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SCO's MORs for November. Hahahaha.
Saturday, February 12 2011 @ 01:58 PM EST

SCO's monthly operating reports for November are filed, and they fairly scream, "I've fallen and I can't get up." And nobody cares.

Here they are:

02/11/2011 - 1231 - Debtor-In-Possession Monthly Operating Report for Filing Period As of 11/30/10 (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: 02/11/2011)

02/11/2011 - 1232 - Debtor-In-Possession Monthly Operating Report for Filing Period As of 11/30/10 (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: 02/11/2011)

And here's October, if you'd like to graph the trajectory. And here's October 2007 MORs, right after SCO first filed for bankruptcy protection. How well would you say they've been protected? How about their creditors?

Hahahahaha. I jest. This is not about anything they are talking out loud about. It can't be. If it were, the MORs wouldn't look like this, I don't believe.

"If I am able to determine the enemy's dispositions while at the same time I conceal my own, then I can concentrate and he must divide." - Sun Tzu
So there are missing pieces, making it difficult to figure out what is really going on. We have to try to think of all the things that might be done, even though you and I wouldn't try them in a million years for all the gold on earth. That's hard. And all they have to do is keep quietly moving their pawns forward. But if SCO were a person, would he be allowed to do this? What do you think? SCO's professional fees since it entered bankruptcy are $5,768,232 plus $469,501 in expenses. Guess how much cash in hand SCO Operations had in October of 2007? $6,438,789. Guess what it had at the end of November, keeping in mind that we are now in February to boot? $948,320. Amazing. Not a single creditor paid off.

By the way, keep in mind that SCO is holding $2 million in a loan from Ralph Yarro, the terms of which on default are that he gets all the assets, I think, as well as all the proceeds if they sell all the assets, if I've understood the document, with only half going to pay off the loan, and if SCO sells only some assets he takes half with none of it paying off the loan.

Well, it's over my head, so check my math, but I get the overall picture, all right. Yarro gets money no matter what happens. Here's how I picture the SCO graph trajectory:






$$ to Yarro and Friends

More accurately, SCO is holding what's left of the $2 million, but it's dribbling away. I'm sure Yarro and friends are deeply disturbed about that. Hahahaha.

Now, if you read the article linked to from October of 2007, you'll likely notice that about a month after entering Chapter 11 bankruptcy protection, SCO asked the court to let it sell certain of its assets, excluding the SCO v. IBM and SCO v. Novell litigation. They are trying again now. So, as you see, they are a determined lot. They may weave and bob, but they do not swerve.

The court didn't let it happen back in 2007, and Novell is objecting to the new proposed sale, too, but guess what the selling price allegedly was to be in 2007? $36,000,000. Now it's allegedly $600,000 to buy certain of this company's assets.

Hahahaha. This is a joke. Seriously. But I can't help but laugh at the sheer boldness.


  


SCO's MORs for November. Hahahaha. | 233 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
SCO's MORs for November. Hahahaha.
Authored by: eggplant37 on Saturday, February 12 2011 @ 02:08 PM EST
Barring miracles, SCO has no money left. None. Zilch. Zip. Gone.
Frittered. Wasted. Shame. So now what? Oh, yeah, Boies, Schiller,
et alia will forge ahead, pummeling the deceased equine, as per
their orders, all prepaid and what not. And we know how that will
fare. The writing is on the wall. I predict with great certainty
that their latest asset sale will get the nix, and so will the
appeal. End times is here.

[ Reply to This | # ]

Corrections here please
Authored by: nsomos on Saturday, February 12 2011 @ 02:27 PM EST
If any corrections should be needed, please place them here.
It is helpful to include the correction in the title.
e.g. SCO -> dead horse

[ Reply to This | # ]

New Picks comments
Authored by: nsomos on Saturday, February 12 2011 @ 02:31 PM EST
Don't make us guess which article you are commenting on.
Give the title in the title. Also, since articles scroll
down and off the page, it is helpful to place a link to
the article in your comment. Just set post mode to HTML
and follow the helpful directions. And always remember:
preview is your friend.

[ Reply to This | # ]

Off Topic posts here
Authored by: nsomos on Saturday, February 12 2011 @ 02:38 PM EST
Please post those comments that while off-topic for this
article, are still on-topic to Groklaw in general.
Try to follow the guidelines in "Important Stuff",
even if it pains you. Use of 'preview' can help you
keep from looking more foolish than you really are.

[ Reply to This | # ]

Comes collection contributions come here
Authored by: nsomos on Saturday, February 12 2011 @ 02:42 PM EST
Thanks for your efforts.

[ Reply to This | # ]

SCO's MORs for November. Hahahaha.
Authored by: mnuttall on Saturday, February 12 2011 @ 02:44 PM EST
"Mr. Kenge," said Allan, appearing enlightened all in a moment. "Excuse me, our time presses. Do I understand that the whole estate is found to have been absorbed in costs?" "Hem! I believe so," returned Mr. Kenge. "Mr. Vholes, what do YOU say?" "I believe so," said Mr. Vholes. "And that thus the suit lapses and melts away?" "Probably," returned Mr. Kenge. "Mr. Vholes?" "Probably," said Mr. Vholes.

[ Reply to This | # ]

OK, honest dumb question....
Authored by: dacii on Saturday, February 12 2011 @ 03:36 PM EST
Does the scoxq appeal continue? Even if the sale goes through in the BK court,
300,000 will last only three months. And if my math is correct, they only have
300,000 left. So a maximum of 6 months and then they reach 0. So at maximum
they can live till August, but I cant see the BK court allowing them to reach 0.
Does anyone have a guess as when this will end? I can't see a reason why
anyone would donate money to their cause. The courts and juries have stated
that they have nothing. There is little to no money coming in. I must guess
that they have less than three months. I would say April as a guess, and the
appeal fails.

[ Reply to This | # ]

Cooked books
Authored by: Anonymous on Saturday, February 12 2011 @ 03:39 PM EST
Don't forget all the as yet unbilled professional fees. The professionals are
way behind in billing. I wonder why.

[ Reply to This | # ]

SCO's MORs for November. Hahahaha.
Authored by: JamesK on Saturday, February 12 2011 @ 05:00 PM EST
{
Amazing. Not a single creditor paid off.
}

Can anyone be held liable for this?

---
IANALAIDPOOTV

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

[ Reply to This | # ]

Simply Pathetic!!!
Authored by: rsi on Saturday, February 12 2011 @ 06:07 PM EST
What else is there to say?

[ Reply to This | # ]

PJ, I think you're a bit off re Yarro
Authored by: Anonymous on Saturday, February 12 2011 @ 08:11 PM EST
... or, I could be a bit off.

But here's how I see it. SCO defaults. Yarro gets what's left.

What's left? $600,000 in the bank (today), plus maybe somebody willing to pay
$600,000 for certain assets (doubtful, because all that stuff is encumbered by
Novell et al's issues).

That means Yarro could get somewhere from $1,200,000 (best case) to less than
$600,000. For this, he spent $2,000,000. This is a net loss.

But Yarro gets the litigation! Yes, including the court decisions. But he gets
the right to shovel his own personal money into that black hole, in the form of
legal fees, for as long as he can keep the game alive.

Bottom line: I don't think Yarro pulled a clever one. I think he tried to pull
a clever one, and lost his shirt.

MSS2

[ Reply to This | # ]

Idea#3: Call it NoWin (n/t)
Authored by: Anonymous on Sunday, February 13 2011 @ 04:15 AM EST
;)

[ Reply to This | # ]

Future cash
Authored by: Anonymous on Sunday, February 13 2011 @ 06:25 AM EST
I think the key thing to look at is what they cash is going to do:

Cash in November: $900,000 (some of which is restricted)
Accounts Recievable: $500,000
Accounts Payable: $1,100,000
Taxes Payable: $200,000
Wages Payable $300,000

Add together the first two and substract the others and you get -$200,000.

They do have cash coming in, but it seems to be only just enough to cover the
cash going out each month and that's despite them clearly not paying a lot of
their bills. Sooner or later, they are going to have to pay the various bills
(the above only includes post-petition debts, which they are supposed to
continue to pay promptly or else be forced into Chapter 7), at which point they
will run out of cash.

SCO is clearly abusing bankruptcy protection in order to continue the lawsuits.
If you can't afford to pay your post-petition debts, you have to stop and go
into Chapter 7. That's the law. It is clear that SCO cannot afford to pay their
post-petition debts.

[ Reply to This | # ]

Taking over the litigation
Authored by: Anonymous on Sunday, February 13 2011 @ 08:50 AM EST
It seems counter to fairness (which doesn't mean counter to the law) that Yarro
could be SCO's successor to the lawsuits as far as it regards suing others
unless they also were SCO's successor to possible damage awards stemming from
those lawsuits.

Is it accurate to say that if Yarro took SCO's litigation over, they'd also be
on the hook for things like Novell's damages (still unpaid), defending and
potentially paying IBM's counterclaims (which I presume would come out of
automatic stay land once the opposing party wasn't a bankrupt entity), etc.?

And, if so, is Yarro or anyone else crazy enough to consider that a valuable and
desirable asset? I know there are still people out there hoping to win the
lottery on this, but it seems different for a public entity like SCO (who are
betting the stockholders' money) and Yarro betting their own...

[ Reply to This | # ]

Constructive Trust
Authored by: Anonymous on Sunday, February 13 2011 @ 08:53 AM EST
ISTR that the judge eventually agreed Novell was entitled to a constructive
trust on the cash that was contractually due Novell, given that SCO was Novell's
agent in collecting Unix fees. i.e. a bunch of the cash was not SCO's money.
Is that accounted for separately than SCO's cash on hand? And doesn't Novell
(at least for those moneys) jump ahead of Yarro or any other SCO creditor?

[ Reply to This | # ]

The $568,170 Question and a few others
Authored by: ausage on Wednesday, February 16 2011 @ 03:55 PM EST
I know that no one expects SCO to be able to balance and Balance sheet. There are aways small discrepancies in their Reports but usually is just a $1 hear and maybe $10 there. I was just loading their current MOR's into a spread sheet to do some analysis and discovered something seriously wrong. In the SCO Operations Inc. Statement of Operations, an extra $568,170 is needed in the cummulative to-date column to get from the "Net Profit (Loss) before Reorganization Items" of $(10,601,006) to the Net Profit (Loss) of $(16,810,747). The "Reorganization Items" total $6,465,071; giving a "Net Profit (Loss) before Taxes" (not listed in the MOR) of $(17,054,077). Subtracting taxes of $324,840 gives a true "Net Profit (Loss)" of $(17,378,917). I thought this might be a one time occurence so I started going back through the MOR's. So far Sept and Oct show the same problem, in the Month and Cummulative columns, so it appears that this has been accumulating for some time and that SCO has been consistently and significantly understating their operating operating losses to the court and their creditors. Another item that really stands out to me is the $10 million dollars that has been transferred to SCO's foreign subsidiaries over the course of the bankruptcy. When SCO first filed for bankruptcy, they excluded the foreign subsidiaries and asked for and were granted permission to send money overseas on the premise that SCO (USA) payed all foreign expenses and all foreign revenues would be sent directly to SCO. So far I have not been able to find any matching revenue stream for the money set away. Since we have never seen a balance sheet for any of the foreign subsidiaries and their book value is just under $750,000 I can only imagine two possibilities. Either they are a sink-hole that should have been shut down years ago, or some one has been siphoning cash out. Given that the new purchasers are very interested in acquiring the foreign subsidiaries I doubt that they are another sink-hole.

[ Reply to This | # ]

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