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More Bills for SCO in the Bankruptcy - Will They Get Paid?
Sunday, July 27 2008 @ 09:30 AM EDT

Of course there are more bills in the bankruptcy. Berger Singerman and Mesirow want to be paid again. Berger Singerman would like $67,659.21, almost half of it for time spent on "Asset Disposition/Preservation" and most of the rest on "Plan and Disclosure Statement". That brings their total billings up to $322,723.79. So far, they say, of the previous balance due of $255,064.58, they've actually only been paid $58,901.25. Now, this could just be me, I suppose, but I think that would make me a little nervous. I think I'd be remembering SCO didn't pay for their pizza before filing for Chapter 11 bankruptcy protection, and folks love pizza. Lawyers? Not so much.

I gather it costs about $2,000 just to send Berger Singerman troops to a hearing in travel expenses alone. Preparation is on top of that, and time at the court is too.

The river of SCO gold appears to have slowed to a drip for Mesirow this time. Their bill is only for $452.70 and no expenses. Considering how mightily they've drunk from the SCO's trough up to now, the bill surprised me. Their total before this bill was $641,977.10. They don't tell us how much has been paid, just how much the court has allowed so far. One lawyer for Mesirow attended the June 16 hearing telephonically, and he charged $355 for .5 hours.

Remember that hearing? So that's most of the Mesirow bill right there. If you read the transcript, it was a mighty short appearance. It went like this:

THE CLERK: All rise.

THE COURT: Good afternoon, everyone. please be seated. Mr. O'Neill.

MR. O'NEILL: Good afternoon, Your Honor.

THE COURT: Good afternoon.

MR. O'NEILL: James O'Neill and Rachel Werkheiser appearing from the Pachulski firm on behalf of the debtors and also appearing with our co-counsel Arthur Spector, Dan Lampert, and Grace Robson in the matter.

THE COURT: It's good to have everyone back.

MR. O'NEILL: And the Court will also recall our client representatives, Darryl McBride and Ryan Tibbets (both phonetical), appearing today.

THE COURT: Good afternoon.

MR. O'NEILL: Your Honor, going down the agenda for today, I'm going to go a little bit our of order. Number 1 is continued. Number 3 on the agenda is our quarterly fee hearing.

THE COURT: Yes, I'm prepared to approve those.

MR. O'NEILL: Thank you, Your Honor, we do have a form of order, and I can hand it up the Court would like the order?

THE COURT: That would be fine, that would be helpful.

MR. O'NEILL: It has been circulated, and I don't believe there's any additional comments.

THE COURT: Excellent.

MR. O'NEILL: If I could hand that up to you now, Your Honor.

THE COURT: Thank you, thank you, Mr. O'Neill. Okay, fine.

MR. O'NEILL: Thank you very much, Your Honor. I'm going to turn the podium over to Mr. Spector who's going to handle number 2, our exclusivity extension request.

THE COURT: Yes, thank you.

MR. O'NEILL: Thank you.

THE COURT: Good afternoon.

MR. SPECTOR: Good afternoon, Your Honor. pleasure to be back.

THE COURT: Good to have you back.

MR. SPECTOR: Just for the record, I don't know if Mr. O'Neill mentioned that we have another participant by telephone.

THE COURT: We have a few on the telephone

MR. SPECTOR: Oh, okay.

THE COURT: Mr. Feltman, Mr. Singer, Mr. Robinson, and Mr. Petrofsky.

MR. SPECTOR: Thank you.

MR. FELTMAN (TELEPHONIC): And, Your Honor, this is Jim Feltman on behalf of Mesirow.


MR. FELTMAN (TELEPHONIC): If the issues, Your Honor, that pertain to Mesirow were addressed by the Court and if there's no other reason for me to continue, I would like to be excused.

THE COURT: You certainly may. Anyone else who is on the phone strictly for the fee applications may also be excused.

MR. FELTMAN (TELEPHONIC): Thank you, Your Honor.

There you go. $355. Some firms charge a minimum amount of time no matter what. Or maybe he hopped on the line early, to make sure he was on. Hopefully, SCO is finished with filing plans that have no hope of ever actually being approved. It's costly.

I can't help but notice on Berger Singerman's Exhibit A this item:

6/6/2008 AJS Conference Call with D.McBride, K. Nielsen, D. Lampert, G. Robson Regarding Status of SNCP Deal and Alternatives

Hmm . . . "and Alternatives". Don't tell me SCO's Prince Charming has hopped on his magic carpet and flown away. It could just mean they were hashing out what would happen if SCO owed $2 million compared to $20 million, of course. This was before the Utah order in SCO v. Novell, so they might just have been considering worst case/best case scenarios.

On 6/19 there's a mention of "formulations of plans" and some email regarding "drafting stand-alone plan" with Darl McBride and Ryan Tibbitts being asked to cooperate. Here is an explanation of what a "stand-alone plan" is. I gather it's where you file a reorganization plan that doesn't involve merging with anyone or being bought out or massive equity financing. You just figure out a way to survive by hook or by crook yourself. Uh oh. June also saw some activity regarding the Swiss arbitration. The firm sent a letter about "advance of Swiss tribunal fees". And a memo was drawn up about it and sent by email to Stuart Singer and Arthur Spector.

What? They thought SCO always pays what it owes? Novell could write a book.

Just kidding. It could be there are some new fees they just paid for SCO and are simply letting them know the amount. Either that or they really are getting nervous.

Mesirow's Exhibit C lists a discussion about an invoice from Merrill Datasite. Another bill outstanding? Bargaining over the price? It's not clear.

Like I say, if it were me, I'd be getting nervous. One of our eyewitnesses who attended a court hearing in the bankruptcy told me that he overheard a SCO lawyer, Arthur Spector, IIRC, tell one of the SCO executives during a break that representing SCO wasn't work. It was a labor of love. Would it not be funny if it turned out it actually was?

No need for nerves. SCO's prince will come. Spector told the court that they were working on a new deal and, if it happens, it would be better than the first one. So, assuming that was accurate, I'd say there's no call for them to be nervous. Snark.

Here are the filings:

518 - Filed & Entered: 07/22/2008
Certificate of No Objection
Docket Text: Certificate of No Objection Seventh Monthly Fee Application of Dorsey & Whitney for the Period April 1, 2008 through May 31, 2008 (related document(s)[509] ) Filed by Dorsey & Whitney LLP. (Schnabel, Eric)

519 - Filed & Entered: 07/23/2008
Application for Compensation
Docket Text: Interim Application for Compensation for Services and Reimbursement of Expenses, as Co-Counsel to the Debtors in Possession for the Period from June 1, 2008 through June 30, 2008 Filed by Berger Singerman, P.A.. Objections due by 8/12/2008. (Attachments: # (1) Notice # (2) Exhibit A # (3) Certificate of Service and Service List) (O'Neill, James)

520 - Filed & Entered: 07/24/2008
Application for Compensation
Docket Text: Monthly Application for Compensation and Reimbursement of Expenses for the Period from June 1, 2008 through June 30, 2008 Filed by Mesirow Financial Consulting, LLC. Objections due by 8/13/2008. (Attachments: # (1) Notice # (2) Exhibit A # (3) Exhibit B # (4) Exhibit C # (5) Certificate of Service and Service List) (O'Neill, James)

521 - Filed & Entered: 07/25/2008
Certificate of No Objection
Docket Text: Certificate of No Objection (No Order Required) Regarding Ninth Interim Application of Tanner LC for Compensation for Services and Reimbursement of Expenses as Accountants to the Debtors for the Period from June 1, 2008 through June 30, 2008 (related document(s)[511] ) Filed by The SCO Group, Inc.. (Attachments: # (1) Certificate of Service and Service List) (O'Neill, James)

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