I'd say SCO may be off to a shaky start with the trustee in its bankruptcy. Their lawyer just told the court that he had assured the trustee that SCO needed money for lower-level accounting help, not for a CFO. Then SCO hired a new CFO, Ken Nielsen. Here's the 8K SEC filing which provides details about his background and also the financial arrangement. He's via CFO Solutions, "a provider of outsourced financial services" and CFO gets $45 per hour and Nielsen gets $105/hr. You can read the lawyer's words in this hearing transcript. SCO is nothing if not bold. Why, at this rate, adding in the amounts for all the lawyers and bankruptcy advisers, and the raise and bonus for Ryan Tibbitts, I'd say SCO has hit the ground running and should be able to efficiently run through all of Novell's converted monies in no time flat. Let's see:
Ryan Tibbits raise from $160,000 per year to $210,000 = $50,000
Ryan Tibbits prepetition bonus = $50,000 net (with SCO caring for taxes)
New CFO if he works 40-hr week for a year (105+45/hr) = 312,000
New accountants = $20,000 (with more to be requested)
Prepetition bonuses under incentive plan = $30,000
Berger Silverman = $425,000
Dorsey & Whitney = $100,000
EPIQ - $25,000
- Mesirow Financial = $35,000
- Pachulsky Stang Ziehl and Jones = $75,000.
Then there's the new retirement policy and the new insurance. That has to be added in. They're paying utilities of course, because instead of doing a Chapter 7, they want to keep the lights on, so add that on, along with the prepetition wages and bonuses and incentives. Darl alone. Boies Schiller will want to be paid too. But even leaving all of that out, SCO's managed to spend, or projects to spend, a cool $1,122,000 right there. They only filed for Chapter 11 reorganization on September 14th. That's pretty impressive.
Guys, we can do this. Just a little more effort, a little more creative thinking, keep the trustee lulled, and I believe SCO can ace Novell completely.
Joking, yes, but here's a bit from the 8k:
Change in Directors or Principal Officers
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Appointment of Ken R. Nielsen
On September 27, 2007, The SCO Group, Inc. (the "Company") appointed Mr. Ken R. Nielsen as its interim Chief Financial Officer, effective October 1, 2007....
The Company will compensate Mr. Nielsen at a rate of $105 per hour. Mr. Nielsen is working at the Company through CFO Solutions, a provider of outsourced financial services. The Company will compensate CFO Solutions at a rate of $45 per hour that Mr. Nielsen works....
Promotion of Sandeep Gupta
On September 28, 2007, Sandeep Gupta was promoted to President, SCO Operations. As a result of this promotion, Mr. Gupta's base salary was increased from $165,000 per year to $200,000 per year, subject to approval by the United States Bankruptcy Court.
Here's the hearing transcript, beginning on page 33, with SCO's lawyer, Arthur Spector, making these representations:
8 MR. SPECTOR: Finally, Your Honor, we have this
9 unfortunate motion, which we didn't expect to have to bring,
10 but when, sometimes things happen you don't expect. And one
11 of, and that is we've had a rash of mid-level and lower-level
12 accounting personnel leave. Now that's bad enough anyway,
13 even in the, even in the throes of an intended reduction in
14 force. It's because we have a year-end coming October 31st.
15 This is a public company, there's quite a lot of accounting
16 work that has to be done to prepare the proper regulatory
17 filings and the, and the like. And so the company is at a
18 crucial stage that it needs to get people, bodies behind the
19 desk to do the work. So the company, well, this would
20 normally be an ordinary course situation we wouldn't bring to
21 Your Honor, but - - they'd just go out and hire new people.
22 But they can't hire new people in that kind of a hurry. They
23 have to go to an accounting - - strike that. A - -
24 THE COURT: A temporary - -
25 MR. SPECTOR: - - a temporary agency.
1 THE COURT: Accountemps.
2 MR. SPECTOR: Accountemps. And get, and do it that
3 way. And I inquired of the client, and they didn't usually
4 do this. And I said, Well, haven't you done this? No, we
5 haven't. Well, I said, well in the utmost of caution, belt
6 and suspenders fashion, we'll come and bring this before Your
7 Honor, and get this approved formally. And that's what this
8 motion is about. You know, Mr. McMahon, on behalf of the US
9 Trustee had legitimate concerns about are we hiring the CFO
10 or other higher paid employees, and the answer to that, after
11 consultation with the client, is no. These are line
12 employees, non-management. He wanted that assurance, and if
13 he wants the names of the people being replaced, I'm not sure
14 if we've gotten to that level, but I suppose it can be
15 gotten, we just don't have it this early this morning.
I wonder how long it will take Mr. Spector to catch on.
Darl likes sports metaphors, so I'll just say that my new nickname for the SCOfolks is The Amazings. Don't forget the hearing is on Friday at 1:30 on whether Berger Silverman gets appointed as SCO's counsel.