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SCO Asks the Bankruptcy Court to Let It Destroy Its Business Records ~ pj Updated
Sunday, February 03 2013 @ 03:45 PM EST

SCO, now calling itself TSG, has just filed a motion [PDF] with the bankruptcy court in Delaware asking it to authorize "the abandonment, disposal, and/or destruction of certain surplus, obsolete, non-core or burdensome, property, including, without limitation, shelving, convention materials, telecommunications and computer equipment, accounting and sales documents, and business records."

Ah. "And business recrods." Burdensome to whom? To whom would SCO's business records be burdensome? Not me. I hereby volunteer to pay for storage for those records, in order to preserve them. Obsolete how? Does the bankruptcy court know that SCO has a petition [PDF] before the US District Court in Utah asking the court to reopen SCO's litigation with IBM?

The excuse is money. They are paying to store them, poor dears, as of January 31, I gather, since they ask the court to authorize payments nunc pro tunc back to that date. Either that, or there's more to this story than you can find in the motion. They also ask the court to let it not inform all its creditors about this. Heh heh. Imagine how messy it could get if they all showed up asking for a computer or shelving.

Here is the motion:

01/31/2013 - 1474 - Motion to Approve // Motion for Entry of an Order Authorizing Abandonment, Disposal, and/or Destruction of Property and Payment of Related Expenses Nunc Pro Tunc to January 31, 2013 Filed by Edward N. Cahn, Chapter 7 Trustee. Hearing scheduled for 2/22/2013 at 10:00 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 2/15/2013. (Attachments: # 1 Notice # 2 Proposed Form of Order # 3 Certificate of Service) (Tarr, Stanley) (Entered: 01/31/2013)

Here's how the motion puts it:
The Chapter 7 Trustee currently pays monthly fees to maintain three (3) rental storage units in Utah (the "Storage Units") in which the Obsolete Property is stored. Because the Debtors' estates have no proposed future operations and the Obsolete Property has no independent value to these estates, there is no need to keep the Obsolete Property. The continuing cost to store the Obsolete Property far exceeds any benefit of maintaining the Obsolete Property. The Trustee has determined that disposing of the Obsolete Property will further efforts to eliminate unnecessary costs. The Trustee is exploring various means of disposing of the Obsolete Property, including, without limitation, hiring a former employee of the Debtors on an hourly basis to determine whether certain of the Obsolete Property contains confidential information that may require special disposal. Accordingly, the Trustee respectfully requests authority to dispose of any Obsolete Property as the Trustee deems reasonable and appropriate.
I wonder who they are thinking of hiring? Darl McBride?

Groklaw will pay to house the business records to guarantee their preservation. I am absolutely serious. We'll take them off their hands.

If the court accepted that offer, what then? First Darl paws through them and has a fun time destroying everything the least bit evidenciary. Then an unfortunate fire at a certain storage building in Utah?

Kidding. Sorta. But the offer is real. I mean, if they don't trust them in my hands, at least put them on eBay and make some money for the estate. We'd all buy mementos, I'm sure.

[ Update: A reader has another suggestion: "The first thing that came to mind for me when I read this entry were the duplex scanners from Fujitsu. On the lower end they have scanners such as the ScanSnap iX500 (formerly S1500) series and on the higher end they have a number of models of production/bulk type sheet-fed scanners. Any of these would begin to make short work of digitizing boxes of business records and would make the eventual storage costs no more expensive than the cost of a redundant digital storage system (which itself would still need to be backed up, of course)." - End Update.]

All you need, SCO argues, to dispose of all this evidence -- I mean obsolete property -- is a good business reason. Like it costs money and the estate doesn't have any:

9. The Court should apply the business judgment standard in reviewing a trustee’s decision to abandon property that is either of inconsequential value or burdensome to the Debtors’ estates. See In re Slack, 290 B.R. 282, 284 (Bankr. D. N.J. 2003) (“The trustee’s power to abandon property is discretionary... The court only needs to find the trustee made: 1) a business judgment; 2) in good faith; 3) upon some reasonable basis; and 4) within the trustee’s scope of authority.”)

10. Section 363(b)(1) of the Bankruptcy Code further provides that “[t]he trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate.” 11 U.S.C. § 363(b)(1). Under Bankruptcy Code section 363(b)(1), courts should generally approve a non-ordinary course transaction if the proposed use of the estate assets is within a trustee’s reasonable business judgment. See e.g., In re Martin, 91 F.3d 389, 395 (3d. Cir. 1996) (stating that the court generally defers to a trustee’s judgment so long as there is a 133091.01601/40205119v.2 legitimate business justification); In re Montgomery Ward Holding Corp., 242 B.R. 147, 153 (D. Del. 1999) (noting that courts have applied the “sound business purpose” test to evaluate motions brought pursuant to section 363(b)); In re Delaware & Hudson R.R. Co., 124 B.R. 169,175-76 (D. Del. 1991) (same).

11. Bankruptcy Rule 6007 provides, in pertinent part, that “[u]nless otherwise directed by the court, the trustee ... shall give notice of a proposed abandonment or disposition of property to the United States trustee, all creditors, indenture trustees, and committees elected pursuant to §705 or appointed pursuant to §1102 of the Code.” Fed. R. Bankr. P. 6007(a) (emphasis added).

12. As a result of the sale of substantially all of the Debtors’ assets during the administration of the Debtors’ chapter 11 cases, these chapter 7 estates no longer need to retain the Obsolete Property in their possession, custody or control. Accordingly, abandonment, disposal and/or destruction of the Obsolete Property are warranted under Bankruptcy Code sections 363 and 554(a).

Here's the request not to have to tell the creditors about this:
14. Finally, due to the nature of the Obsolete Property sought to be discarded, i.e. obsolete equipment and old business records, the Trustee requests that this Court modify the service requirement of Bankruptcy Rule 6007 to eliminate service on all of the Debtors’ creditors. Rather, the Trustee proposes that service of this Motion on the Office of the United States Trustee, any party filing a request for notice pursuant to Bankruptcy Rule 2002 and any parties known by the Trustee who may have an interest in any of the Obsolete Property that is the subject of this Motion is sufficient notice.
Aside from all the other things that make this motion peculiar to me, there is this: SCO still has litigation against IBM that it keeps petitioning the court in Utah to resurrect. Here's the latest petition, filed in June:
1107 Filed & Entered: 06/14/2012 Request to Submit for Decision Docket Text: REQUEST to Submit for Decision re [1095] MOTION to Reopen Case filed by Plaintiff SCO Group. (Attachments: # (1) Exhibit A - TSG Order Granting IBM Stay Modification)(Hatch, Brent)
What if it finally does reopen the case? How obsolete are those business records then? But here's what I remember. When Caldera sued Microsoft, and the parties settled in a super secret agreement, the same thing happened -- they petitioned the court to let it destroy the legal records. Sun opposed and got some of them, but almost all of that valuable history became toilet paper. And the secrecy was for naught, because the details all came out eventually in a later litigations, Novell v. Microsoft, the antitrust dispute over WordPerfect, still ongoing, and Novell v. Canopy, Canopy being once the parent company of Caldera, later calling itself the SCO Group and now calling its sad little self TSG. One of the terms of the agreement, long before the toilet paper caper in 2003, was destruction of papers, and it was Microsoft demanding it.

In one of those Small World moments, I noticed that it was attorney named Paul Grewal handling Sun's efforts to get the Caldera documents. I checked, and sure enough, it's the same Paul Grewal who is now a Magistrate Judge, currently assigned to the Apple v. Samsung litigations in California. In a previous life, he worked for Day Case, later merged with Howry, and the firm had Sun Microsystems as a client back then. Here's a filing [PDF] from Sun v. Microsoft, so you can verify. That case was heard by Judge Frederick Motz, who is the presiding judge in Novell v. Microsoft's antitrust case over WordPerfect.

And here's the bit that will blow your mind. Guess who represented against Blizzard? Case Beer's Paul Grewal. Here's a video of him talking about the case, prior to its resolution. No wonder he can reference Star Trek. Of course, Harvard Business Review won't let you watch unless you have $150 (universities pay half that), speaking of Aaron Swartz and the need for open access to research materials.

Anyway, you know how it is in the bankruptcy court in Delaware. Are they inclined to say yes to SCO, would you say? Me too. So this probably will happen and those business records will go through a shredder and that will be that. Here's a case where a journalist who tried to get some records from AIG lost, the appeals court ruling that the records are not government property, so the public doesn't get to see them. In short, while my offer is real, I don't expect it to be accepted.

Here's SCO's petition to reopen the case in Utah, as text:

Brent O. Hatch (5715)
Mark F. James (5295)
[address, phone, fax]

David Boies (admitted pro hac vice)
Robert Silver (admitted pro hac vice)
Edward Normand (admitted pro hac vice)
[address, phone, fax]

Stuart Singer (admitted pro hac vice)
[address, phone, fax]

Counsel for The SCO Group, Inc.


THE SCO GROUP, INC., by and through the
Chapter 11 Trustee in Bankruptcy, Edward N.







Civil No.: 2:03-CV-00294-DN

Honorable David Nuffer

Pursuant to Local Rule 7-3, Plaintiff/Counterclaim-Defendant, The SCO Group, Inc. (“SCO”) respectfully submits this Request to Submit for Decision, requesting the Court to rule on SCO’s pending Motion to Reopen the Case (the “Motion”) in light of the recent order lifting the stay of IBM’s counterclaims by the bankruptcy court presiding over SCO’s Chapter 11 proceedings (the “Bankruptcy Court”). Where IBM agreed in its opposition to the Motion that this Court “should reopen the case when the stay has been lifted as to IBM’s counterclaims” and stipulated in the Bankruptcy Court that “IBM shall not oppose the reopening of the Utah Action,” SCO respectfully submits that the Motion should be granted forthwith.


1. On November 4, 2011, SCO filed its Motion to Reopen the Case (Docket No. 1095) in order to proceed with its remaining unfair competition and tortious interference claims. Those claims, which the Chapter 11 Trustee overseeing SCO’s bankruptcy estate deems meritorious, are the only remaining assets of the estate.

2. On November 21, 2011, Defendant/Counterclaim-Plaintiff International Business Machines Corporation (“IBM”) filed its opposition to the Motion. (Docket No. 1100.) Even though the Bankruptcy Code had automatically stayed all of IBM’s counterclaims against SCO without disturbing SCO’s right to pursue its claims against IBM, IBM opposed the Motion on the grounds that litigating SCO’s claims without IBM’s counterclaims “would be inefficient and fundamentally unfair.” (Id. at 1.)

3. Accordingly, IBM asserted that the Court “should reopen the case when the stay has been lifted as to IBM’s counterclaims.” (Id. at 6 (emphasis in original).) In fact, IBM argued for an order “providing that this case shall be reopened within 5 days of the filing of a


notice (by any party) that the stay of IBM’s counterclaims has been lifted.” (Id. at 14 (emphasis added).) SCO hereby provides such notice.

4. On November 28, 2011, Judge Waddoups1 scheduled a hearing on the Motion for April 18, 2012. (Docket No. 1101.) Judge Benson subsequently moved the hearing date to April 23, 2012. (Docket No. 1105.)

5. On December 8, 2011, SCO filed its Reply Memorandum in Support of Its Motion to Reopen the Case. (Docket No. 1102.) The Motion was thenceforth ripe for adjudication.

6. On February 16, 2012, while the April 23, 2012 hearing was still pending, SCO and IBM stipulated in SCO’s bankruptcy proceedings to modify the automatic stay of IBM’s counterclaims so as to permit IBM to “defend the Utah action and prosecute its Counterclaims against SCO.” (Ex. A at 4.) As part of that stipulation, IBM also agreed that “IBM shall not oppose the reopening of the Utah Action.” (Ex. A at 5, ¶ 4 (emphasis added).) On February 17, 2012, the Bankruptcy Court entered an order approving the stipulation and modifying the automatic stay “as set forth” in the stipulation. (Id. at 1.)

7. On April 2, 2012, following the transfer of the hearing from Judge Benson’s calendar to this Court’s calendar, the Court vacated the April 23, 2012 hearing.



Because SCO’s Motion to Reopen the Case has been pending since December 8, 2011, and was originally set for a hearing to be held on April 18, 2012, SCO respectfully requests that the Court submit the Motion for a decision, pursuant to Local Rule 7-3.

In addition, because IBM agreed that the Court should “reopen the case when the stay has been lifted as to IBM’s counterclaims” and argued for an order “providing that this case shall be reopened within 5 days of the filing of a notice (by any party) that the stay of IBM’s counterclaims has been lifted,” SCO respectfully asks the Court to grant SCO’s Motion forthwith and proceed with the adjudication of the unresolved summary judgment motions in this case, which have been pending since 2006. Indeed, because IBM secured the lifting of the automatic stay on its counterclaims in the Bankruptcy Court by agreeing “not [to] oppose the reopening of the Utah Action,” the Motion should be deemed to be unopposed.

Should the Court grant the Motion, SCO respectfully submits that the Court would benefit from oral argument on the unresolved summary judgment motions and respectfully requests that the Court schedule such argument. In addition, insofar as the Court would benefit from supplemental briefing regarding any changes in the law relevant to the unresolved summary judgment motions, SCO remains prepared to provide such briefing at the Court’s direction.


DATED this 14th day of June, 2012.

By: /s/ Brent O. Hatch
Brent O. Hatch
Mark F. James

David Boies
Robert Silver
Stuart H. Singer
Edward Normand

Counsel for The SCO Group, Inc.

1 On November 9, 2011, this case was reassigned to District Judge Clark Waddoups following District Judge Tena Campbell’s recusal (Docket No. 1099); on December 9, 2011, the case was in turn reassigned to District Judge David Sam following Judge Waddoup’s recusal (Docket No. 1103); on December 14, 2011, the case was again reassigned, this time to District Judge Dee Benson, following Judge Sam’s recusal (Docket No. 1104); and on March 31, 2012, following the appointment of this Court to the District Court bench, the case was reassigned to this Court (Docket No. 1106).


If I were working on this case for SCO, not that I ever would, and if the lawyers asked me what I thought was going on, I'd tell them that the court is trying to help us not get hit with sanctions for bringing a frivolous case. I mean, the same court already ruled that Novell owns the copyrights SCO was using to sue over, so what in the world is the point?

Maybe SCO now agrees with me, and so it is asking to dump the now-"obsolete" records. But historians would seriously like to see all of that. This was a history-making adventure SCO set off on, backed by Microsoft and Sun money. It's computer history, and those records might just show some interesting details that we don't yet know for sure.

Then again, knowing SCOfolk, maybe not.


SCO Asks the Bankruptcy Court to Let It Destroy Its Business Records ~ pj Updated | 223 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
SCO Asks the Bankruptcy Court to Let It Destroy Its Business Records ~ pj
Authored by: Anonymous on Sunday, February 03 2013 @ 04:04 PM EST
Let me be the first to ask...

What are their lawyers on and where can I get some?

(Yes, this is cliched, but if it's not applicable here, then

[ Reply to This | # ]

Cost for the motion against the storage cost?
Authored by: whoever57 on Sunday, February 03 2013 @ 04:25 PM EST
How many years of storage would be paid by the cost of preparing this motion?

[ Reply to This | # ]

SCO Asks the Bankruptcy Court to Let It Destroy Its Business Records ~ pj
Authored by: rsi on Sunday, February 03 2013 @ 04:40 PM EST
What would it take to file a motion on behalf of Groklaw in the court? IANAL,
but I would encourage PJ and Groklaw's attorney to act immediately on this
motion. If you need financial support to pay for the legal fees, I'm sure it
will come to you easily!

I cannot write here what came out of my mouth when I read this news! The
arrogance of this so-called, but virtually dead, "company" continues
to shock me!!!


[ Reply to This | # ]

Gene Quinn - A Brilliant Parody of DRM
Authored by: Anonymous on Sunday, February 03 2013 @ 05:03 PM EST
This article in Forbes about Gene Quinn is hilarious. He tried to make an anti-copy/paste thing, apparently unaware that they're ridiculous, they don't work, and they do little more than annoy the non-tech savvy. Of course, he's not smart enough to bypass it or something, so it must look great to him. Now he's mumbling about how maybe a "plugin" would work better. Ahahahahahahahaha.

[ Reply to This | # ]

SCO Asks the Bankruptcy Court to Let It Destroy Its Business Records ~ Of course.
Authored by: SilverWave on Sunday, February 03 2013 @ 05:42 PM EST

...not as surprise.

RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Maxim 1 of successful piracy: Pillage, _then_ burn.
Authored by: Anonomous on Sunday, February 03 2013 @ 06:10 PM EST
SCOG is guano crazy enough to request and receive permission to burn evidence,
then, after burning the evidence, accuse IBM of conspiracy to despoil evidence
because they did not object.

Seriously, though, IBM has standing to object to this, and will be remiss if
they do not. They probably will never need any of the evidence contained in the
stored documentation, but they should not appear via their silence to concur
with its destruction.


[ Reply to This | # ]

Corrections Thread
Authored by: bugstomper on Sunday, February 03 2013 @ 06:17 PM EST
Please summarize in the Title box error->correction or s/error/correction/ to
make it easy to scan see what needs to be corrected and to avoid duplication of

[ Reply to This | # ]

Off Topic threads
Authored by: bugstomper on Sunday, February 03 2013 @ 06:32 PM EST
Please stay off topic in these threads. Use HTML Formatted mode to make your
links nice and clickable.

[ Reply to This | # ]

News Picks Threads
Authored by: bugstomper on Sunday, February 03 2013 @ 06:35 PM EST
Please type the title of the News Picks article in the Title box of your
comment, and include the link to the article in HTML Formatted mode for the
convenience of the readers after the article has scrolled off the News Picks

Hint: Use Preview to check that your links are ok. Avoid a Geeklog
"feature" that posts long links broken by inserting line breaks in the
URL at punctuation points such as
<a href="

[ Reply to This | # ]

Comes transcripts here
Authored by: bugstomper on Sunday, February 03 2013 @ 06:36 PM EST
Please post your transcriptions of Comes exhibits here with full HTML markup but posted in Plain Old Text mode so PJ can copy and paste it

See the Comes Tracking Page to find and claim PDF files that still need to be transcribed.

[ Reply to This | # ]

"at least put them on eBay and make some money for the estate"
Authored by: Anonymous on Sunday, February 03 2013 @ 06:37 PM EST
Legally speaking, this is a valid idea.

Chapter 7 bankruptcy is supposed to be about selling
*everything* of any value that the debtor has and passing
the money to the creditors.

Is there any way for us to propose that to the court?

[ Reply to This | # ]

SCO Asks the Bankruptcy Court to Let It Destroy Its Business Records ~ pj
Authored by: Anonymous on Sunday, February 03 2013 @ 06:37 PM EST
I am willing to donate $100 to help Groklaw obtain, preserve and analyse these
business records, assuming they actually exist. Can you make a special donation
button to that end?

[ Reply to This | # ]

SCO Asks the Bankruptcy Court to Let It Destroy Its Business Records ~ pj
Authored by: sk43 on Sunday, February 03 2013 @ 07:00 PM EST
Technically, IBM should already have obtained all the discovery it needs, so SCO could argue that IBM has no further need for the business records. Red Hat, on the other hand, might be very interested, since it filed claims against SCO that are different from IBM (and, of course, it hasn't begun discovery).

But let us be realistic. What is it that Dan Lyons said? Oh yes, what SCO wants, SCO gets.

[ Reply to This | # ]

Re: Storage locker costs
Authored by: rps on Sunday, February 03 2013 @ 09:24 PM EST
I mean seriously .. how much does it cost to keep three storage lockers current?
I'm sure there are many of us here at Groklaw (myself included) that would be
willing to help purchase those records by paying that cost. Let the record show
that we made a public offer.

[ Reply to This | # ]

  • Re: Storage locker costs - Authored by: Anonymous on Monday, February 04 2013 @ 07:59 AM EST
    • Bodies? - Authored by: Anonymous on Tuesday, February 05 2013 @ 09:39 PM EST
Authored by: Anonymous on Sunday, February 03 2013 @ 11:09 PM EST
So, as I understand it, willful destruction of documents
relevant to a court case is spoliation of evidence, because
the party has an inherent duty to preserve evidence that's
reasonably relevant to expected court proceedings. The
opposing party can be entitled to sanctions, including
having the "missing" evidence be assumed to be as negative
as possible to the destroying party.

Assuming that's correct, what would the impact be if tSCOg
had some records that are or reasonably might be relevant to
their proposed SCO v IBM litigation in there?

Would this be held to be spoliation of evidence, because
they're willfully petitioning a court to let them destroy
records they know to be relevant (and making no such
disclosure to the bankruptcy court)? Or are they immune if
the court approves this (i.e. can they claim "look, a court
specifically told us we could destroy the records, therefore
there's no reasonable claim of spoliation)?

[ Reply to This | # ]

Authored by: OpenSourceFTW on Monday, February 04 2013 @ 01:37 AM EST
PJ, if there is any way to do this, DO IT.

If it is a matter of money, I'll kick in $10.

How do we go about this?

If you want a good reason for it, say we are doing it to preserve valuable Linux
history (which is the truth).

[ Reply to This | # ]

SCO Asks the Bankruptcy Court to Let It Destroy Its Business Records ~ pj
Authored by: BobDowling on Monday, February 04 2013 @ 09:37 AM EST

Page 4, paragraph 13:

The Chapter 7 Trustee currently pays monthly fees to maintain three (3) rental storage units in Utah (the “Storage Units”) in which the Obsolete Property is stored.

Would it be normal to quote the dollar amount at this point? I don't know the conventions of the relevant legal system but it surprises me that there's no figure given.

My suspicious mind suggests that this is because the court would laugh if it saw how (relatively) small the amount was.

[ Reply to This | # ]

Authored by: Anonymous on Monday, February 04 2013 @ 10:14 AM EST
to the very end (and beyond the end).

[ Reply to This | # ]

SCO Asks the Bankruptcy Court to Let It Destroy Its Business Records ~ pj
Authored by: Anonymous on Monday, February 04 2013 @ 11:19 AM EST
I'm sure that M$ will be most satisfied when this happens.

[ Reply to This | # ]

Backed by SUN money!?
Authored by: Anonymous on Monday, February 04 2013 @ 11:52 AM EST
When were they ever backed by SUN money?

I think I remember Oracle throwing them a bone at one point, but Sun?

[ Reply to This | # ]

Required to accept payment?
Authored by: Anonymous on Monday, February 04 2013 @ 01:08 PM EST
I presume that it would cost money to have the records disposed of. So if
another party such as Groklaw offerd to buy the records as assets, doesn't the
bankruptcy court have an obligation to take the money for the benefit of the
creditors? I can perhaps envisage and interesting auction.

[ Reply to This | # ]

Where is Darl working now?
Authored by: Anonymous on Monday, February 04 2013 @ 02:28 PM EST
"I wonder who they are thinking of hiring? Darl McBride?"

Ever since Stephen R. Covey passed away, I think Darl's position at Franklin Covey has been uncertain. In fact I'd be surprised if he was still there.

[ Reply to This | # ]

Can the Library of Congress intervene?
Authored by: Anonymous on Wednesday, February 06 2013 @ 10:24 AM EST
The SCO scam is of high relevance for the history of
computing, especially regarding the history of operating
systems and free software.

When historic records of such big importance would be
destroyed, can the Library of Congress intervene to get hold
of the documents?

[ Reply to This | # ]

Lets make an ofer to the estate to buy the records
Authored by: Anonymous on Saturday, February 09 2013 @ 03:22 PM EST
Lets make a collection and offer to buy the buisness records.
Since the company is bancrupt it, the records are of no value.

The estate must collect as much money as possible to pay it

[ Reply to This | # ]

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