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Oracle Objects to SCO's Cure Notice: What contracts? Who is SCO selling to?
Friday, October 22 2010 @ 10:51 PM EDT

Oracle now joins EMC in objecting to SCO's cure notice. It has no idea what contracts SCO is talking about, first of all:
2. Exhibit “A” to the Cure Notice identifies Oracle, BEA Systems, Inc. and Sun Microsystems as contract counter-parties with contracts to be assumed and assigned through the Sale Motion.

3. Based on the contract descriptions provided in the Cure Notice, Oracle is unable to identify the contracts described.

So that's two now who are in the dark about having any contract with SCO or if they do which contract is involved. Of course, Oracle asked SCO to tell them, and that's where it gets even more interesting. SCO sent them even more contracts not in the original cure notice, so now Oracle is really in the dark. Oracle asks for information about the successful bidder, when known, because it can't possibly evaluate if the new owner is able to fulfill its obligations under the agreements without that information, and until Oracle knows what contracts SCO is talking about, Oracle can't know if the cure amount is correct or not either. "Oracle remains uncertain as to the Debtors’ intent."

In the meantime, Oracle asks the court to deny any forward motion on SCO's request to assume and assign any Oracle executory agreement without Oracle's consent. It points out that federal law makes non-exclusive patent licenses non-assignable unless you have the consent of the licensor. This is patented software at issue, and Oracle reserves its rights to be heard before any license agreements are assumed and assigned.

Here is the filing, first:

10/22/2010 - 1189 - Objection to Notice of Cure Amounts in Connection with the Assumption and Assignment of Executory Contracts and Unexpired Leases and Reservation of Rights Regarding Adequate Assurance (related document(s) 1141 , 1161 , 1184 ) Filed by Oracle USA, Inc. (Attachments: # 1 Certificate of Service) (Huggett, James) (Entered: 10/22/2010)

10/22/2010 - 1190 - Certificate of No Objection Re: Eleventh Monthly Application for Compensation of Ocean Park Advisors, LLC (related document(s) 1176 ) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Fatell, Bonnie) (Entered: 10/22/2010)

Here's what happened when Oracle asked to see the alleged contracts:
4. Without additional information from the Trustee, Oracle is unable to determine either which contracts the Trustee seeks to assume and assign, or the appropriate cure amount owed under the targeted contracts.

5. In conjunction with a prior notice, Oracle requested, and received from the Debtors’ counsel, copies of certain contracts then identified for assumption and assignment.

6. The list of contracts in the recently received Cure Notice includes additional, newly identified contracts, which were not provided by Debtors to Oracle in response to the earlier request.

7. Since a number of the newly listed contracts were not previously provided, and are not recognizable as a result of their broadly worded descriptions in the Cure Notice, Oracle remains uncertain as to the Debtors’ intent.

8. There is also uncertainty regarding the purchaser’s identity, for no stalking horse bidder has emerged and the sale is subject to auction.1

9. Therefore at this time, Oracle cannot evaluate either the eventual purchaser, or whether the prerequisites of 11 U.S.C. § 365(b) have been met.

10. This uncertainty leaves Oracle unable to assess how its pecuniary and proprietary interests may be affected under the proposed sale.

11. Thus, Oracle reserves all rights to be heard on the matter once the successful bidder/potential assignee is known.

12. As described below, the Trustee may not assume and assign any Oracle agreements without Oracle’s consent, as such contracts involve the licensing of patented and/or copyrighted materials, and Oracle does not consent to their assumption and assignment at this time.

13. In order to ensure adequate assurance of future performance by the ultimate purchaser, Oracle requests that the Trustee, at a minimum, provide to Oracle the following information about the eventual successful bidder: (a) financial bona fides; (b) confirmation of status as a non-competitor of Oracle’s; and (c) confirmation of its willingness to execute an Oracle Assignment Agreement and any related documentation.

14. Without this information, Oracle is unable to determine the eventual buyer’s creditworthiness or suitability/ability to adequately perform, and Oracle reserves all rights to object to the purchaser until this information is known.

15. For these reasons, Oracle requests that the Court deny, at this time, the Trustee’s request for an order authorizing assumption and assignment of any Oracle executory agreement in the absence of Oracle’s consent....

21. Since the proposed sale here is subject to auction without even a stalking horse bidder, the identity of the ultimate purchaser/assignee necessarily remains unknown.

22. Therefore, at this time, Oracle cannot determine whether: (a) the ultimate purchaser/assignee is capable of providing adequate assurance of future performance; (b) the proposed assignee is a competitor of Oracle; and (c) the purchaser is willing to enter into a standard form of Oracle Assignment Agreement, and related documentation, reflecting the terms, post-assignment, of the parties’ relationship.

23. Until at least the information identified above is provided, Oracle is unable to determine whether the Trustee has complied, or will comply, with the protections of section 365(b)(1)(A),(B) and (C).

28. Absent payment of the appropriate amounts to Oracle, the Oracle agreements may not be assumed, assumed and assigned or otherwise transferred.

29. Oracle therefore reserves its right to object to the cure until more certainty on the contract or contracts at issue is provided.

_____

1 Pursuant to the Cure Notice, counterparties to leases or contracts have until November 1, 2010 to file an objection based on adequate assurance concerns. The auction is scheduled to be conducted on October 25, 2010. Given the short turn around time, Oracle’s Objection is both as to cure, and to preserve its right to be heard on the issue of adequate assurance of future performance once the successful bidder is known.

Go, Oracle. And if you think Oracle is just filing forms, think again. Its seriousness may be measured by the fact that it has three outside law firms assigned to this case, along with its own in-house attorneys. Two of them.

I love the part about Oracle being unable to determine SCO's intent. I think maybe there's a life lesson here. The trouble with paying your lawyers millions to avoid paying a more or less equivalent sum to your creditors is, it causes questions to arise in the minds of the creditors as to your true intentions.

: D

Of course, we must factor in that lawyers are very polite in court documents as a rule, even the killer litigators. Actually, especially them. They are aware they don't need to raise their voices. And sometimes, when a lawyer says he can't figure out something, it means he can, he doesn't like it, and he has an intent to block.

And if there is one thing the world knows about Oracle, it's that it cares about its money. If anyone in the universe ever wanted to flim flam anybody, not saying that they are, but just if anyone had such a thought in mind ever, Oracle is not reasonably on anyone's list of potential marks. SCO should have learned that from the last time it danced around the legal dance floor with Oracle, and that time, when only a subpoena was at stake, Oracle used only two in-house lawyers, and SCO still lost. Plus, the quality of mercy may not be strained in heaven, but no one should rely, methinks, on it being enthralled in Oracle's heart. It is happy to eat you for breakfast, then wipe its mouth on its sleeve and go play tennis. Seriously, SCO'd best think matters through carefully.


  


Oracle Objects to SCO's Cure Notice: What contracts? Who is SCO selling to? | 272 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Your move, SCO
Authored by: benw on Friday, October 22 2010 @ 11:13 PM EDT
And what moves do they have? Obviously, their first instinct would be to call
off the sale and move to postpone the November 8 meeting, but surely that can't
happen at this point. If they fail to sell whatever they represent to be the
core of their business, then there must be no hope whatever of defeating a
motion to convert to Chapter 7. So, what are their options? Of course I'm not
even entertaining the idea of them actually answering Oracle's questions and
requests for clarification, that would be absurd.

[ Reply to This | # ]

legal thesis vs. moral thesis
Authored by: Anonymous on Friday, October 22 2010 @ 11:16 PM EDT
The legal thesis is summed up in the last sentence of the second paragraph:
"Oracle remains uncertain as to the Debtors’ intent." The remainder of
the legal points follow from that.

But the moral thesis is so well summarized in the final paragraph. Who hasn't
known of a two-bit bully, a legend in his own mind, who was put into his place
by someone much bigger and more cunning, and willing to resort to questionable
means to achieve his own ends?

Is the enemy of my enemy, my friend? Maybe not. But that doesn't mean my enemy's
enemy can't be useful to my own purposes.

[ Reply to This | # ]

Oracle Objects to SCO's Cure Notice: What contracts? Who is SCO selling to?
Authored by: dio gratia on Friday, October 22 2010 @ 11:53 PM EDT
I'm sort of expecting Novell to stick it's oar in, too.

[ Reply to This | # ]

Corrections Thread
Authored by: bugstomper on Saturday, October 23 2010 @ 12:20 AM EDT
Corrections here, summary in the title box, e.g., error->correction or
s/error/correction

[ Reply to This | # ]

Off Topic threads
Authored by: bugstomper on Saturday, October 23 2010 @ 12:21 AM EDT
Please stay off topic here.

Use HTML Formatted mode to make clickable links.

[ Reply to This | # ]

News Picks Thread
Authored by: bugstomper on Saturday, October 23 2010 @ 12:24 AM EDT
Please remember to change the Title box to say which News Pick article you are
commenting on and include a clickable HTML mode link to the article in your
comment for the convenience of the reader after the article scrolls off the
sidebar.

[ Reply to This | # ]

COMES goes here
Authored by: bugstomper on Saturday, October 23 2010 @ 12:26 AM EDT
Is there more to Come? Post your transcriptions here with HTML markup posted as
Plain Old Text to make it easy for PJ to copy and paste.

[ Reply to This | # ]

This is superb!
Authored by: tiger99 on Saturday, October 23 2010 @ 05:40 AM EDT
SCO are not getting their own way, and with the sale supposedly happening on Monday there would seem to be no time to resolve this first. So they are, finally, going to have to make an appearance in Judge Gross' court fairly soon.

That gives us a chance to find out what is really going on, after a lapse of many months with no court appearances, provided some of our intrepid reporters are able to attend. So, as far as Groklaw is concerned, this has to be very good news indeed.

Oh, and if Oracle's actions cause a severe delay to the sale, presumably there will be no alternative to Chapter 7, because the money must be fast running out? And, it has probably ruined Cahn's weekend....

[ Reply to This | # ]

ederal law makes non-exclusive patent...
Authored by: Anonymous on Saturday, October 23 2010 @ 08:48 AM EDT
Federal law makes non-exclusive patent licenses non-assignable absent consent of the licensor.

If that's true, surely it wouldn't matter whether or not an objection was filed.

[ Reply to This | # ]

Oracle doesn't bother cleaning up
Authored by: tinkerghost on Saturday, October 23 2010 @ 07:24 PM EDT
<blockquote>It is happy to eat you for breakfast, then wipe its mouth on
its sleeve and go play tennis.</blockquote>
<p>Actually, I believe they prefer to leave the fresh blood dripping when
going off to play tennis - it makes their next opponent nervous.

---
You patented WHAT?!?!?!

[ Reply to This | # ]

What's Going On?
Authored by: webster on Sunday, October 24 2010 @ 01:10 AM EDT

Bankruptcy is hard to fathom. Some comments are drafted in an attempt to figure it out. Oracle is trying to figure it out, too. It won't be easy.

Has SCO taken the name of Oracle in vain? If Oracle is unaware of what contracts in the Cure, can there really be any? Was SCO using Oracle and others to create some semblance of substance for an auction? Were they padding to justify a hefty sum from a collusive bidder?

Who is feeding Cahn this stuff? How can he be believing it at this point? Can you imagine him saying to Oracle, "Sorry. Never mind."

Why is Oracle so eager to jump into this? This seems like something that could be clarified with a few phone calls. It hard to believe that SCO could show them some lasting, one-sided contracts that they were never aware of. If there were any, they could cancel them for all that SCO can do now. Let us hope more comments shed some light here. ...

This is goofy. Oracle has Sun's Unix license from SCO; they have a Caldera-SCO Linux license; they appear to have less to fear from SCO than anyone. It may depend on what the small print says in some confidential agreements. PJ has noted that Oracle has amassed a trainload of legal firepower to aim at this bankrupt enterprise. Gross ought to take note. Oracle can appeal his decision to the District Court and beyond. Others could have all along, but Oracle is in it for a reason. The "list of included assets" for auction is the least of it. Are they just elbowing for position with Novell and IBM? Do they plan to bid and want to keep the price down? Do they want control of all of SCO without paying for it? Does SCO's contract legerdemain stink of malicious falsity [to put it delicately] which Oracle sees as a way to get at SCO backers? Can Oracle document damage they have suffered by SCO's bluffs and non-disclosure of nothing?

What about the auction? Cahn has been responding to the little whispers from the old SCOfolk. He sold to McBride; got a loan from Yarro. He certainly expects no surprises from this auction. Someone desperately wants to keep the SCO lottery ticket alive. It is their only value. They have locked-in lawyers for the appeal and beyond, if ...

It's late. Here's hoping for some luminous updates.

~webster~

[ Reply to This | # ]

Oracle Objects to SCO's Cure Notice: What contracts? Who is SCO selling to?
Authored by: sonicfrog on Sunday, October 24 2010 @ 11:26 AM EDT
Hey, this is no surprise. It fits the pattern. SCO says
Oracle has a contract with them, and, as is SCO's way, they
want Oracle to produce it. If they can't (or won't, according
to SCO) then they are obviously hiding it and are guilty
of... something!

[ Reply to This | # ]

confirmation of status as a non-competitor of Oracle’s
Authored by: Anonymous on Sunday, October 24 2010 @ 12:04 PM EDT
The phrase "confirmation of status as a non-competitor of Oracle’s"
jumped off the screen when I read the article. What rights does Oracle have to
block a sale if the winning bidder is a competitor?

In my inustry, the big three database makers are Oracle, Microsoft and IBM.
Hmmm.

So, can Oracle block a direct sale to, say, Microsoft? How about a subsidiary
of IBM? Or a company being funded by Microsoft? How much of the funding chain
will the trustee be forced to expose?

(Oracle owns Sun, so any operating system vendor or hardware manufacturer is a
competitor. They have a custom software consulting group, so every mom &
pop software company can also be considered a competitor.)

[ Reply to This | # ]

Smoke Screen
Authored by: Anonymous on Sunday, October 24 2010 @ 11:18 PM EDT
What else is going on that no one should see?? Is this a smoke screen? S Q U I
R R E L !

[ Reply to This | # ]

It's not the old SCO doing this, it's Cahn
Authored by: Anonymous on Monday, October 25 2010 @ 01:45 AM EDT

In the past, when SCO tried to pull nonsense like this in court, we knew who was behind it: the old SCO management team, Darl et al.

But Darl has long gone and the remaining members of the SCO management team are no longer in charge. Cahn, the Trustee, is directly responsible for this nonsense.

Is there some virus in the water supply at the SCO offices, that infects everyone who goes there? or what?

[ Reply to This | # ]

SCO strategy
Authored by: Anonymous on Monday, October 25 2010 @ 04:15 AM EDT

Isn't it obvious? They're running out of reasons to call delays themselves, so by mentioning contracts that other companies aren't sure what they are they're making the other guys call a delay... giving them time to come up with a reason to call another delay.

Exactly how all these delays help them is a more difficult question to answer. It has been suggested that they just don't want to let Novell get any money, but I think there's more to it than that, at this stage.

Though it's hard to imagine exactly what.

[ Reply to This | # ]

  • SCO strategy - Authored by: PJ on Monday, October 25 2010 @ 12:58 PM EDT
  • Bingo! - Authored by: Anonymous on Monday, October 25 2010 @ 02:41 PM EDT
Time to sue Oracle?
Authored by: Anonymous on Monday, October 25 2010 @ 09:06 AM EDT
Clearly claiming that you don't have a contract with SCO is slander of some
sort.

[ Reply to This | # ]

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