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Yarro Makes His Move and Cahn Moves to Block
Friday, May 06 2011 @ 04:12 AM EDT

Trouble in paradise. A subset of the group that lent $2 Million to SCO in 2010, including Ralph Yarro, has retained a lawyer who has sent a letter [PDF] to the SCO Group's Chapter 11 Trustee, Edward Cahn, claiming to be putting him on notice that he is in breach of the Secured Super-Priority Credit Agreement of March 5, 2010 and they want him to either cure by paying them their half of the UnXis sale proceeds or they demand the collateral. He has five days to fix the breach. Collateral would be mainly the right to any litigation proceeds, if any ever were to materialize, in that pretty much everything else was sold to UnXis. Here's the document [PDF] that listed the collateral the lenders were to get on a default.

Cahn, after some negotiations, filed a motion [PDF] with the court, asking the court to rule that there is no default and that the notices are wrongful and null and void. He is considering asking for sanctions.

In the motion, he points out that he has to ask for the hearing:

Article VII of the Credit Agreement requires the Trustee, absent cure of any default within five (5) Business Days, to seek a hearing with regard to the default or have the automatic stay automatically vacated without further order of this Court....

Accordingly, the only means by which the Trustee can evade unilateral action by the Subset Lenders in respect of purported breaches of the Credit Agreement is to request an Article VII Hearing.

In the correspondence during the negotiations, Cahn's lawyer, Bonnie Fatell, explains to the lenders' lawyer that according to the deal, the individual lenders all agreed that there would be a Collateral Agent, namely Seung Ni Capital Partners, with Ralph Yarro as Manager. Only Seung Ni can take any enforcement actions, she says, and she's communicated with Yarro, who said that Seung Ni didn't retain this new lawyer. Anyway, there's no default, she says [PDF], as the proceeds from the sale to unXis are in escrow, and SCO intends to fully comply. But the response [PDF] comes back that Yarro has indeed retained him and they want what they want and they want it now. Further, the lawyer writes, while the Credit Agreement said that only Seung Ni Capital Partners could act to enforce in the event of a default, the actual Order [PDF] by the court used different language, saying that *any* of the Lenders could act. And indeed it does.

But here's the weird part. The Lenders, as they refer to themselves -- the letter lists them as Steven Shin, Jan Loeb and Leap Tide Capital Management, Inc., plus eventually Yarro -- aren't all the lenders we saw back when they were seeking approval of the loan by the bankruptcy court. Rex Lewis is not mentioned by the new lawyer or Hank Beinstein, Dan Campbell or Darcy Mott. Maybe they are still there, just not joining in sending the letters. When SCO filed with the SEC the news about the loan, we saw yet another list of lenders:

As of March 5, 2010, The SCO Group, Inc., (the “Company”) obtained funding for $2.0 million in postpetition financing (the “Loan”) in the form of a secured super-priority credit agreement (the “Secured Credit Agreement”), from a group of private lenders including Seung Ni Capital Partners, LLC, Jan Loeb, Leap Tide Capital Management, Inc., Steven Shin, Henry C. Beinstein, Stanley A. Beinstein, Neil J. Gagnon, Robert Dyson, WBS LLC, Ne Obliviscaris, Ltd., Darcy Mott, Clemons F. Walker and Herbert W. Jackson (collectively, the “Lenders”).
Where are they now in this picture? Is it possible that the subset lenders feel they are getting the short end of the stick and they're making a move to get what they can? Or are they worried that Cahn will pay his own lawyer and there will be nothing left at all from the unXis proceeds for them after the bills are paid?

The lawyer retained is Edward E. Neiger, a New York City bankruptcy lawyer who is a partner in the firm, which launched in 2008. He complains that when his client provided the money, the trustee "through Ocean Park, represented that the assets would net over $3,000,000. This was not the case..." Ah, the joys of doing business with SCOfolk.

Loeb, if you recall, is President and Portfolio Manager of Leap Tide, or he was back when he sent a letter [PDF] to the bankruptcy judge in 2009, objecting to IBM's and Novell's suggestion that SCO convert to Chapter 7, telling the court that Leap Tide had invested in SCO since 2005, after doing research that convinced them that its claims against IBM and Novell had merit. It offered additional capital "under certain circumstances and terms", so SCO could "pursue its claims against IBM and Novell and continue to develop its products and services." So, true believers indeed. The dream never dies with these people.

I asked at the time the loan was first being considered, which was just before the trial in SCO v. Novell, "How does SCO plan to pay off a loan if it loses later this month in SCO v. Novell?" Why not wait, I suggested, to see if there was at least a hope of paying back the loan. Well, lose they did. But by then the loan had been approved and was a done deal. Didn't these lenders contemplate that a loss was possible?

Here's how SCO defined the litigation proceeds in the SEC filing:

Litigation Proceeds means the amount of any final non-appealable verdict or other award received by the Company in connection with the two pending litigation matters of the Company or other litigation matters between the Company and such parties, including, settlements, interest and attorney fees paid by the other parties to such litigation, as well as proceeds from the sale of Company assets occurring in connection with the settlement of such litigation (“Litigation Proceeds”).
But notice what Neiger writes to Fatell in one of the letters:
You will note that the Borrower agreed to indemnify the Lenders for expenses "incurred by the Lender in connection with the enforcement or protection of its rights in connection with this Agreement." DIP Agreement, Section 8.05. The Borrower also agreed to waive claims against the Lenders. DIP Agreement, paragraph 8.05(c).
Here is the Order [PDF], and here is the very language cited:
15. So long as the Obligations (as defined under the Credit Agreement) are outstanding, the happening of any Event of Default, as such term is defined in Article VII of the Credit Agreement, and during the continuance of any Event of Default, without further order of, application to, or action by, this Court, the Lenders: (a) may by notice to the Debtors declare that all the Lenders' portion of the Commitment be terminated, whereupon any and all obligations of the Lenders to make a portion of the Loan shall immediately terminate; and (b) may by notice to the Debtors, declare the Loan, all Basic Interest and Default Interest owed thereon and all other amounts and Obligations payable under the Credit Agreement in respect thereof to be forthwith due and payable, whereupon the Loan, all such interest and all such amounts and Obligations, shall become and be forthwith due and payable. In addition, subject solely to any requirement of the giving of notice by the terms of this Order, the Debtors shall have a period of five (5) business days in which to either cure the Default or obtain a scheduled court hearing with regard to the Default. In the event the Debtor fails to either cure the Default or obtain a scheduled court hearing with regard to the Default, the automatic stay provided in Bankruptcy Code section 362 shall be deemed automatically vacated without further action or order of this Court, and the Lenders shall be entitled to exercise all of their respective rights and remedies under the Loan Documents, including all rights and remedies with respect to the Collateral as provided in the Loan Documents; provided however, Lenders shall have no right to take any action with respect to the Litigation. Notwithstanding the foregoing provisions, upon the occurrence of an Event of Default, the Debtors shall have the right to use any cash available at such time for the payment of its fees and administrative expenses. Upon the occurrence and during the continuance of an Event of Default under the Loan Documents, payments of any amounts on account of the Secured Liens and the Superpriority Claims shall be subject and subordinate only to payment of all accrued and unpaid wages, salaries, benefits and severance and all taxes associated therewith for employees of the Debtors and the foreign subsidiaries of the Debtors (collectively, the "Employee Carve-Out Amounts"). In the event that the Lenders exercise any rights or remedies under the Loan Documents, the Lenders shall deposit all collections and proceeds of Collateral (as defined in the Credit Agreement) into a segregated account until all Employee Carve-Out Amounts are paid in full.
You can see that Cahn had five days to cure or seek a hearing, and he has opted to seek a court hearing.

If you look at the Security and Pledge Agreement, Exhibit E on this page, it says that only the Agent can act:

r. Collateral Agent Agreement. Debtor acknowledges and agrees that Secured Party, as Agent and alone, shall have the right to enforce all Lenders’ rights relating to the Collateral under the Loan Documents and under duplicate originals of all of the Loan Documents executed by the Lenders (other than the Lender) and Debtor.
When SCO filed the 8K/A with the SEC, it did indeed say what the Lenders' attorney quoted:
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.

So long as the Loan is outstanding, upon an event of default, as such term is defined in the Secured Credit Agreement (“Event of Default”) and during the continuance of any Event of Default, the Lenders: (a) may by notice to the Company declare that all the Lenders’ loan commitment be terminated, whereupon any and all obligations of the Lenders to make a portion of the Loan shall immediately terminate; and (b) may by notice to the Company, declare the Loan, including all interest owed thereon and all other amounts and obligations payable under the Secured Credit Agreement due and payable. The Company shall have a period of five (5) business days in which to either cure the default or obtain a scheduled court hearing with regard to the default. In the event the Company fails to either cure the default or obtain a scheduled court hearing with regard to the default, the automatic stay provided in the Bankruptcy Code Section 362 shall be deemed automatically vacated without further action or order by the Bankruptcy Court, and the Lenders shall be entitled to exercise all of the respective rights and remedies under the Secured Credit Agreement and related documents, including all rights and remedies with respect to the collateral as provided in such agreements. In the event of default under the Secured Credit Agreement that continues after notice, upon demand of the Lenders, the Company shall pay a late fee equal to 5% of any past due amount, and the interest rate applicable shall be increased by 6% per annum until the default is cured.

In addition, the Lenders have agreed that the Company may sell core assets, as defined in the Secured Credit Agreement, provided the Company utilizes 50% of proceeds from such core asset sales to pay the amounts due to the Lenders. Sales of non-core assets are not subject to such restriction. The Secured Credit Agreement contains representations, warranties and financial covenants which are typical for agreements of this type entered into by companies in bankruptcy, including a prohibition on the incurrence of additional indebtedness and incurring additional liens on the collateral securing the Loan.

In connection with entering into the Secured Credit Agreement, the Company also entered into a Stock Pledge Agreement with the Lenders pursuant to which the Company and its subsidiaries pledged shares of stock owned by them in their subsidiary companies (the “Shares”) as security for the Loan. Except as otherwise provided in the Stock Pledge Agreement, and subject to the rights of the Lenders in the event of a default, the Company retains voting rights over the Shares, as well as the right to receive dividends or distributions with respect to such Shares. In the event of default under the Secured Credit Agreement, the Lenders are entitled to exercise all rights under the Secured Credit Agreement and may sell the Shares pledged as collateral as described in the Share Pledge Agreement.

The Company and the Lenders also entered into a Security and Pledge Agreement and a Collateral Agent Agreement which provides a lien and security interest in favor of the Lenders in substantially all of the assets and properties owned or acquired by the Company or its subsidiaries as security for the Loan and related obligations. The Security and Pledge Agreement contains representations, warranties, covenants and remedies provisions which are typical for agreements of this type entered into by a company in bankruptcy.

In connection with entering into the Secured Credit Agreement, the Company also entered into the Collateral Agent Agreement pursuant to which Seung Ni Capital Partners, L.L.C. agreed to act as collateral agent for the Lender.

The foregoing description of the Secured Credit Agreement and related documents does not purport to be complete and is qualified in its entirety by reference to the text of the agreements which are attached hereto as exhibits to this Form 8-K and are incorporated by reference herein.

This financing is intended to allow for the preservation of the value of the Company’s business while enabling the Company to proceed with asset sales, continue supporting SCO’s loyal UNIX customer base and to pursue litigation against, among others, IBM and Novell. The Secured Credit Agreement provides that up to 50% of the Loan proceeds may be used to pay litigation trial costs and related expenses, including compensating employees assisting with the litigation and the remaining 50% of the Loan proceeds may be used for the payment of administrative expenses, in the Trustee’s discretion.

Everything SCO filed with the SEC on this can be found here, the 8K/A at the top. And if you look at the final document on this page, the Stock Pledge Agreement, you will see in Section 5.1 the same wording:
SECTION 12.2 Pledgor shall pay or reimburse Pledgee (or cause Pledgee to be paid or reimbursed) on demand for all reasonable out of pocket costs and expenses (including without limitation reasonable attorneys' fees and legal expenses) paid or incurred by Pledgee in connection with (a) the administration of this Pledge Agreement during the existence of an Event of Default, and (b) the exercise and enforcement of any of Pledgee’s rights, powers and remedies hereunder, including without limitation its right to perform Pledgor's covenants and agreements hereunder to the extent Pledgor fails to do so.
By now, you are wondering why anyone would want to be a lawyer, I suppose. I confess I've never understood wanting to be a bankruptcy lawyer, myself. But let's see how Cahn decided to handle this dispute. First, here are all the filings, so you can follow along meaningfully:

05/05/2011 - 1269 - Motion to Approve // Motion Of The Chapter 11 Trustee For (I) Hearing Pursuant To Article VII Of The Credit Agreement And (II) Entry Of An Order (A) Determining There Is No Default By The Trustee Under The Loan Documents, (B) Directing That The Automatic Stay Remains In Full Force And Effect, And (C) Deeming Wrongful Default Notices Null And Void Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. Hearing scheduled for 5/23/2011 at 11:00 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 5/16/2011. (Attachments: # 1 Notice # 2 Exhibit A # 3 Exhibit B # 4 Exhibit C # 5 Exhibit D # 6 Proposed Form of Order # 7 Certificate of Service) (Fatell, Bonnie) (Entered: 05/05/2011)

Here's the Preliminary Statement from Cahn's motion, and what you may find interesting is that Fatell in the negotiations didn't tell the lawyer for the subset lenders all the reasons that she lists in the motion for why they are not entitled to what they are seeking:
PRELIMINARY STATEMENT

During the evening of Thursday, April 28, 2011, the Chapter 11 Trustee received the First Wrongful Default Notice from counsel to three (3) lenders who are parties to the Credit Agreement – Steve Shin, Jan Loeb and Leap Tide (the “Non-Controlling Lenders”) – purportedly declaring a default by the Trustee under the Credit Agreement. A true and correct copy of the First Wrongful Default Notice is attached as Exhibit “A” hereto. The First Wrongful Default Notice was sent improperly by the Non-Controlling Lenders because they lacked authority, as of April 28th, to take action or even threaten to take action, on behalf of themselves or any of the other Lenders, with respect to rights and remedies under the Credit Agreement. [See Collateral Agent Agreement, Section 4(e)]3. Thereafter, by letter response dated May 3, 2011 (the “Trustee’s Response”), the Trustee, among other things, advised the Non-Controlling Lenders, they lacked authority to enforce rights and remedies under the Credit Agreement. A true and correct copy of the Trustee’s Response is attached as Exhibit “B” hereto.

After an exchange of emails between counsel for the Trustee and the Non-Controlling Lenders, and in an attempt to cure the authority defect in connection with the First Wrongful Default Notice, counsel to the Non-Controlling Lenders sent the Second Wrongful Default Notice to the Trustee, which adds Richard J. Yarro III (as collateral agent) to the parties represented by counsel for the Non-Controlling Lenders (together with Yarro, the “Subset Lenders”). True and correct copies of the exchange of emails by the respective counsel are attached as Exhibit “C” hereto; a true and correct copy of the Second Wrongful Default Notice is attached as Exhibit “D” hereto. The Second Wrongful Default Notice does not indicate that counsel to the Subset Lenders has been retained by Seung Ni Capital Partners, L.L.C. (“SNCP”), the Collateral Agent.

Notwithstanding the foregoing however, the Trustee submits that there is not an existing default under the Credit Agreement. It is curious that at no time prior to sending the Wrongful Default Notices did the Subset Lenders or their counsel reach out to the Chapter 11 Trustee or his counsel to seek information regarding the status of the sale proceeds and/or the two alleged breaches of Section 5.10(b) of the Credit Agreement - the pivotal issues raised by the Subset Lenders: specifically, that after the closing of the sale to unXis, Inc., the Trustee did not (1) give “prior written notice to...Lender...[to] use fifty percent (50%) of the net proceeds..from any Core Asset Sale4”; nor (2) “pay the remaining fifty percent (50%) of such net sales or license proceeds toward retirement and payment of the amount due under the Note, other than payment of the Loan Fee.” [Credit Agreement, Section 5.10(b)].

Those purported breaches of the Credit Agreement cannot be the basis for a proper default notice since (1) the proceeds from the sale to unXis, Inc. are still being held in escrow and have not been used or disbursed by the Trustee and (2) the Trustee’s financial advisors are still in the process of determining the net proceeds from the sale (for which there is no deadline by which such determination must be made under the terms of the Credit Agreement). Accordingly, the Chapter 11 Trustee respectfully submits that this Court should enter an order granting the relief requested herein.

______________

3 Specifically, the Non-Controlling Lenders waived their right to enforce rights and remedies under the Credit Agreement by agreeing in the Collateral Agent Agreement “that none of [the Lenders] shall have, and each of them hereby waives, the right to take or threaten to take any action to enforce any term or provision in any of the Security Documents or to enforce any rights with respect to any or all of the Collateral, it being understood that the Collateral Agent alone shall have the right to seek and enforce any and all rights and remedies in the Collateral and under this Agreement.” [Collateral Agent Agreement, Section 4(e)].

4 “Core Asset Sale” means the sale, license, transfer or other disposition (by way of merger, casualty, condemnation or otherwise) by the Borrower to any Person (other than the Borrower) of any SCO assets other than Borrower’s rights in the Litigation and the Litigation Proceeds and other than SCO’s Non-Core Assets...” [Credit Agreement, Section 1.01.] “Non-Core Assets” means SCO’s excess equipment and other miscellaneous assets in storage (truck, forklifts and excess office equipment), the Java Patent, more particularly described and known as US Patent No. 6,931,544, and assets related to SCO’s mobility business. Id.

So, Cahn says the first notice was null and void, because the lenders at that time had no authority to act. He calls them "Noncontrolling Lenders". Then Yarro joined in, but Cahn points out that he isn't the Agent, Seung Ni is, and they've seen no evidence that Seung Ni has retained this lawyer, only Yarro personally. And finally, there is no default. The sale just happened, the proceeds are in escrow, there's no deadline to figure out the net proceeds, and they are still figuring it out. According to the deal everyone signed, SCO keeps 50% of any sale, plus "reasonable closing fees and expenses of the sale". And he says since there is no default, he believes the "Subset Lenders" are violating the automatic stay, and he is considering sanctions:
17. The Subset Lenders have violated the automatic stay by (1) declaring a default when none has occurred and such facts could readily have been ascertained through inquiry of the Trustee, (2) seeking to exercise and exercising control over estate assets by instructing the Trustee that “no monies or assets leave the estate until further notice,” and (3) sending the Wrongful Default Notices without authority to act in place of the Collateral Agent. The Credit Agreement specifically provides that “[n]otwithstanding the [default provisions of Article VII], upon the occurrence of an Event of Default, the Debtors shall have the right to use any cash available at such time for the payment of its fees and administrative expenses.” [Credit Agreement, Article VII]. As a result of the foregoing violations, the Trustee reserves his right to seek sanctions for the knowing and willful violation of the automatic stay by the Subset Lenders.
Note footnotes 5 and 6:
5 To the extent the Subset Lenders cannot show authority for causing the filing of this Motion in response to the Wrongful Default Notices, the Trustee reserves his right to pursue sanctions against the Subset Lenders as well as recovery for actual damages, including costs and attorneys’ fees, for their knowing and willful violation of the automatic stay.

6 Based upon the identity of the Subset Lenders represented by counsel, the Trustee remains unsure whether the Subset Lenders even have authority to enforce the Lenders’ rights in the Collateral and the Obligations of the Debtors’ estates under to the Loan Documents.

Cahn doesn't take kindly to threats, if you remember the dustup with Darl McBride. He doesn't get mad. He gets even. And this is bankruptcy court. Has the judge there ever said no to Cahn? If so, I can't recall it off the top of my head. But as in any motion, objections can be filed, and there will be a hearing on this later this month.

And a little voice inside my head keeps asking, is this all just so much Kabuki theater?


  


Yarro Makes His Move and Cahn Moves to Block | 166 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Yarro Makes His Move and Cahn Moves to Block
Authored by: dio gratia on Friday, May 06 2011 @ 04:42 AM EDT
You'd think they were expecting a settlement offer from Novell or something.

[ Reply to This | # ]

They all deserve each-other. n/t
Authored by: Anonymous on Friday, May 06 2011 @ 05:18 AM EDT
.

[ Reply to This | # ]

Bankruptcy lawyer:
Authored by: Anonymous on Friday, May 06 2011 @ 05:49 AM EDT
Always at the party but never brings any.
Pays to sit in while others smoke.

[ Reply to This | # ]

Yeah But...
Authored by: complex_number on Friday, May 06 2011 @ 06:28 AM EDT
Quite The sale just happened, the proceeds are in escrow, there's no deadline to figure out the net proceeds, and they are still figuring it out.
That may well be the case but all the time this 'figuring' is going on, the Lawyers billable hours are climbing. Won't that be taken from the monies (all $2.00 of it...) that are in escrow?
We have seen month after month lawyer bill after lawyer bill being presented. How many hours were spent formuating this IMHO totally fictious 'restructuring plan'. You know the plan that was so devastating & cunning(in a Baldric sort of way) that it never saw the light of day?

Sigh. Just when we thought is was all over. I'm waiting for David Coleman to pipe in 'It is now'. (you have to be British to get that one)

---
Ubuntu & 'apt-get' are not the answer to Life, The Universe & Everything which is of course, "42" or is it 1.618?

[ Reply to This | # ]

Off topic here please
Authored by: tiger99 on Friday, May 06 2011 @ 06:30 AM EDT
Please remember to make clickies where possible.

[ Reply to This | # ]

Corrections here please, if needed.
Authored by: tiger99 on Friday, May 06 2011 @ 06:40 AM EDT
To assist PJ, please indicate the nature of the correction in the title of your
post.

[ Reply to This | # ]

Newspick discussions here please
Authored by: tiger99 on Friday, May 06 2011 @ 06:42 AM EDT
Please put the title of the Groklaw newspick item in the title of your post, and
if possible make a link within your post to the article, so it is still easily
accessible once the newspick item scrolls off the bottom of the home page.

[ Reply to This | # ]

Comes goes here....
Authored by: tiger99 on Friday, May 06 2011 @ 06:44 AM EDT
If you are working on transcribing the Comes depositions, this is the place and
you probably know what to do.

[ Reply to This | # ]

Which controls? Court order or loan agreement
Authored by: darrellb on Friday, May 06 2011 @ 07:24 AM EDT
Assuming that the court order conflicts with the loan agreement with respect to
who may enforce the loan's terms, I wonder which is legally controlling? (Not
that it matters becuase the BK judge will do whatever he wants, anyway)



---
darrellB

[ Reply to This | # ]

Yarro Makes His Move and Cahn Moves to Block
Authored by: JamesK on Friday, May 06 2011 @ 07:27 AM EDT
PJ

How can you possibly want to retire, when stuff like this keeps happening? Just
think of all the fun you're going to miss, revealing it to the world! ;-)

---
IANALAIDPOOTV

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

[ Reply to This | # ]

Tears of Laughter :'-)
Authored by: Anonymous on Friday, May 06 2011 @ 07:31 AM EDT
Its all just rats in a pit at this stage.

SilverWave NSI

[ Reply to This | # ]

I think I get it
Authored by: Anonymous on Friday, May 06 2011 @ 10:34 AM EDT
I could not figure out why they were throwing more money at this, until I
realised that they have an "investor" who wants to buy this or put
some more money into it. they have to get it done before the Appeals court rules
and kills what ever value is left.
bobm

[ Reply to This | # ]

Kabuki theater
Authored by: Anonymous on Friday, May 06 2011 @ 11:20 AM EDT
Is this simply a distraction they cooked up because they don't want anyone to
notice something else they are doing? It's too noisy and public, with all of the
documents open. They would normally redact a lot of those details.

[ Reply to This | # ]

Yarro Makes His Move and Cahn Moves to Block
Authored by: wvhillbilly on Friday, May 06 2011 @ 12:03 PM EDT
Awk! Puck! Puck! Puck! Puck!

(Chickens coming home to roost)

---
"It is written." always trumps, "Um, ah, well, I thought..."

[ Reply to This | # ]

Not the world's best investment (but they didn't ask me)
Authored by: YurtGuppy on Friday, May 06 2011 @ 12:21 PM EDT

When I grow up I want to invest $2,000,000
for shot at half of $600,000.





---
Life from inside the bowl.

[ Reply to This | # ]

Quintin Tarantino couldn't write a script this weird.
Authored by: Anonymous on Friday, May 06 2011 @ 01:12 PM EDT
Seriously, the more SCO goes on (even on life support at this point), the more
weird it becomes. Can't wait for the movie to come out.

[ Reply to This | # ]

Interest is not being paid on the loan
Authored by: Anonymous on Friday, May 06 2011 @ 01:50 PM EDT
On looking at the MOR's month over month the amount due for the loan keeps
increasing.
Yarro would probably have a better reason to cancel the loan for non-payment of
interest. That would have required that interest payment be in the terms of the
loan.
Also Cahn could be raked over the coals for having these payments past 30 days
due.

Looks like payment of interest was not in the terms of the loan or Yarro has a
bad lawyer.

[ Reply to This | # ]

Litigation Proceeds
Authored by: Anonymous on Friday, May 06 2011 @ 02:18 PM EDT
Wouldn't the net proceeds of the litigation be around negative 6 million
dollars? Why not have Yarro and company pay the SCO estate the entire cost of
the litigation?

[ Reply to This | # ]

Where is Novell's money?
Authored by: Anonymous on Friday, May 06 2011 @ 03:14 PM EDT
Unless I'm mistaken, Novell still hasn't received the money that SCO was holding
for them (remember the unix license royalties?). Wouldn't that take precedence
over other payouts since it's not actually property of the estate, just held in
trust for it's owner, Novell. Are there any outstanding disputes regarding the
amount or need to remit?

z!

[ Reply to This | # ]

Yarro Makes His Move and Cahn Moves to Block
Authored by: wvhillbilly on Friday, May 06 2011 @ 06:25 PM EDT
In the event the Debtor fails to either cure the Default or obtain a scheduled court hearing with regard to the Default, the automatic stay provided in Bankruptcy Code section 362 shall be deemed automatically vacated without further action or order of this Court, and the Lenders shall be entitled to exercise all of their respective rights and remedies under the Loan Documents, including all rights and remedies with respect to the Collateral as provided in the Loan Documents...
(Emphasis added.)

Do the lenders have legal authority to do this (vacate the automatic stay in the manner specified) or does the court have the final say in this matter? And since the lenders have a lein on SCO's assets can they go after unXis now that SCO has sold all its assets to them, or are they just out of luck?

---
"It is written." always trumps, "Um, ah, well, I thought..."

[ Reply to This | # ]

Can a hyena change its spots ?
Authored by: _Arthur on Friday, May 06 2011 @ 07:33 PM EDT
The SCO Group as we know it is about to disappear.

Under the new name TSG Group Inc.

See motion #1271

Also, OPA billed $18,786 + $848. Yawn.

[ Reply to This | # ]

Automatic stay
Authored by: Anonymous on Friday, May 06 2011 @ 07:44 PM EDT
When will the automatic stay be lifted?

Is it possible there are other players waiting to sue but can not because of the
stay!!

[ Reply to This | # ]

Does Yarro really want to win this
Authored by: Anonymous on Saturday, May 07 2011 @ 12:54 AM EDT
I got to thinking about this and their are some problems that I don't think they
thought about. Such as if they get the litigation they will not be getting it
free and clear, but with IBM and Red hat attached, and that with nothing
standing in the way to protect them. Also BS&F may claim that it is a change
of control so they can ride off into the sunset, and now they will have to pay
for a bunch of new lawyers.
bobm

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Last Post
Authored by: Ian Al on Saturday, May 07 2011 @ 03:44 AM EDT
Or, is it?

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Regards
Ian Al
Now, this is not the end. It is not even the beginning to the end. But it is,
perhaps, the end of the beginning. - Winston Churchill

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An agricultural finish?
Authored by: Zanthopsis on Monday, May 09 2011 @ 01:47 PM EDT

Among the "General Intangible" items pledged as collateral by the SCO Group, Inc., and SCO Operations, Inc., for the $2 million loan from Seung Ni Capital Partners, L.L.C., are "manure spreading licenses." Hmm . . . , portending things to come?

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Yarro Makes His Move and Cahn Moves to Block
Authored by: iraskygazer on Tuesday, May 10 2011 @ 01:42 PM EDT
All I want to know is what kind of drugs the SCO group were handing out during
bankruptcy proceedings. Somebody had to be on something really psychodelic to
consider loaning money to a company in bankruptcy.

Oh, I guess the lenders had a momentary lapse of reason when they were shown the
possible return for their investment in the failed adventure called SCO.

I just wish this lending stupidity didn't have an effect on legitimate
operations. But we all know who ends up paying for this legal trickery, the
everyday software/service customer. Indirectly in one way or another.

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