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SCO's Chapter 11 Trustee Moves to Settle AutoZone
Thursday, October 22 2009 @ 11:46 PM EDT

Edward Cahn, the Chapter 11 Trustee now running SCO Group, wants to settle and be done with SCO v. AutoZone. He sees no value in further litigation. So he has filed a motion asking the court to approve the settlement he has worked out with AutoZone.

Can you believe it took this long? It's been in the Top Ten Stupidest Cases of All Time Hall of Fame since 2004. Evidently Mr. Cahn does not share Darl's gambling ways, nor his zeal to punish SCO customers who switched from Unix to Linux. SCO put AutoZone through an experience it never deserved, but it looks like all the horses are heading home to the barn. At last.

The motive mentioned is the desire to save the costs of further litigation. That's how much the Chapter 11 Trustee thinks of SCO's chances, I'd opine. On page 5 of the motion, it says that further litigation "would likely yield minimal additional benefit to creditors".

So now we know why Darl is so hopping mad and trying to put together a posse of revolting shareholders. Their dreams of second homes from the litigation lottery are turning into mere mirages in the desert. That's not Mr. Cahn's fault. It's called Reality. The end of this saga was obvious from day one.

The filings:

10/22/2009 - 935 - Motion to Approve Settlement Agreement With AutoZone (Attachments: # 1 Notice # 2 Exhibit A - Under Seal# 3 Exhibit B # 4 Certificate of Service) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. Hearing scheduled for 11/20/2009 at 02:00 PM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 11/10/2009. (Attachments: # 1 Notice # 2 Exhibit A - Under Seal# 3 Exhibit B# 4 Certificate of Service) (Fatell, Bonnie) (Entered: 10/22/2009)

10/22/2009 - 936 Motion to File Under Seal Exhibit A to the Trustee's Motion to Approve Settlement Agreement With AutoZone (related document(s) 935 ) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. Hearing scheduled for 11/20/2009 at 02:00 PM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 11/10/2009. (Attachments: # 1 Notice # 2 Exhibit A # 3 Certificate of Service) (Fatell, Bonnie) (Entered: 10/22/2009)

The request to keep the terms confidential is intriguing. It cites a case where the debtor was allowed to allow a company to sell some of its stuff cheaply, and they court said it could be kept confidential, because otherwise the debtor might find it hard to enter into negotiations with others at a higher rate.

What might that tell you about this settlement? Me too. Look at page 6 of the motion to seal, the last sentence in paragraph 21:

Additionally, disclosure of the terms contained in the Settlement Agreement could hamper the Trustee's ability to maximize the value of the Debtors' estates through prolonged litigation.
My, but that dream dies hard. Or maybe he's just saying that because it's his job to try to maximize the estates' value, and who knows what the future might bring. But AutoZone, if there are no objections by November 10, will be free of SCO forever, and I am glad for them.

If SCO walks away with nothing much to show for its expense for this litigation, Darl may just decide to object, and then who knows what all might leak out? The motion says that the settlement agreement is conditioned on the court ordering the terms be confidential, as well as any portions of the transcripts of the hearings, so if Darl wishes to fight it, he has an easy method.

However, as the motion points out, this is an exercise of the Chapter 11 Trustee's business judgment, and if Darl could compete on *that* battlefield, the judge wouldn't have replaced him. So I expect the settlement to be approved, with maybe some huffing and puffing and I'll-blow-your-house-down drama first.

There will be a hearing on this motion on November 20th at 2 PM, but the terms are apparently going to be filed under seal, and the motion asks that any portions of the hearing dealing with the terms also be held in camera, so even if you went to the hearing, you'd be asked to leave. Still, I hope some of you can go.

This part of the SCO saga is winding down, and it feels mighty fine.


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