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The Chapter 11 Trustee's First Act: Wants to Hire a Lawyer
Tuesday, September 01 2009 @ 12:13 AM EDT

SCO's new Chapter 11 trustee, Edward N. Cahn, would like to hire a law firm, Blank Rome. Well, honestly speaking, wouldn't *you* want a lawyer, if you were chosen to decide what to do next with the SCO Group?

What would their duties include?
a) Collect and reduce to money the property of the estate for which such Trustee serves, and close such estate as expeditiously as is compatible with the best interests of parties in interest;...

d) Investigate the acts, conduct, assets, liabilities, financial condition and financial affairs of the Debtors, the operation of the Debtors' business and desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a plan;...

j) Assist the Chapter 11 Trustee in the analysis of third party litigation and liquidation of assets in accordance with the Bankruptcy Code and the Local Rules;

k) As soon a practicable, file a statement of any investigation conducted, including any fact ascertained pertaining to fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity in the management of the affairs of the Debtors, or to a cause of action available to the estate;

Ahem. The application says that Blank Rome will represent the Chapter 11 trustee and no other entity and provide litigation services to the trustee. Like if he wanted to sue anybody for fraud or dishonesty after the investigation. And of course the firm prepares a plan of reorganization or recommends conversion to Chapter 7 or dismissal of the case.

Here are all the day's filings:

08/31/2009 - 901 - Interim Application for Compensation for Services and Reimbursement of Expenses of Tanner LC, as Accountants to the Debtors, for the Period from August 1, 2009 through August 31, 2009 (Twentieth Interim) Filed by Tanner LC. Objections due by 9/21/2009. (Attachments: # 1 Notice # 2 Exhibit A # 3 Certificate of Service with Service List) (Makowski, Kathleen) (Entered: 08/31/2009)

08/31/2009 - 902 - Application to Employ Blank Rome LLP as Counsel to the Chapter 11 Trustee Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. Hearing scheduled for 9/24/2009 at 02:00 PM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 9/17/2009. (Attachments: # 1 Notice # 2 Exhibit A # 3 Proposed Form of Order # 4 Certificate of Service) (Fatell, Bonnie) (Entered: 08/31/2009)

08/31/2009 - 903 - Certification of Counsel Regarding Omnibus Hearing Dates Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Fatell, Bonnie) (Entered: 08/31/2009)

Mr. Cahn might take a look at Tanner's bills, for a start. Their 20th bill is in the queue. Then there is that Skyline Cowboy thingie. Hiring detectives to harass people? Any shills hired to smear people? How about that private deal with Boies Schiller they made without asking the bankruptcy court? Um, do reorganization plans, at least one of which the bankruptcy judge said lacked evidence of being real, count? And the bonuses. Let me count the ways.

Just dreaming. He's going to be looking for ways to get money into the estate, not restoring moral balance to the universe. So, his question will be, is there any money in it if he pursues anybody about anything? Can the estate sue anybody profitably?

Uh oh.

I hope he's not from SCO's planet in his thinking on what is a rational lawsuit.

Interestingly, an exhibit attached to the motion lists these potential parties in interest:

Cattleback Holdings
Me, Inc.
Me Software, Inc.
Novell Inc.
Red Hat Inc.
SCO Global Holdings
Sun Microsystems
The SCO Group
The gang's all here.

Note that there is also a schedule for hearings going forward:

September 24, 2009 - 2 PM
October 21, 2009 - 3 PM
November 20, 2009 - 2 PM
December 22, 2009 - 2 PM
Isn't that depressing? From that schedule, SCO seems eternally stuck in bankruptcy as solidly as if its feet were frozen in an iceflow which is drifting slowly absolutely nowhere in particular. But of course, should the trustee decide there is no viable business, it could also end very fast. You noticed that one of the tasks the law firm has is to turn assets into money. SCO owes Novell some money, millions. Speaking of which, does SCO have enough money to last until December? To pay Novell even? Maybe if it holds an auction fast. Or if its prince will come with a fat wallet and fantasies of a litigation lottery. Somebody has to do something if they want to pay Blank Rome. The September 24th hearing will no doubt rubber stamp this law firm.

At least the chapter 11 trustee has hit the ground running. The court ordered he be appointed on July 27th, and things are already starting to hum. Incidentally, Blank Rome has some lawyers who were recently chosen as outstanding in their field. They have a press release about it on their website:

Chambers USA 2009 Recognizes More Blank Rome Attorneys and Practices

June 2009

Blank Rome is pleased to announce that our practice groups and attorneys have again increased their rankings in the 2009 edition of Chambers USA: America’s Leading Lawyers for Business. Chambers USA recognized our practice groups in 12 categories this year, and also ranked more than 35 of our attorneys as “leaders in their fields.”

We received five national practice rankings (including three #1 rankings) in Investment Funds: Venture Capital and in four categories of Transportation (Shipping). In addition, we were recognized in both Pennsylvania and Delaware in Bankruptcy/Restructuring. In Pennsylvania, we achieved six practice rankings (including three #1 rankings), including Banking & Finance, Corporate/M&A & Private Equity, Labor & Employment, Litigation, and Real Estate. Blank Rome attorneys ranked among this year’s best are:...


Thomas E. Biron
Bonnie Glantz Fatell
Regina Stango Kelbon
Michael B. Schaedle
Joel Charles Shapiro
Raymond Shapiro

Ms. Glantz Fatell is a partner with the firm, and obviously she must be very competent in the field of bankruptcy/restructuring. She will be the principal attorney from Blank Rome representing the trustee. She signed the verified statement attached to the application.

If you'd like to see an example where a trustee sued folks, here's a recent case in the news showing just how ugly it can get, a case ironically involving Blank Rome. When businesses go south, people start suing, rightly or wrongly. It just is that way. Nowadays, they even sue the lawyers. Which is why it's like the song says, God bless the child that's got his own.

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