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SCO Wants to Sell Java Patent and (Mostly) Pay the Professionals
Monday, March 29 2010 @ 11:06 PM EDT

SCO Chapter 11 Trustee Edward Cahn has now reported to the bankruptcy court that he's closed on the loan from Ralph Yarro and his friends, and now Cahn wants to pay most of the bills in the bankruptcy from SCO's numerous professionals. And he wants to sell the Java patent, since SCO's never used it and has no use for it going forward. He has a buyer, Liberty Lane, LLC, and so he asks the court to approve the sale to Liberty Lane "or another higher and better bidder." That seems unlikely, in that they claim to have shopped the patent to around 40 potential purchasers. Liberty Lane is offering $100,000.

Cahn says he "will pay 80% of fees and 100% of expenses to all of the estates' professionals who have filed (i) monthly and/or interim fee applications for such fees and expenses and (ii) certifications of no objections with respect thereto pursuant to the Interim Compensation Order", but doesn't yet want to pay the last 20% of PSZ&J's bill "until such time as the Trustee has reviewed and evaluated the reasonableness of all fees and expenses generated by the Debtorsí and these estatesí professionals".

So that's where the loan goes, for starters. He's not singling them out, by the way, except for the fact that he wants to wait until all the final bills are in, so he can evaluate reasonableness in a context, and so far they are the only ones that have filed a final bill.

Here are the filings:

03/23/2010 - 1095 - Limited Objection to and Reservation of Rights With Respect to Final Application for Compensation and Reimbursement of Expenses of Pachulski Stang Ziehl & Jones LLP, as Co-Counsel to the Debtors, for the Period from September 14, 2007 through November 16, 2009 (related document(s) 1076 ) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al. (Fatell, Bonnie) (Entered: 03/23/2010)

03/23/2010 - 1096 - Application for Compensation (Twenty-Second Interim) of Tanner LC for the Period From October 1, 2009 Through October 31, 2009 Filed by Tanner LC. Objections due by 4/12/2010. (Attachments: # 1 Notice # 2 Exhibit A # 3 Certificate of Service) (Fatell, Bonnie) (Entered: 03/23/2010)

03/26/2010 - 1097 - Certificate of No Objection Re: Fourth Monthly Fee Application of Ocean Park Advisors, LLC, Financial Advisor to the Chapter 11 Trustee of the SCO Group, Inc., et al., for Compensation and Reimbursement of Expenses for the Period of January 1, 2010 through January 31, 2010 (related document(s) 1071 ) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Fatell, Bonnie) (Entered: 03/26/2010)

03/26/2010 - 1098 - Monthly Application for Compensation (Fifth) for the Period of February 1, 2010 Through February 28, 2010 Filed by Ocean Park Advisors, LLC. Objections due by 4/16/2010. (Attachments: # 1 Notice # 2 Exhibit A # 3 Exhibit B # 4 Certificate of Service) (Fatell, Bonnie) (Entered: 03/26/2010)

03/29/2010 - 1099 - Motion to Approve Sale // Motion of the Chapter 11 Trustee for Order Under 11 U.S.C. Sections 105(a) and 363 and Fed. R. Bankr. 2002 and 6004 (A) Approving the Sale of the IP Asset Free and Clear of All Liens, Claims Interests, and Encumbrances Pursuant to 11 U.S.C Section 363 and (B) Granting Related Relief Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. Hearing scheduled for 4/20/2010 at 04:00 PM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 4/13/2010. (Attachments: # 1 Notice # 2 Exhibit A # 3 Exhibit B # 4 Exhibit C # 5 Exhibit D # 6 Exhibit E # 7 Certificate of Service) (Fatell, Bonnie) (Entered: 03/29/2010)

Cahn says he doesn't think a public auction is necessary. They'll put an ad in a Salt Lake City newspaper, and he asks that the private sale be stamped OK by the court to go forward. If anyone bids, and is demonstrated to be a good faith buyer, then they'll have an auction on April 19, the day before the hearing on this motion. Oh, and normally after an order to sell issues, you wait 14 days, but Cahn asks the court to waive that requirement.

And who is Liberty Lane LLC? According to Exhibit B [PDF], they have an office in San Diego, CA but are a Delaware LLC. Exhibit D says Liberty Lane is a company affiliated with Allied Security Trust I, and if that is this patent-protection (from trolls) company, that might not be half bad. Google and HP are members of Allied. At least they'd keep it out of the hands of the litigation lizards. That's Allied's purpose, to dry up patent trolling as a "business" by buying up patents that might be used that way. And Exhibit E [PDF] indicates they are one and the same, in that the letter of intent shows the same name as CFO, Kerry Hopkin.

I don't care how much Microsoft wants us to hate Google. I love those guys.

Update: I had never heard of Perk-Up, so I did some research. Here's what it was, a technology announced at SCOForum 1999. Are they selling it as an IP asset, a technology that happens to have a patent in it, instead of just a stand-alone patent? The buyer isn't in the software business and just wants the patent, presumably. Might it be because Ocean Park gets more money if they sell an IP asset instead of a stand-alone patent? I hope they clarify this at the hearing, because we don't know the answer. We're puzzling over the various references to the proposed sale, as being in one place called a sale of a stand-alone patent and in others as an IP Asset, Perk-Up, in others.

Update 2: Allied describes itself in a press release regarding settling litigation with Limelight like this:

About Allied Security Trust AST ( www.alliedsecuritytrust.com : www.alliedsecuritytrust.com ) is a member-owned Delaware Statutory Trust that identifies and analyzes high-technology patents being sold on the market, circulates those to its 16 member companies (each with annual revenues US $1 billion), and combines funds of interested member companies to purchase patents. It then sells the patents subject to licenses granted to those members, with proceeds returned to the members that funded the purchase. To date, it has invested US $40M to purchase 400 patents. For patent portfolios that have been sold by the Trust or are currently on the market, 82% of the money originally invested by Trust members to obtain their patent license has been returned to them at the time the patents are sold, making the Trust by far the most economical collaborative mechanism in the world for members to obtain licenses to patents that may otherwise fall into the hands of an adversarial party.
Note this from the body of the release:
As a result of the agreement, Limelight Networks, Twister Investments, and Allied Software Trust (AST) have agreed to execute a Stipulation of Dismissal with Prejudice for the purpose of dismissing with prejudice the declaratory judgment action Limelight Networks, Inc. v. Allied Security Trust and Twister Investments, LLC, United States District Court, District of Arizona, Case No. 2:10-cv-00585-NVW.

"Limelight respects AST's goals and its charter, and we are pleased to bring this matter to a rapid and mutually agreeable resolution," said Philip Maynard, chief legal officer, Limelight Networks, Inc.

"As a purely defensive organization helping to minimize the exposure of operating companies to adversarial patent holders, we are appreciative of Limelight's efforts to find a quick and mutually agreeable resolution," responded Dan McCurdy, chief executive officer, Allied Security Trust.


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