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SCO's Lawyer's Bill Reveals SCO Approached IBM Re Unix Purchase: "No Interest"
Monday, November 19 2007 @ 11:26 PM EST

Today's filings are in. The most interesting is the bill that Berger, Singerman has filed, seeking to be paid for October. Note Exhibit A [PDF] in particular. I note it mentions on page 17 that the SCO lawyers met with "investment bankers" regarding the York APA. Perhaps we are getting warm now as to finding the missing guarantor. Groklaw's fudisbad notes something even more significant:
The real interesting stuff is in Exhibit A, page 17: "Memos regarding IBM as potential Unix purchase", "approach to IBM", page 18: "no interest".

That happened early in October, on the 8th. The complete entry reads like this:

10/8/2007 Confer, Memos regarding IBM as potential Unix purchase, confer with their counsel regarding same, parameters for negotiation, etc.; review letterhead regarding extension on agreement regarding patent rights, memo regarding same, etc.

So, IBM is not interested. No surprise there. SCO's lawyers checked again on the 15th and confirmed that there was "no interest". That ought to tell York a little bit about the actual value of what they are proposing to buy.

The 341 creditors meeting was on October 18th. Did Darl mention anything about selling the assets? He was directly asked about Me Inc, for example and the value of the Unix business. I see notations about the York term sheet as early as October 2. On October 3, there was a telephone conference with "M. Mullin on behalf of Trilogy" and two telephone conferences with "S. McNutt on behalf of York" followed by a phone call with Darl "comparing the two term sheets". On the 5th, they had a conference to figure out how to present the two offers to the board and which one to accept. So he knew at the 341 that a deal was in the works. The board had met on the 15th.

The notations are actually written in all caps, but I don't want you to think I'm yelling.

Page 18 mentions offers from York and "Shea." And that same page lists correspondence from "Herb Jackson at SCO". That wouldn't by any chance be the Herb Jackson of Renaissance Ventures back in the early days of SCO's litigation? Remember how he'd ask questions so very helpful to SCO at teleconferences, like this one in April of 2005? And remember the reports that Renaissance Ventures published predicting that IBM would surely buy SCO to make the litigation stop that I wrote about in September of 2003? One of the two reports said this:

At the end of SCO's 100-day fuse on SCO’s contractual cure, on June 13, 2003, SCO has the specific authority per the license agreement to revoke IBM’s AIX/UNIX licenses and require IBM to return or destroy all copies of its software products subject to the license. We believe the aforementioned contractual cure would be upheld by the court and mandated upon IBM, and would then wreak havoc on IBM's large corporate customers bringing serious injury to IBM's business reputation and customer relationships, unless the matter is settled prior to trial. We believe the business risk to IBM is too high. Therefore, we believe IBM will settle the case prior to trial.

As you can see, the prediction was inaccurate. Wildly so. But they're still trying, amazingly enough, in 2007, almost 2008. Some dreams die hard. Maybe that's why he ended up needing a job? Jackson is a common name. Having one myself, I caution that we can note this with interest, but it's not yet confirmed as being one and the same guy.

And what might this be on page 13 of Exhibit A?

10/24/2007 - AJS - Exchange e-mail correspondence with L. Holbrook of Nasdaq regarding appeal of delisting decision (0.1); reveiw

On the next page it mentions the patent sale, listing the names J. Basara and J. Handy. The former is with Ocean Tomo, the patent broker. And I see the SCO lawyers met with Jean Acheson and Darl McBride "to prepare for" the 341 meeting and then after it finished, they met again. There are 48 pages of items, so we can read them together.

And in another filing, Dorsey & Whitney has been approved to do corporate legal work for SCO, but the firm is not permitted to do anything in the bankruptcy. The modified order can be compared with the one they originally filed [PDF], if you want to see the differences, differences which I believe represent input from the US Trustee.

Here are all the documents:

220 - Filed & Entered: 11/19/2007
Order on Application to Employ
Docket Text: Order Granting Application for Approval of Employment of Dorsey & Whitney, LLP, as Special Counsel to the Debtors Nunc Pro Tunc to Petition Date. (Related Doc # [110]) Order Signed on 11/16/2007. (LCN, )

221 - Filed & Entered: 11/19/2007
Scheduling Order
Docket Text: Scheduling Order re Emergency Motion of Debtors for an Order (A) Approving Asset Purchase Agreement, (B) Etablishing Sale and Bidding Procedures, and (C) Approving the Form and Manner of Notice of Sale (Hearing December 5, 2007 @ 10:00 a.m.) (related document(s)[179], [202], [149], [180] ) Signed on 11/19/2007. (LJS, )

222 - Filed & Entered: 11/19/2007
Docket Text: Affidavit Disclosure Declaration of Ordinary Course Professional Kim and Cho Filed by The SCO Group, Inc.. (Attachments: # (1) Affidavit of Service and Service List) (O'Neill, James)

223 - Filed & Entered: 11/19/2007
Affidavit/Declaration of Service
Docket Text: Affidavit/Declaration of Service Regarding [Signed] Order Granting Application, Pursuant to 11 U.S.C. Section 327(e), 328 and 330, for Approval of Employment of Dorsey & Whitney, LLP, as Special Counsel to the Debtors Nunc Pro Tunc to Petition Date (related document(s)[220] ) Filed by The SCO Group, Inc.. (O'Neill, James)

224 - Filed & Entered: 11/19/2007
Application for Compensation
Docket Text: Interim Application for Compensation (Second) for Services and Reimbursement of Expenses as Co-Counsel to the Debtors in Possession for the Period from October 1, 2007 through October 31, 2007 Filed by Berger Singerman, P.A.. Objections due by 12/10/2007. (Attachments: # (1) Notice # (2) Exhibit A # (3) Certificate of Service and Service List) (Werkheiser, Rachel)

The Korean firm, Kim and Cho, is also referenced in the Berger Singerman bill on page 29. What trademark, I wonder, can it be that they are supposed to renew? And on that same page, there is another entry that I can't explain. On October 2, there was an exchange of emails with "P. Brower of U.S. Dep't of Labor responding to her questions; exchange e-mail correspondence with client to get the answers." On page 30, we see the remains of what appears to be a dispute with Day-Timers. And on pages 35 and 36 and 40, we see correspondence with the Zurich arbitration tribunal. Lots of research too on constructive trusts, lifting stay motions, German law, and Nasdaq rules. I also see several mentions of IPO litigation, such as on page 38. And remember Mr. Spector telling the judge how hard the APA between Novell and Santa Cruz was to understand? I think that might be because he spent exactly "0.30" reviewing it, as you can see on page 39.

If no objections are filed, 80 per cent of the fees ($175,516) and 100 per cent of the expenses ($5,177.33) can be paid without any hearing or order. The deadline for objections is December 10, but I don't expect any. These folks have indeed worked hard, and I am actually quite impressed at the amount of time they spent on legal research.

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