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IBM Serves a Subpoena Duces Tecum on KPMG
Tuesday, November 01 2005 @ 09:30 PM EST

IBM has subpoenaed KPMG [PDF] (a subpoena duces tecum, the kind of subpoena that asks for documents to be produced), and asks them to turn over all Novell-Santa Cruz Unix transaction documents regarding the September 19, 1995 Asset Purchase Agreement, as well as all Santa-Cruz-Caldera Unix transaction documents, namely all documents related to the Agreement and Plan of Reorganization, dated August 1, 2000 and amended on September 13, 2000, December 12, 2000, and February 9, 2001 between oldSCO, Caldera Systems, Inc. and Caldera International, Inc.

SCO, as you'll recall, is refusing to turn over certain documents to IBM on the ground that they are privileged, so IBM obviously put on their thinking cap and figured out who else might have them. Like SCO, they are playing beat the clock, as the deadline for fact discovery looms. So, although they have a discovery motion regarding SCO's privilege log, at the same time KPMG is being asked to supply the documents about the two transactions. And by the way, just in case any documents ended up in Sun Microsystem's hands, when it bought Tarantella, IBM defines the term "Santa Cruz" to mean and include, "collectively and/or individually, The Santa Cruz Operation, Inc., Tarantella, Inc., or Sun Microsystems, Inc., and all its directors, officers, authorized agents, employees, consultants, attorneys, representatives, direct and indirect, contractors, and/or all other persons acting on behalf of The Santa Cruz Operation, Inc., Tarantella, Inc., or Sun Microsystems, Inc."

And look what KPMG is being asked to produce, and then tell me that IBM isn't out for blood. It also may give us a hint why SCO doesn't want to turn its privilege log documents over. After the revelations or the allegations in the Canopy-Yarro litigation, it seems natural that IBM would be interested in the financial details of the various transactions. That is one way to determine exactly who transfered what to whom. Or if they ever did. For example, in asking for documents related to the Asset Purchase Agreement of 1995 between Novell and oldSCO, when Unix assets transfered, they want to see such things as the bill of sale and the allocation of the purchase price. Obviously, lawyers on both sides gave opinion letters, so they'd like to see them also.

Here's the complete list:

*******************************

Documents to be Produced

Novell-Santa Cruz Unix Transaction Documents.

1. All documents in your possession, custody, or control that refer, reflect or relate to the Asset Purchase Agreement, dated September 19, 1995 ("APA"), by and between Novell, Inc. ("Novell") and Santa Cruz (defined below), including, without limitation, any and all transactional. due diligence, or financial documents related to the sale or transfer of assets or stock in connection with that transaction together with any reports, analyses, valuations, appraisals, or opinions in your possession, custody, or control related to the transaction.

2. Any and all transactional, due diligence, or financial documents concerning the sale or transfer of Unix or Unix-related assets from Novell to Santa Cruz.

3. The following documents specifically referred to in the APA:

a. Allocation of the Purchase Price (Section 1.2(c)),
b. Copies of the financial statements delivered pursuant to Section 2.3,
c. Bill of sale,
d. Operating Agreement between Novell and SCO (Section 5.1(c)),
e. Legal opinion of legal counsel of Buyer (Section 5.2(c)),
f. Legal opinion of legal counsel of Seller (Section 5.3(c)).

4. The final report, including supporting exhibits, and all work papers supporting the allocation of the purchase price paid by Santa Cruz to Novell for the 1995 purchase of Unix or Unix related assets, including but not limited to the following:

a. Drafts
b. Market research
c. Historical financial information for the Unix business,
d. Financial projections for the Unix business,
e. Notes,
f. Client interviews,
g. Discount rate support and analysis,
h. Licensing agreements of the intellectual property or any licensing agreements used in the allocation,
i. Any other information used to allocate the purchase price of the acquisition for financial reporting purposes.

5. The final report and all documents supporting any impairment analysis or valuation of intangible assets concerning Unix or Unix-related assets, from 1995 to 2001.

6. Any and all documents, communications, or correspondence, whether formal or informal, concerning the foregoing topics.

Santa Cruz-Caldera Unix Transaction Documents

1. All documents in your possession, custody, or control that refer, reflect or relate to the Agreement and Plan of Reorganization, dated August 1, 2000 and amended on September 13, 2000, December 12, 2000, and February 9, 2001 (the "Agreement and Plan") by and between Santa Cruz, Caldera Systems, Inc., and Caldera International, Inc., including, without limitation, any and all transactional, due diligence, or financial documents related to the sale or transfer of assets in connection with that transaction together with any reports, analyses, valuations, appraisals, or opinions in your possession, custody, or control related to the transaction.

2. Any and all transactional, due diligence, or financial documents concerning the sale or transfer of Unix or Unix-related assets from Santa Cruz to Caldera (defined below).

3. The following documents, specifically referred to in the Agreement and Plan:

a. Attachment A to the Third Amendment (or the amended Exhibit 1.4(b)),
b. Exhibit 1.4(c)(i)(B),
c. Attachment B to the Third Amendment (or the amended Exhibit 13.15A),
d. Attachment C to the Third Amendment (or the amended Exhibit 13.15D),
e. Attachment D to the Third Amendment (or the amended Exhibit 13.15D),
f. Exhibit 13.15C,
g. Attachment E to the Third Amendment (or the amended Exhibit 13.15E).

4. The final report, including the supporting exhibits, and all work papers supporting the Impairment/Valuation Analysis, incorporated in Caldera's October 31, 2001 10K filing with the United States Securities and Exchange Commission, concerning the Server and Professional Services Group acquired from Santa Cruz, including but not limited to the following:

a. Drafts,
b. Market research
c. Historical financial information for the Unix business,
d. Financial projections for the Unix business,
e. Notes,
f. Client interviews,
g. Discount rate support and analysis,
h. Guideline or company research or analysis,
i. Any other information used to allocate the purchase price of the acquisition for financial reporting purposes.

5. The final report and all documents supporting any impairment analysis or valuation of intangible assets concerning Unix or Unix-related assets, from 2001 to the present.

6. Any and all documents, communications, or correspondence, whether formal or informal, concerning the foregoing topics.


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