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IBM Makes an Appearance... Represented by One of the Main Authors of the Bankruptcy Code - Bert Young Leaves; Nasdaq News
Friday, September 28 2007 @ 04:29 PM EDT

Of course, it had to happen. IBM makes an appearance [PDF] In the Matter of The SCO Group, et al, Debtors, informing the court that they'd like to be sent all notices by the court. The local attorney in Delaware is Laurie Selber Silverstein, of Potter Anderson & Corroon. But IBM's Cravath lawyer is Richard B. Levin. He was one of the principal authors of the Bankruptcy Code and the Bankruptcy Reform Act of 1978.

: )

I'd say that might just indicate the level of IBM's interest in this bankruptcy.

And I'd guess you might be interested in this press release from SCO, "The SCO Group Announces Ken Nielsen as Interim Financial Officer:" "Mr. Nielsen replaces Bert Young who has left The SCO Group to pursue new opportunities." So, hmm. SCO lost approximately half of the finance department, and now it's buh-bye to Bert. Lands sakes. Would that mean there's no one at SCO who can recall what happened to all that "tainted money" that needs to be traced to ensure Novell gets its money at last? And just when SCO needs these people the most, they up and quit [or get fired]. Just kidding. Bert will be serving SCO as a consultant for the next six months, according to SCO's 8K just filed. SCO has a date with Nasdaq to beg for a stay of execution from delisting on November 8 for non-compliance of Nasdaq Marketplace Rules 4300 and IM-4300 (that's about filing for bankruptcy, according to SCO's 8K). They'll stay listed until a final decision is reached as far as the first notice is concerned. However, today SCO also announced they received another Nasdaq notice about Rule 4310(c)(4), regarding "bid price deficiency".

The bio I link to tells us this about Mr. Levin:

Richard Levin is a partner in the Cravath, Swaine & Moore LLP Restructuring and Insolvency Department. Rich's practice focuses on corporate restructuring, insolvency and bankruptcy issues. He represents financially troubled corporate debtors, acquirers of troubled companies and special creditors in both out-of-court workouts and Chapter 11 reorganizations. Rich has significant experience guiding debtor and non-debtor clients through insolvency restructuring or reorganization, structuring and negotiating complex deals involving insolvent companies and, where necessary, directing litigation in support of the negotiations.

Rich, who served as counsel to a subcommittee of the House Judiciary Committee from 1975 to 1978, was one of the principal authors of the Bankruptcy Code and the Bankruptcy Reform Act of 1978. He serves as Vice Chair of the National Bankruptcy Conference. He is also a member of the Board of Trustees and a Fellow of the American College of Bankruptcy and a member of the faculty of the Federal Judicial Center. Rich received an S.B. from the Massachusetts Institute of Technology in 1972, and a J.D. from Yale Law School in 1975, where he was an Editor of the Yale Law Journal.

He probably will get it right, don't you think? I've seen SCO puffery bragging that one of its attorneys is a retired judge. Pish posh. Judges merely interpret the code to make sure the wording is followed and enforced. Mr. Levin helped to write the code. Here is Judge Kevin Gross's bio, by the way.

There is also a notice [PDF] from Kelly Beaudin Stapleton, United States Trustee:

As of the date of this statement, a committee of unsecured creditors has not been appointed by the UNITED STATES TRUSTEE.

The reason given that no unsecured creditors' committee has been formed is because of "insufficient response to the United States Trustee communications/contact for service on the committeee." Those notices went out to the top 20 creditors, IIRC. So, Microsoft doesn't wish to sit on that committee? No interest in helping out?

I'd suggest we all stay tuned. It's still very early in the process. You'll notice on Notice of Commencement of Chapter 11 Bankruptcy Cases, Meeting of Creditors and Fixing of Certain Dates [PDF] that the date for that meeting is October 18, and it says that a notice of the deadline to file a proof of claim will be sent out later. And on page two, it mentions in the subhead "Commencement of Cases" that certain documents are also available now on SCO's claims agent, Epiq Bankruptcy Solutions. They work for SCO, of course, so I am not sure how that impacts on any privacy concerns you may have. But it's free. Or you can obtain them from the court. Or just follow along with us here. But for anything that matters, you need the documents directly from the court itself.

That same page two explains Chapter 11 to the creditors, and we can learn from it too:

COMMENCEMENT OF CASES. Petitions for reorganization under chapter 11 of the Bankruptcy Code have been filed in this Court by the Debtors listed above, and orders for relief have been entered. You wil not receive notice of all documents filed in these cases. All documents filed with the Court, including lists of the Debtors' property and debts, are available for inspection at the Office of the Clerk of the Bankruptcy Court. In addition, such documents may be available at www.deb.uscourts.gov. Certain documents are also available on the web site of the Debtors' claims agent, Epiq Bankptcy Solutions, LLC, at http://chapterl1.epiqsystems.com/SCO.

PURPOSE OF CHAPTER 11 FILING. Chapter 11 of the Bankruptcy Code enables a debtor to reorganize and/or liquidate pursuant to a plan. A plan is not effective unless approved by the Court at a confirmation hearing. Creditors will be given notice concerning any plan, or in the event the case is dismissed or converted to another chapter of the Bankruptcy Code. The Debtors will remain in possession of their property and will continue to operate any business unless a trustee is appointed.

CREDITORS MAY NOT TAKE CERTAIN ACTIONS. A creditor is anyone to whom a debtor owes money or property. Under the Bankruptcy Code, a debtor is granted certain protection against creditors. Common examples of prohibited actions by creditors are contacting a debtor to demand repayment, taking action against a debtor to collect money owed to creditors or to take property of a debtor, and starting or continuing foreclosure actions or repossessions. If unauthorized actions are taken by a creditor against a debtor, the Court may penalize that creditor. A creditor who is considering taking action against a debtor or the property of a debtor should review § 362 of the Bankruptcy Code and may wish to seek legal advice. The staff of the Clerk of the Bankrptcy Court are not permitted to give legal advice.

MEETING OF CREDITORS. The Debtors' representative, as specified in Rule 9001(5) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), is required to appear at the meeting of creditors on the date and at the place set forth above for the purpose of being examined under oath. Attendance by creditors at the meeting is welcomed, but not required. At the meeting, the creditors may examine the Debtors and transact such other business as may properly come before the meeting. The meeting may be continued or adjourned from time to time by notice at the meeting, without further written notice to the creditors.

CLAIMS. Schedules of creditors will be filed pursuant to Bankruptcy Rule 1007. Any creditor holding a scheduled claim which is not listed as disputed, contingent, or unliquidated as to amount may, but is not required to, file a proof of claim in these cases. Creditors whose claims are not scheduled or whose claims are listed as disputed, contingent, or unliquidated as to amount and who desire to participate in the cases or share in any distrbution must file their proofs of claim. A creditor who desires to rely on the schedule of creditors has the responsibilty for determining that the claim is listed accurately. Separate notice of the deadlines to fie proofs of claim and proof of claim forms wil be provided to the Debtors' known creditors. Proof of claim forms also are available in the clerk's offce of any bankruptcy court. Proof of claim forms are also available from the Court's web site at www.deb.uscours.gov. Epiq Bankruptcy Solutions, LLC is the claims agent in these cases and can provide a proof of claim form if you cannot obtain one from your local bankruptcy court....

The press release from SCO about the new Nasdaq notice reads in pertinent part like this:

The SCO Group, Inc. (the "Company") (Nasdaq: SCOX - News), a leading provider of UNIX® software technology and mobile services, today announced it received a Nasdaq Staff Deficiency Letter on September 25, 2007 indicating that the Company fails to comply with the minimum bid price requirement for continued listing set forth in Marketplace Rule 4310(c)(4). The letter gives the Company notice that the Company's bid price of its common stock has closed under $1.00 for the last 30 business days.

Pursuant to Nasdaq Marketplace Rule 4310(c)(8)(D), the Company has been provided an initial period of 180 calendar days, or until March 24, 2008, to regain compliance. The 180 day period relates exclusively to the bid price deficiency. The Company may be delisted during the 180 day period for failure to maintain compliance with any other listing requirements for which it is currently on notice or which occurs during this period. The letter states the Nasdaq staff will provide written notification that the Company has achieved compliance with Rule 4310(c)(4) if at any time before March 24, 2008, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, although the letter also states that the Nasdaq staff has the discretion to require compliance for a period in excess of 10 consecutive business days, but generally no more than 20 consecutive business days, under certain circumstances.

If the Company cannot demonstrate compliance with Rule 4310(c)(4) by March 24, 2008, the Nasdaq staff will determine whether the Company meets The Nasdaq Capital Market initial listing criteria set forth in Nasdaq Marketplace Rule 4310(c), except for the bid price requirement. If the Company meets the initial listing criteria, the Nasdaq staff will notify the Company that it has been granted an additional 180 calendar day compliance period. If the Company is not eligible for an additional compliance period, the Nasdaq staff will provide written notice that the Company's securities will be delisted. At that time, the Company may appeal the Nasdaq staff's determination to delist its securities to a Listing Qualifications Panel.

The Company also has received a hearing date of November 8th, 2007 regarding non-compliance of Nasdaq Marketplace Rules 4300 and IM-4300. As such, the Company's common stock will not be delisted on September 27, 2007 as previously indicated by Nasdaq. Instead, the delisting action has been stayed, pending a final written decision by the Nasdaq Listing Qualifications Panel.

Here are some more docket entries to bring us up to date:

56 - Filed & Entered: 09/21/2007
Terminated: 09/24/2007
Motion to Appear pro hac vice (B)
Docket Text: Motion to Appear pro hac vice of Grace E. Robson. Receipt Number 148983, Filed by The SCO Group, Inc.. (Jones, Laura Davis)

57 - Filed & Entered: 09/24/2007
Order Setting Omnibus Hearing Dates
Docket Text: Order Setting Omnibus Hearing Dates. All hearings will be held at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware (Related document(s)[55] ). Omnibus Hearings scheduled for 10/5/2007 at 01:30 PM., 11/6/2007 at 02:00 PM., 12/5/2007 at 10:00 AM., 1/8/2008 at 10:00 AM., 2/5/2008 at 10:00 AM. Signed on 9/21/2007. (LCN, )

58 - Filed & Entered: 09/24/2007
Order on Motion to Appear pro hac vice
Docket Text: Order Granting Motion for Admission pro hac vice of Grace E. Robson. (Related Doc # [56]) Order Signed on 9/24/2007. (LCN, )

59 - Filed & Entered: 09/24/2007
Transcript
Docket Text: Transcript of Hearing held on September 18, 2007 before the Honorable Kevin Gross. (related document(s)[15] ) (BJM)

60 - Filed & Entered: 09/24/2007
Affidavit/Declaration of Service
Docket Text: Affidavit/Declaration of Service (and Service List) Regarding Order Setting Omnibus Hearing Dates (related document(s)[57] ) Filed by The SCO Group, Inc.. (Werkheiser, Rachel)

61 - Filed & Entered: 09/24/2007
Affidavit/Declaration of Service
Docket Text: Affidavit/Declaration of Service (and Service List) Regarding Order Granting Motion for Admission Pro Hac Vice of Grace E. Robson (related document(s)[58] ) Filed by The SCO Group, Inc.. (Werkheiser, Rachel)

62 - Filed & Entered: 09/25/2007
Terminated: 09/26/2007
Motion to Appear pro hac vice (B) Docket Text: Motion to Appear pro hac vice - David Melaugh. Receipt Number 149010, Filed by Novell, Inc.. (Nestor, Michael)

63 - Filed & Entered: 09/26/2007
Order on Motion to Appear pro hac vice
Docket Text: Order Granting Motion for Admission pro hac vice of David Melaugh. (Related Doc # [62]) Order Signed on 9/25/2007. (LCN, )

64 - Filed & Entered: 09/26/2007
Notice of Meeting of Creditors/Commencement of Case (B)
Docket Text: Notice of Meeting of Creditors/Commencement of Case Filed by The SCO Group, Inc.. Hearing scheduled for 10/18/2007 at 10:00 AM at US District Court, 844 King St., Room 2112, Wilmington, Delaware. (Werkheiser, Rachel)

65 - Filed & Entered: 09/26/2007
Affidavit/Declaration of Service
Docket Text: Affidavit/Declaration of Service by Epiq Bankruptcy Solutions, LLC, Regarding Notice of Commencement of Chapter 11 Bankruptcy Cases, Meeting of Creditors and Fixing of Certain Dates (related document(s)[64] ) Filed by The SCO Group, Inc.. (Attachments: # (1) Exhibit A) (Werkheiser, Rachel)

66 - Filed & Entered: 09/27/2007
Notice of Appearance(B)
Docket Text: Notice of Appearance Filed by Tarrant County. (Weller, Helen)

67 - Filed & Entered: 09/28/2007
Statement Committee Has Not Been Appointed
Docket Text: Statement That Unsecured Creditors' Committee Has Not Been Appointed Filed by United States Trustee. (McMahon Jr., Joseph)

68 - Filed & Entered: 09/28/2007
Notice of Service
Docket Text: Notice of Service /Request for Service of Papers Filed by IBM Corp.. (Attachments: # (1) Certificate of Service) (Silverstein, Laurie)


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