Well. What a surprise. SCO has withdrawn its Motion for an Order Establishing Sale and Bid Procedures, Approving Form of Asset Purchase Agreement, etc. I think they figured out the cavalry was on the top of the ridge, ready to fight to block that motion. IBM shredded SCO's motion like a chimp on Prozac, and then Novell put out the lights. How many times do these two have to file oppositions to SCO's reorganization schemes before SCO actually follows through with one that can be approved? Who knows? It's a joke to me already, so we might as well just laugh. IBM and Novell probably don't find it so amusing, having to pay lawyers to respond to this kind of thing.
So another hearing bites the dust. If you were planning to attend on March 16, don't go. It's off. SCO withdrew the motion without prejudice, and it's in bold type, so they may just be licking their wounds and circling around to try another day.
Here are the filings:
03/12/2009 - 717 - Notice of Withdrawal of Debtors' Motion for an Order
(I) (A) Establishing Sale and Bid Procedures, (B) Approving Form of
Asset Purchase Agreement, and (C) Approving the Form and Manner of
Notice of Sale; and (II) Approving (A) Sale of Certain Assets Free and
Clear of Interests and (B) Assumption and Assignment of Executory
Contracts and Unexpired Leases (related document(s) 695 ) Filed by The
SCO Group, Inc.. (Attachments: # 1 Affidavit of Service and Service
List) (Makowski, Kathleen) (Entered: 03/12/2009)
Here is the SCO motion that it just withdrew and you can find the exhibits here. What does the withdrawal mean? I have no idea. I can only guess. Maybe there's no buyer panting in the wings yet? Or the hoped-for stalking horse broke its leg? Or SCO can't figure out how to answer the objections IBM and Novell raised? Maybe the new representative from the US Trustee's Office had a little chat with SCO? Time will clarify for us what is happening. I learned long ago to relax.
03/12/2009 - 718 - HEARING CANCELLED. Notice of Agenda of Matters
Scheduled for Hearing. Filed by The SCO Group, Inc.. Hearing scheduled
for 3/16/2009 at 02:00 PM at US Bankruptcy Court, 824 Market St., 6th
Fl., Courtroom #3, Wilmington, Delaware. (Attachments: # 1 Affidavit of
Service and Service List) (Makowski, Kathleen) (Entered: 03/12/2009)
How's this for a suggestion? How about setting the date for the auction *after* SCO gets a plan approved, should that ever happen, so it knows what it can auction? What? Too logical?
IBM's opening remarks in its opposition says it all:
1. The Motion and attached documents do not answer basic questions about the Debtors' proposed asset sale: What is the urgency to approve the terms of the asset sale, particularly if the Debtors are not presently entertaining any proposed bids on the assets? What products and services are included in the assets proposed to be sold? is the proposed procedure the right one? How will the bidder protections be applied? The burden should not be on creditors or this Court to search for the facts and justifications for a sale. Rather, the Debtors must set forth this and other required information before even bid procedures may be approved.
2. The Motion (i) lacks a justification for approving the proposed asset sale now, (ii) lacks adequate information describing the assets to be sold or the proposed sale process; (iii) lacks adequate information about the proposed method for choosing a "stalking horse" bidder; and (iv) lacks adequate information about the proposed bidding procedures. The Motion, form of asset purchase agreement, proposed bidding procedures and sale notice are all deficient in themselves and should not be approved. (See Section A below.) The proposed bidder protections are inadequately described and misleading. (See Section B below.) Finally, the Debtors' proposed sale notice fails to identify the products and services comprising the assets being sold, and it fails to provide an accurate description of the terms and conditions of the proposed asset sale. (See Section C below.)
3. For these reasons, as explained more fully below, this Court should deny the Motion.
To fund the Amended Plan, the Debtors propose a combination of continued business operations and possible auction sale of some of their assets. The Amended Plan proposes to pay most creditors in full quickly, but considerably stretches out payment of one of the two classes of general unsecured creditors: the class of general unsecured creditors, such as Novell, International Business Machines ("IBM") and Red Hat, against whom the SCO is in prepetition litigation. As certain pivotal plan terms reflect, the Debtors themselves recognize that they may be unable to pay these litigation creditors in full, so the Amended Plan proposes to pay them in new SCO stock if cash to pay them is in insufficient. In the meantime, however, SCO's current shareholders will be able to keep their existing stock.
Clearly, the Debtors' ability to fund the Amended Plan is crucial to all creditors, but especially the litigation creditors. Hence, a thorough analysis of the Debtors' business plan, the proposed auction, and the claims the Debtors may have to pay, is indispensable to help creditors decide whether to vote for the Amended Plan. Yet, the Amended Disclosure Statement fails to provide the kind of meaningful information that would enable creditors to judge the Debtors' prospects of meeting their commitments under the Amended Plan. For this reason, the Court should deny approval of the Amended Disclosure Statement. The Court should also disapprove the Amended Disclosure Statement because the Amended Plan is unconfirmable on its face as violating the absolute priority rule in permitting existing shareholders to retain their stock even though its terms explicitly anticipate that litigation creditors may not be paid in full. The problem, in plain English, as I see it from the two objections is that SCO would like to sue the World and Its Dog and yet, when it loses, not have to pay damages except with Monopoly money, so to speak.
Update: I can't resist. Our own Steve Martin has been inspired by SCO's withdrawal of this motion to burst into song:
Ya put yer first plan in, While the plan hasn't yet been pulled, just the auction, he's enjoying some creative license.
Ya take yer first plan out,
Ya put yer next plan in,
and ya talk it all about.
There is no confirmation
so you pull it all back out,
and that's what you're all about.