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Hearing over - Minutes Posted - Eyewitnesses Reports
Wednesday, December 05 2007 @ 11:29 AM EST

The hearing is over. The minutes are now on Pacer:
255 - Filed & Entered: 12/05/2007
Minute Entry
Docket Text: Minutes of Hearing held on: 12/05/2007 Subject: OMNIBUS, Bidding Procedures and CFO (con't from 11/16). (vCal Hearing ID (57216)). (related document(s) [253]) (SS, ) Additional attachment(s) added on 12/5/2007 (SS, ).

Until we can read the orders, or hopefully get any eyewitness reports, we can't know what "Order signed" means, since the order could say, yes, no, or have adjustments to what we have earlier seen. So we just have to be patient. You can go down the list, though, by comparing numbers with the agenda. It was snowing, I'm told, in Delaware, and that may affect eyewitnesses attending. And you'll see the sign in sheet is sparsely populated this time too.

For example, number 1 on the agenda is the Mesirow application, and you can see on the minutes that the CNO (certificate of no objection) was filed and the order signed. That is straightforward. But on item 5, about Boies Schiller's retention, it says "Certificate of counsel to be submitted". Ditto on the Cattleback motion. So, we'll have to wait on those for either eyewitness reports or the transcript.

And here they are. First from MikeD:

Today was a very quick hearing. It started late and was done in about 20 minutes. Mr. O'Neil and another lawyer appeared for SCO. Adam Lewis and another lawyers were there for Novell. Mr. McMahon attended. There were 3 Groklaw members there.

Mr. O'Neil spoke first.

#1 Motion for Expansion of Mesirow
Matter resolved. Order enter. Approved by Judge Gross.

#2 Motion to Use Bank Accounts, etc.
Matters resolved with Trustee. New order entered which was approved by the judge.

#3 Motion to approve employment of Tanner LC.
Resolved. New form of order presented and approved by the Judge. Mr. McMahon spoke and noted that there were $9,000 worth of expenses pre-petition which he wanted on the record.

#4 Motion of Al Petrofsky.
Some confusion as to what exactly Mr. Petrofsky was asking. Mr. O'Neil reviewed this document and stated he has no objection. Mr. Petrosfsky was on the phone and was given the opportunity to speak. He agreed with the order. He will be able to e-file documents. The Judge reminded him that he could only file motions and documents on his own behalf - not for anyone else.

#5 Motion to approve Boies, Schiller.
Agreed that a new proposed form of order would be presented to the Trustee. If he agrees, the order will be forthcoming. Mr. McMahon spoke of a standard of review. Any recovery or transaction fees will be reviewed and subject to the jurisdiction of the court.

#6 Motion to hire CFO solutions.
Resolved and approved by the Judge.

#7 Motion on Incipient Controversy.
If you were hoping for fireworks, there were none.

Mr. O'Neill spoke of how this was an unusual filing. The judge was grinning at this statement. Mr. O'Neill spoke of a novation agreement. Ocean's fees will be paid by the subsidiary.

Mr. Lewis spoke to this issue and said Novell did not necessarily oppose this sale. They simply did not have enough information to make a judgment on it. Since the last hearing they have apparently been given a number of documents which helped them come to some conclusions.

Mr. Lewis said something along the lines that this was not a big deal and they did not intend to tie up the court with it.

I'm not sure whether it was Mr. O'Neill or Mr. Lewis who said it - but proceeds of this sale will be put back into the estate.

The Judge said that Novell retained the rights to object to facts contained in submissions or any testimony that may be brought up in the future.

That was it. There was no mention of future hearings which leads me to believe we are done until after the Holidays.

And UD's report:

I knew something was up at the hearing this morning when SCO only had two lawyers and nobody else there. It was in stark contrast to the 22 lawyers present for the trial for whoever it was whose trial ran over into the 10:00 time slot.

The parties all came to agreements about today's outstanding issues before trial. The Incipient Controversy is no longer a controversy to the court. The net proceeds of the sale will go to SCO and the fees to Ocean Tomo will be paid by Cattleback (the difference being....???). Mr O'Neill said he thinks they have filled in all the gaps with a Novation Agreement to be filed.

Mr. Lewis said the he was not necessarily opposing the sale, but had not known enough about the sale before. He doesn't want to stand in the way of the sale and now thinks that the sale price seems to be fair. Judge Gross tells him that even though he (Lewis) isn't objecting now, he isn't waiving his right to object down the line if something doesn't seem right.

That was it. No fireworks. All the fancy lawyering took place out of view. Bummer....

So you can get an idea of what this is all saying, here's what Novation Agreement means:

NOVATION AGREEMENT - A legal instrument executed by (a) the contractor (transferor), (b) the successor in interest (transferee), and (c) the [?] by which, among other things, the transferor guarantees performance of the contract, the transferee assumes all obligations under the contract, and the purchaser recognizes the transfer of the contract and related assets.

More here. So I gather there will be one filed, and when everyone sees the details, they can still object. So despite there being no obvious fireworks, I gather this story isn't over yet, but it's getting there, subject to further scrutiny as documents are filed.

And that is now confirmed in our third eyewitness report:

It started late, and ended quickly. Jamie O'Neill first spoke on behalf of SCO, informing the court that basically all matters had been agreed to, and he provided the Court with a folder of all the proposed orders.

The discussions of the items was as follows:

1. Mesirow issue agreed to.

2. Cash managment issues agreed to.

3. Tanner LLC issue agreed to. J McMahon,UST, indicated that SCO would be submitting a supplemental declaration about some prepetition work.

4. Al Petrofsky submitting electronically agreed to. The Court clarified and he confirmed that means on behalf of himself only, and not for others.

5. BSF issues agreed to, provided a revised supplemental declaration is expected later today. UST highlighted mostly the standards of review for fees, 328A for IBM/Novell, 330 for all others.

6. CFO Solutions issue agreed to.

7. Objections to incipient controversy no longer an issue. Mutiple references to a "novation" agreement. Net proceeds of sale to be remitted to SCO. Some prepetition fees to Ocean Tomo to be paid by the subsidiary. Mr. Lewis for Novell spoke of several supplemental declarations so far that have filled in the gaps. He is satisfied that at least they have had questions answered, but they have not conceeded or concurred with anything, and are not waiving their rights with regard to objecting to any of the facts portrayed in those answers.

The light snow falling made the ride home a little bit treacherous, but gave a nice feeling that winter is approaching....

So, time will tell whether it gets approved or not. Hopefully before anything gets approved, someone will find out for sure if this is a Unix patent or not and whether or not Microsoft has a license to it. One would hope to avoid any nasty surprises down the road, with the new buyer alleging that it is too a Unix patent, and pointing to a Microsoft license as "proof" and then suing Linux end users for patent infringement. I know. Far-fetched. But is it beyond the scope of what we've seen so far in SCOland? Some folks don't seem to care if a lawsuit can be won, only if it can be begun.

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