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An Offer of Arbitration Docs from Ryan Tibbitts & A Proposed Amended Schedule for Tomorrow
Tuesday, December 29 2009 @ 08:42 PM EST

SCO General Counsel Ryan Tibbitts has filed a Declaration [PDF] with the bankruptcy court in support of Edward Cahn's objection to SUSE's motion for relief from the automatic stay. SUSE would like to finish the Swiss arbitration, as you know, and SCO would like to keep it from going forward. Tibbitts offers to submit to the judge sealed materials from the arbitration that he claims give evidence that SUSE is not likely to prevail in what he claims is the "highly contested" arbitration.

Then again, he would say that. But if that were really the case, why would SUSE be so eager to get that show back on the road? I think the arbitration suddenly got "highly contested" in SCO's dreams only after the appeals court ruled that there must be a trial before a jury on copyright ownership. Prior to that, SCO was using the "moot" word, IIRC. Remember at the trial in SCO v. Novell in Utah in 2008, Novell's lead attorney Michael A. Jacobs of Morrison & Foerster, told the court a bit about what was happening in the arbitration:

And, in particular, in the SUSE arbitration, which is still stayed pending the bankruptcy, when SCO was arguing to ... the arbitral panel: Don't go forward with this arbitration. There is no need. The Court -- the District Court in Utah, Judge Kimball, has already ruled on all the important issues here.

SCO said it was pointless for the arbitration to continue because the ownership decisions that the Court made here addressed all of SCO's claims relating to Linux.

It wanted to drop the arbitration. That's how hotly contested it wasn't. And it's still stayed. So exactly when did it become "hotly contested"? And if SCO was about to prevail, why did it argue to drop the whole arbitration? Is SCO telling stories? Is new SCO management starting to behave like old SCO management, or is it simply that they don't know all the water under SCO's bridge and are being misled?

I don't know. But Cahn has submitted a motion to seal [PDF], asking also that the arbitration materials be included in the hearing tomorrow, according to a new, proposed agenda [PDF] he's also filed.

Talk about last minute. They file the offer of the sealed materials today and set the deadline to object for the next day, the day of the hearing, December 30, one day's notice. In short, if anyone wishes to object, they'll likely have to do it orally at the hearing, with little time to prepare, which puts SUSE at a disadvantage. Some things never change with SCO, I gather. Well, this is a slight improvement. It's certainly better than showing up at the hearing tomorrow with the documents in your hand, with no notice at all, claiming that they were just signed in the parking lot, the ink still dripping on them, and you only found out on your way to the hearing or some such, a la the dancing Arthur Spector, and Darl McBride there with you, ready to swear on the witness stand it happened just that way.

The real question that lingers in my mind, though, is why didn't SCO submit this offer with their objection to SUSE's motion to lift the stay? One element both sides have to try to demonstrate is whether or not SUSE is likely to prevail in the arbitration. That's not news to either side that they have to address that in connection with any motion to lift the stay to proceed with arbitration, so I can't help but ask why this 11th-hour submission?

I am not a bankruptcy expert, though, so I could be missing plenty. Just guessing, but I think they either forgot, worried about confidentiality, or thought it wasn't needed, being so used to this bankruptcy judge doing whatever they ask, that it wasn't until they read SUSE's assertion in its Reply that "the Trustee does not even attempt to explain the evidence and arguments that supposedly support SCO's position" that they got rattled enough to gather some evidence and arguments to present.

But how? Their turn to speak was over, as far as the normal course of motion practice, assuming I've understood things, unless they get special permission, so here they are instead with a new motion that just happens to relate directly to the prior motion, offering to let the court have the "Confidential Arbitration Document" -- also later referred to as "Documents" -- instead of asking for the opportunity to respond to SUSE's motion directly.

Cahn also asks the court to bless this extremely short notice on his motion, so the document can be part of the hearing tomorrow. And considering that with this bankruptcy court, no one seems to really care about rules or normal practice, this will likely work.

Well, they'll care about trying to exclude the public from the part of the hearing where any arguments relate to the document(s) happen, I'm guessing. Rules apply to you and me, us little people, just not to SCO.

But just so you know, you are not supposed to sandbag the other side, not that you can tell from SCO's bankruptcy practice. They do it again and again, and each time the judge lets it happen. He likely will again. SCO will argue that the document(s) are directly pertinent to his ability to make the right decision on SUSE's motion, and judging from his previous reactions to SCO's sandbagging, he'll probably slide right along.

And so new SCO management is beginning to look to me a bit like old SCO management, I'm sorry to say. To be fair, perhaps there are lots of phone calls to SUSE and the US Trustee and everyone has agreed to go forward this way and we just don't know it, but why would SUSE agree? I expect SCO could argue that the document(s) belong with the issues that will be argued, that they are responding to something SUSE mentioned in the Reply, not in the Motion, that SUSE already has a copy of the document, and rather than postponing the hearing or going forward as a separate motion with a separate hearing, it makes sense to do it this way. But why not just ask the court to let you respond to SUSE directly, instead of with a new motion? Well, I'm not a lawyer, and they do what they think will work. That's their job.

On the other hand, I can't help but notice that SUSE filed its Reply on the 23rd. SCO already had the document, one assumes, on the 23rd. So why wait until the day before the hearing, unless the purpose is to sandbag? They needed to take time to research to argue why the judge should allow this to be sealed? Well, why doesn't SUSE need time to do that too, then? SUSE may not be ready to argue this at the drop of SCO's hat.

I confess I am disappointed to see this. Is there is a curse on SCO or something? It seems like everyone fighting for SCO ends up damaged in some essential way. But let's reserve judgment until tomorrow. It's conceivable, as loosely as bankruptcy courts are run, that they all chatted about this last week. We'll find out tomorrow at the hearing. If SUSE turns purple when Cahn's motion is argued, you'll know they aren't happy about being sandbagged. If not and no one seems to mind, we will know to file this in the "lotsa weird things happen in bankruptcy court" slot. Incidentally, if you are curious about why the arbitration matters, you can review this Joint Status Report that SCO and Novell filed with Judge Dale Kimball in August of 2007, letting him know what was still on the table after his ruling on the 10th, now partially overturned on appeal, and if you search the joint report by keyword 'arbitration', you'll see items that SCO at the time agreed were stayed by arbitration. And here's a handy chart.

All the new filings, so you can form your own impression:

12/29/2009 - 1012 - Declaration of Ryan E. Tibbitts in Support of Objection of Chapter 11 Trustee to SUSE's Motion for Relief From the Automatic Stay to Complete International Arbitration (related document(s) 951 , 992 , 995 ) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Fatell, Bonnie) (Entered: 12/29/2009)

12/29/2009 - 1013 - Motion to File Under Seal and Shorten Time For Notice and Response Thereto (related document(s) 1012 ) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Attachments: # 1 Notice # 2 Exhibit A-1 # 3 Exhibit A-2) (Fatell, Bonnie) (Entered: 12/29/2009)

12/29/2009 - 1014 - Amended Notice of Agenda of Matters Scheduled for Hearing Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. Hearing scheduled for 12/30/2009 at 10:00 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. (Fatell, Bonnie) (Entered: 12/29/2009)

Update: A witty reader, cpeterson, sums up in a comment SCO's position about the arbitration:
Please, your Honor, Please!
Don't make us go to arbitration, 'cause we'd WIN!

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