decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books
Your contributions keep Groklaw going.
To donate to Groklaw 2.0:

Groklaw Gear

Click here to send an email to the editor of this weblog.


Contact PJ

Click here to email PJ. You won't find me on Facebook Donate Paypal


User Functions

Username:

Password:

Don't have an account yet? Sign up as a New User

No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster
SCO Files Final Chapter 11 Report in Bankruptcy, Files August MORs; Now It's Onward and Downward in Chapter 7 ~pj
Wednesday, September 26 2012 @ 01:43 AM EDT

SCO's Chapter 11 trustee has removed that hat, filed his final report [PDF] in that capacity, including the monthly reports for August up to the 24th, when the conversion became official, and has now put on his Chapter 7 bankruptcy trustee hat.

SCO lists $82,431 in cash on hand on the conversion date. That means some of you reading this now have more money than SCO.

I'll bet you don't owe as much, though. There is a list [PDF] of all the to-date-stiffed entities and individuals, or more precisely a list of "unpaid debts incurred after filing of original petition to date of conversion" to Chapter 7, meaning from September 14, 2007 through August 24, 2012. The August monthly report lists a total of $7,187.786 in professional fees paid since the bankruptcy began, plus $492,981 in expenses, so this list is in addition to that.

I see $3,000,000 listed as an unliquidated contingent claim from Citi Financial, Inc., dated April of 2008. Where did that come from? For what? That would be post-bankruptcy. Unliquidated means the exact amount of a claim is not known yet. Contingent means the debt depends on some event that hasn't yet happened and may not ever happen. Sun Microsystem is listed for a contingent unliquidated claim too, with no amount listed. Since the bankruptcy began? What is that about?

There is also $59,700,000 listed as claimed by Stamell & Schager, the New York City law firm that brought a class action over the Caldera IPO. I thought that was settled a while ago, with the firm agreeing not to go after SCO's assets but just get paid by their insurance. So maybe it's on the list, just because this is a comprehensive list of all the debts claimed during the specific time period. Here's that firm's latest, a class action on behalf of shareholders who "suffered a loss" in the Facebook IPO.

Kevin McBride is still owed $26,645, I see. Or $22,000, depending on which list you go by. An amended, corrected version of the list [PDF] shows monies owed to all the law firms. A lot of money is still owed to the law firms, even for the time after SCO filed for bankruptcy.

And SCO lists $30,906,110 and $3,506,526 owed to Novell. Do not hold your breath, in that the entire bankruptcy was motivated by fear of having to pay Novell. Red Hat and IBM are listed, because of the litigation, but with no amounts, because while it's probably huge, the amounts are so far unknown and may never be known, not unless the litigations start up again. SUSE Linux is owed $1,345,000. What are the odds it will ever see a dime?

Speaking of such unlikely odds, Marc Rochkind is still owed $1,946.39 for his services. That's a nice touch. Sage offers "forensic and investigative accounting, economic damage analysis, and business valuation services". I could have advised them about the likelihood of ever being paid by SCO, had they asked.

Remember Alia Shahbaz from 2008? The sad ex-employee, who claimed she was wrongfully terminated after 23 years with the firm when SCO downsized in October of 2006 and is owed back pay and severance and wanted the bankruptcy court to help her. Like there was ever any hope of that happening in the bankruptcy court in Delaware. The amounts owed remain $15,822.66 plus $8,366.53 and $5,196.97. The perils of working for a company doing business in the bogoverse.

Remember when Ralph Yarro got all the SCO stock from Canopy when the latter insisted on frog marching him out of the building and slamming the door behind him? We had a lot of trolls and/or shills stop by Groklaw telling us what a wonderful deal it was for Yarro. I guess trolls and shills don't always know what they are talking about. The problem with ideology, as President Clinton pointed out recently, is that you get the answer before you look at the facts.

The conversion happened on August 24th, and a notice goes out to all the folks owed anything, and there will be a hearing, the notice from the court says, about "allowance and/or payment of an administrative expense". Hardy har.

The filings:

08/29/2012 - 1444 - Claims Register Final in alphabetical and numerical order. Filed by Epiq Bankruptcy Solutions LLC. (Attachments: # 1 numerical) (JRB) (Entered: 08/29/2012)

08/30/2012 - 1445 - Notice of Conversion of Chapter 11 to Chapter 7 (TAS) (Entered: 08/30/2012)

08/30/2012 - 1446 - Meeting of Creditors 341(a) meeting to be held on 9/25/2012 at 10:00 AM at US District Court, 844 King St., Room 2112, Wilmington, Delaware. Proofs of Claims due by 12/24/2012. Government Proof of Claim due by 2/20/2013. (CLO) (Entered: 08/30/2012)

08/30/2012 - 1447 - BNC Notice of Letter concerning Jointly Administered Cases (related document(s)1446) (CLO) (Entered: 08/30/2012)

09/01/2012 - 1448 - BNC Certificate of Mailing - Meeting of Creditors. (related document(s)1446) Notice Date 09/01/2012. (Admin.) (Entered: 09/02/2012)

09/01/2012 - 1449 - BNC Certificate of Mailing. (related document(s)1447) Notice Date 09/01/2012. (Admin.) (Entered: 09/02/2012)

09/01/2012 - 1450 - BNC Certificate of Mailing. (related document(s)1445) Notice Date 09/01/2012. (Admin.) (Entered: 09/02/2012)

09/06/2012 - 1451 - Certificate of No Objection Re: Monthly Application for Compensation (Twenty-Sixth) of Blank Rome LLP for the period December 1, 2011 to December 31, 2011 (related document(s)1424) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley) (Entered: 09/06/2012)

09/06/2012 - 1452 - Certificate of No Objection Re: Monthly Application for Compensation (Twenty-Seventh) of Blank Rome LLP for the period January 1, 2012 to January 31, 2012 (related document(s)1425) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley) (Entered: 09/06/2012)

09/06/2012 - 1453 - Certificate of No Objection Re: Monthly Application for Compensation (Twenty-Eighth) of Blank Rome LLP for the period February 1, 2012 to February 29, 2012 (related document(s)1426) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley) (Entered: 09/06/2012)

09/06/2012 - 1454 - Certificate of No Objection Re: Monthly Application for Compensation (Twenty-Ninth) of Blank Rome LLP for the period March 1, 2012 to March 31, 2012 (related document(s)1427) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley) (Entered: 09/06/2012)

09/06/2012 - 1455 - Certificate of No Objection Re: Monthly Application for Compensation (Thirtieth) of Blank Rome LLP for the period April 1, 2012 to July 31, 2012 (related document(s)1428) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley) (Entered: 09/06/2012)

09/07/2012 - 1456 - Schedule of Unpaid Debts upon Conversion to Chapter 7 Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley) (Entered: 09/07/2012)

09/10/2012 - 1457 - Amended Schedule of Unpaid Debts upon Conversion to Chapter 7 Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley) Modified on 9/11/2012 (SB). (Entered: 09/10/2012)

09/18/2012 - 1458 - Notice of Address Change Filed by William & Susan Major. (TAS) (Entered: 09/18/2012)

09/24/2012 - 1459 - Debtor-In-Possession Monthly Operating Report for Filing Period As of 8/24/12 (TSG Group, Inc. (f/k/a The SCO Group, Inc.), et al. Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Attachments: # 1 Certificate of Service) (Tarr, Stanley) (Entered: 09/24/2012)

09/24/2012 - 1460 - Debtor-In-Possession Monthly Operating Report for Filing Period As of 8/24/12 (TSG Operations, Inc. (f/k/a SCO Operations, Inc.), et al.) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Attachments: # 1 Certificate of Service) (Tarr, Stanley) (Entered: 09/24/2012)

09/24/2012 - 1461 - Final Report Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley) (Entered: 09/24/2012)

09/24/2012 - 1462 - Notice of Withdrawal of Final Report (related document(s)1461) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley) (Entered: 09/24/2012)

09/24/2012 - 1463 - Final Report Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley) (Entered: 09/24/2012)

Here's what the professionals are owed for work done during the Chapter 11 bankruptcy:
  • AUSTIN RAPP & HARDMAN: 1,600.00
  • BERGER SINGERMAN: 139,972.67
  • BLANK ROME: 574,632.66
  • BOIES SCHILLER & FLEXNER C/O Amy Habie, CFO: 219,834.61
  • BOIES SCHILLER & FLEXNER LLP C/O Amy Habie, CFO: 57,014.44
  • DORSEY & WHITNEY: 35,815.58
  • ELKINGTON & FIFE: 3,194.63
  • EPIQ BANKRUPTCY SOLUTIONS: 2,158.90
  • FILLMORE SPENCER, LLC: 171.50
  • HATCH JAMES & DODGE: 6,724.93
  • KEVIN MCBRIDE: 22,000.00
  • LENZ & STAEHELIN (Switzerland): 1,877.29
  • MESIROW FINANCIAL CONSULTING: 9,055.34
  • OCEANPARK ADVISORS: 337,010.21
  • PACHULSKI STANG ZIEHL JONES: 27,449.00
  • PARSONS KINGHORN HARRIS: 450.00
  • SEUNG NI CAPITAL PARTNERS (Collateral Agent, ThinkAtomic) $2,248,218.11 (Secured)
  • TANNER & CO: 1,419.75
I see Amy Habie of the notorious gardener's case is still at Boies Schiller, serving as CFO. And Blank Rome, the Chapter 11 Trustee's law firm, is owed over half a million. Might that explain why he told the bankruptcy judge that it was worth it to go forward with SCO's litigation lottery, hoping to get paid somehow?

What does the list of unpaid professionals mean? It means that the Ralph Yarro group of lenders are extremely unlikely to ever see a dime. They signed off on the idea that the professionals are ahead of them in line, and with a list like this, SCO's original dream of $zillions from IBM would have to come true for there to be anything to pay them with. In fact, the first filed list didn't even mention the debt owed to the lenders. The corrected version [PDF] added Seung Ni Capital Partners, the Yarro group, which is now owed $2,248,218.11.

Here's the Notice of the filing of the final Chapter 11 report:

NOTICE OF FILING OF FINAL REPORT
AND ACOUNT PURSUANT TO RULE 1019(5)(A)(ii)
OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE

PLEASE TAKE NOTICE that on August 24, 2012, the United States Bankruptcy Court for the District of Delaware entered the Order Converting Cases from Chapter 11 to Chapter 7 of the Bankruptcy Code [D.I. 1439] (the “Conversion Order”) whereby the jointly administered chapter 11 cases of the debtors (collectively, the Debtors”) were converted to cases under chapter 7 of title 11 of the United States Code, effective as of August 24, 2012.

PLEASE TAKE FURTHER NOTICE that, pursuant to the Conversion Order, and in accordance with Rule 1019(5)(A)(ii) of the Federal Rules of Bankruptcy Procedure, the Debtors hereby file their final report and account, attached hereto as Exhibit A.

Blank Rome, the trustee's law firm, has closed its escrow account, as you can see in the August monthly report, the last page, and the SCO bank accounts and credit cards are closed too.

So it's the beginning of a new chapter for an older and wiser SCO Group, which is going down slow. Maybe not wiser, since they still seem to hope to continue the lawsuit against IBM somehow.

Pretty soon, though, at this rate there will be nothing left of SCO but an old blues song.


  


SCO Files Final Chapter 11 Report in Bankruptcy, Files August MORs; Now It's Onward and Downward in Chapter 7 ~pj | 214 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
corrections here
Authored by: Tufty on Wednesday, September 26 2012 @ 02:00 AM EDT
Hint the title

---
Linux powered squirrel.

[ Reply to This | # ]

Off topic
Authored by: Tufty on Wednesday, September 26 2012 @ 02:01 AM EDT
Or even off tropic

---
Linux powered squirrel.

[ Reply to This | # ]

SCO Files Final Chapter 11 Report in Bankruptcy, Files August MORs; Now It's Onward and Downward in Chapter 7 ~pj
Authored by: Anonymous on Wednesday, September 26 2012 @ 02:01 AM EDT
"The August monthly report lists a total of $7,187.786 in
professional fees paid since the bankruptcy began, plus
$492,981 in expenses"

A sad day for US bankruptcy law!

[ Reply to This | # ]

News Picks
Authored by: Tufty on Wednesday, September 26 2012 @ 02:02 AM EDT
Read all about... the latest and greatest ... well maybe!

---
Linux powered squirrel.

[ Reply to This | # ]

comes documents
Authored by: Tufty on Wednesday, September 26 2012 @ 02:02 AM EDT
mine the pits

---
Linux powered squirrel.

[ Reply to This | # ]

Seung Ni Capital Partners
Authored by: Anonymous on Wednesday, September 26 2012 @ 03:27 AM EDT
> (Collateral Agent, ThinkAtomic) $2,248,218.11 (Secured)

Secured? With a concrete shoe at the bottom of the Delaware R?

[ Reply to This | # ]

Blank Rome owed half a million for what, exactly?
Authored by: Anonymous on Wednesday, September 26 2012 @ 03:28 AM EDT
Paying themselves a butchery fee for carving up the corpse?

Quis audits ipsos auditores?

[ Reply to This | # ]

To paraphrase Gotye..
Authored by: Albatross93 on Wednesday, September 26 2012 @ 03:56 AM EDT
Now you're just some bankrupt who used to be SCO.

[ Reply to This | # ]

I predict: They are Doomed, Doomed!
Authored by: Ian Al on Wednesday, September 26 2012 @ 04:17 AM EDT
Who said, 'Not again!'.

I have been predicting this for over ten years and none of you would listen to
me.

I don't get it. They always manage to get free in a single bound. It's going to
happen, somehow. Do you really imagine that the lawyers will end up with unpaid
bills?

Doomed-ish, then. Stick a fork in them: they're done. Take them out back and
shoot them.

See you all here, in ten year's time, then.

---
Regards
Ian Al
Software Patents: It's the disclosed functions in the patent, stupid!

[ Reply to This | # ]

Are there any UnXis customers on Groklaw?
Authored by: TAZ6416 on Wednesday, September 26 2012 @ 05:18 AM EDT
Just curious, what kind of support are you getting for your old SCO systems?
Are they pushing VM's now more than physical machines and is there any
development work going on that you know of or are they just treading water with
the old systems.

And of course if you want to leave them and migrate to Linux do they help or get
stroppy? ;)

[ Reply to This | # ]

SCO Chapter 7 - wow that was a long time coming :-)
Authored by: Anonymous on Wednesday, September 26 2012 @ 06:50 AM EDT
The END.

Silverwave not logged in.

[ Reply to This | # ]

Escrow account for Novell money
Authored by: Anonymous on Wednesday, September 26 2012 @ 06:56 AM EDT
Wasn't there meant to be some sort of escrow account set up to protect Novell's
royalty money that had been collected on their behalf?

Did Novell get any of this?

[ Reply to This | # ]

Has Cahn been knowingly trading while insolvent?
Authored by: tiger99 on Wednesday, September 26 2012 @ 08:13 AM EDT
These figures seem to say that is exactly what he has been doing. I don't know
about US law, but it would be a criminal offence in the UK.

[ Reply to This | # ]

Is Boies Schiller still on the hook? n/t
Authored by: jsoulejr on Wednesday, September 26 2012 @ 09:35 AM EDT
n/t

[ Reply to This | # ]

SCO Files Final Chapter 11 Report in Bankruptcy, Files August MORs; Now It's Onward and Downward in Chapter 7 ~pj
Authored by: GriffMG on Wednesday, September 26 2012 @ 10:49 AM EDT
Funny, Blank Rome can't even get the spelling right in their notice!

Acount -> Account



---
Keep B-) ing

[ Reply to This | # ]

What about that pizza guy
Authored by: JamesK on Wednesday, September 26 2012 @ 11:20 AM EDT
I seem to recall some mention of owing for pizza. Did the pizza guy get stiffed
too?

---
The following program contains immature subject matter. Viewer discretion is
advised.

[ Reply to This | # ]

What a Cahn job !
Authored by: Anonymous on Wednesday, September 26 2012 @ 12:07 PM EDT
What it was not worth draining the last drop of fees from the dead body of SCO ?

[ Reply to This | # ]

In many ways this is a sad story
Authored by: Anonymous on Wednesday, September 26 2012 @ 01:39 PM EDT

Laid off employees, a ruined product line, unpaid creditors...

All because management decided to gamble on being able to blackmail
IBM into buying them off. At least that's what it appears to have happened
as far as I can tell. If anyone (SCO insiders) is willing to provide us
documentable proof, well, we'd be really interested in seeing it.

After all, an NDA with a dead company is probably no longer enforceable.

Wayne
http://madhatter.ca

[ Reply to This | # ]

The Moral Crime of SCO's Bankruptcy
Authored by: russellphoto on Wednesday, September 26 2012 @ 02:07 PM EDT
And the really sad thing is the moral crime (no legal crime here at all) of this
bankruptcy. It's one thing to actually have a case and see it through. It's
another to have a hope of a case (SCO) and when the going get's tough lock up
your cash so NO ONE can get it. Then have a trustee appointed who is willing to
squander the remainder in the false hope of somehow bringing home the bacon.

The moral outrage at this long, drawn out march to finality is huge. These are
the cases that make you wonder at the state of Delaware and how their
legislators can sleep at night allowing these kind of bankruptcy laws to
continue.

(stepping off the soapbox -- your turn)

Russell

[ Reply to This | # ]

Will they finally open the kimono?
Authored by: Anonymous on Wednesday, September 26 2012 @ 02:53 PM EDT
All I really want to know is, will we FINALLY get to see the paper trails
leading through SCO to Microsoft? I remember PJ speculating about the
possibility back when the bankruptcy kicked off in the first place.

[ Reply to This | # ]

  • No - Authored by: Anonymous on Wednesday, September 26 2012 @ 05:30 PM EDT
Which staff have stayed this long?
Authored by: IMANAL_TOO on Wednesday, September 26 2012 @ 02:56 PM EDT
This makes me wonder, which staff have stayed this long? Which came and which
left? Why, in both cases. The uncertainty, the bad press, the promises from
senior staff must have made SCO a very tough aquarium to live in. Has this
generated an increase in staff turnover or has the turnover remained the same
since the years before Darl McBride's entry. It must be a bizarre situation to
be in, for this long.




---
______
IMANAL


.

[ Reply to This | # ]

$83K cash on hand?
Authored by: Anonymous on Wednesday, September 26 2012 @ 03:24 PM EDT
So, who's going to fund the expenses of the case against IBM? Blank Rome?
Cahn? Yarro?

Or is BSF not only going to be working for free, but eating the expenses as
well?

Or are they going to try to win the IBM case without having to spend any money
on expenses?

The disconnect with reality just keeps getting larger and larger...

MSS2

[ Reply to This | # ]

... fear of having to pay Novell ....??
Authored by: Anonymous on Wednesday, September 26 2012 @ 03:36 PM EDT
Don't you mean "... adamant refusal to pay Novell ..."?
I mean, they started this whole thing because they wanted to kill Linux, which
allegedly infringed UNIX, which they claimed they owned, instead of it (UNIX)
being (at least partially) owned by Novell; but in any case, t$COg didn't own
any of it.

[ Reply to This | # ]

Alia Shahbaz's back pay
Authored by: Yossarian on Wednesday, September 26 2012 @ 06:08 PM EDT
>is owed back pay and severance and wanted the
>bankruptcy court to help her

I wonder if the good, religious, people who decided not
to pay Ms. Shahbaz have ever read Deuteronomy 24,14:
"Do not take advantage of a hired worker who is poor and
needy, whether that worker is a fellow Israelite or a
foreigner residing in one of your towns. Pay them their wages
each day before sunset, because they are poor and are counting
on it."

[ Reply to This | # ]

  • Jeremiah 22:13 - Authored by: Anonymous on Wednesday, September 26 2012 @ 08:01 PM EDT
"Remember when Ralph Yarro got all the SCO stock from Canopy"
Authored by: Yossarian on Wednesday, September 26 2012 @ 06:12 PM EDT
When that happened I claimed that Canopy realized what a risk,
to stock holders SCO has become. Canopy did what a rational
person does when he finds himself stuck in a hole -
"Stop Digging".

[ Reply to This | # ]

That is what bankruptcy is for
Authored by: Anonymous on Wednesday, September 26 2012 @ 06:22 PM EDT
Solvent companies enter bankruptcy to escape legal action, and lawyers and
judges then assist them to become insolvent.

[ Reply to This | # ]

Gloria Estefan said it best
Authored by: Anonymous on Friday, September 28 2012 @ 04:42 PM EDT
And when you go, I won’t miss you at all
And when you go, I’ll be having a ball
you will see Thoughts of you, won’t ever cross my mind
It’s the truth, don’t mean to be unkind

[ Reply to This | # ]

Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )