pops up just prior to the filing deadline because they just can't count? Or they goofed, or I am? Or maybe they just want the money and no one cares how bad it looks because no one thinks anyone will care? Like I say, I can't explain it, so your guess is as good as mine.

That order said Tanner would be compensated a fixed fee of $12,500, plus expenses. On page 12, Tanner says it has done a lot of the work already, and it wants $6,000, or more precisely 80% of it. SCO has already paid Tanner, via the 401(k) plan, $5,821 of the fixed fee. The 401(k) plan paid them? Did somebody authorize that? I must have missed it. Here's Tanner's wording:

Tanner has completed a significant portion of the procedures related to the 401(k) audit for the year ended December 31, 2009. Accordingly Tanner requests approval to be paid $6,000 of the fixed fee of $12,500 in connection therewith. The 401(k) Plan has already paid Tanner $5,821 of the fixed fee. In this regard, the Applicant has conducted communications with the Debtor's Chief Financial Officer, Controller, and other employees in the Debtor's accounting department for the performance of the 401(k) audit procedures.
Man, bankruptcy court is dark and deep. And there is no way to keep your eye on the pea if you are just the public. That must be what companies like about it.

The order says this about payment:

Ordered that Tanner shall be compensated in accordance with the procedures set forth in the Motion, the Bankruptcy Code sections 328, 330 and 331 and such Bankruptcy Rules and Local Bankruptcy Rules as may then be applicable, from time to time, and such procedures as may be fixed by order of this Court.
Whatever the judge wants to order, I gather, is fine. But did he say SCO could pay by means of the 401(k) plan? If so, I totally missed it, which is certainly a possibility. If anyone finds that detail, please sing out. Here's Bankruptcy Code 328, Limitation on compensation of professional persons; 329, Debtorís transactions with attorneys; and 331 Interim Compensation.

Update: An anonymous reader finds our answer, and it only took him or her 17 minutes. Here's the SCO motion [PDF] asking to have Tanner do the audit, and if you look at page 4, paragraph 13, it does state that the 401(k) plan expressly "provides that the expenses of administering such plan and the compensation of all employees, agents, or counsel of such plan's administrator, including all accounting fees, shall be paid by such plan or by the Debtors if the Debtors elect to do so." So it was public, not specifically recited in the order in those words, but definitely covered by the wording that "Tanner shall be compensated in accordance with the procedures set forth in the Motion".


  


Tanner would like to be paid by SCO for a "July" ERISA audit | 59 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Thread
Authored by: Gringo on Tuesday, September 14 2010 @ 11:17 PM EDT
Place corrections here.

[ Reply to This | # ]

[NP] News Picks comments
Authored by: Gringo on Tuesday, September 14 2010 @ 11:18 PM EDT
Comment on Groklaw News Picks here.

[ Reply to This | # ]

[OT] Off Topic comments
Authored by: Gringo on Tuesday, September 14 2010 @ 11:19 PM EDT
Make any off topic comments here.

[ Reply to This | # ]

Singing Out
Authored by: Anonymous on Tuesday, September 14 2010 @ 11:21 PM EDT
The original motion for the ERISA audit indicates that the 401k plan will pay
part of the audit fee. See item 13 on page 4 of the PDF file.

13. The Debtorsí
401(k) plan expressly provides that the expenses of administering such plan and
the compensation of all employees, agents, or counsel of such planís
administrator, including accounting fees, shall be paid by such plan or by the
Debtors if the Debtors elect to do so. (Debtors 401(k) Plan, Section 9.1). It is
contemplated that upon entry of this Courtís order approving the expanded
retention of Tanner, approximately $5,000 of Tannerís fees shall be paid
from Debtorsí 401(k) Plan pursuant to Section 9.1 thereof. Any remaining amount
will be paid out of the Debtors estatesí subject to paragraph 21 below.

Here's
the filing:
http://www.groklaw.net/pdf2/SCOGBK-1149.pdf

[ Reply to This | # ]

All together now, children: What are they going to do?
Authored by: Anonymous on Wednesday, September 15 2010 @ 05:00 AM EDT
Take them out back and shoot them?

Man, the more I see of bankruptcy court, the funnier that gets. I guess bankruptcy court is where you get sent when you can't make the grade in traffic court.

[ Reply to This | # ]

Judge Cahn just made may day
Authored by: ailuromancy on Wednesday, September 15 2010 @ 06:48 AM EDT

Have I misunderstood this? Is Cahn really spending the pension funds of SCO executives? I have had my doubts about Cahn in the past, but here he has shown he is definitely the Judge for the job. What is more, he has a written promise from Darl that says Darl cannot sue.

[ Reply to This | # ]

401 K Erisa Audit
Authored by: The Mad Hatter r on Wednesday, September 15 2010 @ 08:27 AM EDT

I'm not familiar with American law, but I know that there are audit requirements
in Canadian retirement plans. As it was explained to me, the aim is to protect
the employees.

So this bill is one of the better ones, at least from an employee protection
point of view. Of course a better one would have been not to hire Darl in the
first place...


---
Wayne

http://madhatter.ca/

[ Reply to This | # ]

Does this act give ex employees the right to plead for chapter 7??
Authored by: Anonymous on Wednesday, September 15 2010 @ 11:11 PM EDT
Now that their the 401K's are possibly at the start of being plundered, does it
give ex-SCO employees an incentive to ask the bankruptcy court to convert to
chapter 7?

[ Reply to This | # ]

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