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Oracle Objects to SCO's Cure Notice: What contracts? Who is SCO selling to?
Friday, October 22 2010 @ 10:51 PM EDT

Oracle now joins EMC in objecting to SCO's cure notice. It has no idea what contracts SCO is talking about, first of all:
2. Exhibit “A” to the Cure Notice identifies Oracle, BEA Systems, Inc. and Sun Microsystems as contract counter-parties with contracts to be assumed and assigned through the Sale Motion.

3. Based on the contract descriptions provided in the Cure Notice, Oracle is unable to identify the contracts described.

So that's two now who are in the dark about having any contract with SCO or if they do which contract is involved. Of course, Oracle asked SCO to tell them, and that's where it gets even more interesting. SCO sent them even more contracts not in the original cure notice, so now Oracle is really in the dark. Oracle asks for information about the successful bidder, when known, because it can't possibly evaluate if the new owner is able to fulfill its obligations under the agreements without that information, and until Oracle knows what contracts SCO is talking about, Oracle can't know if the cure amount is correct or not either. "Oracle remains uncertain as to the Debtors’ intent."

In the meantime, Oracle asks the court to deny any forward motion on SCO's request to assume and assign any Oracle executory agreement without Oracle's consent. It points out that federal law makes non-exclusive patent licenses non-assignable unless you have the consent of the licensor. This is patented software at issue, and Oracle reserves its rights to be heard before any license agreements are assumed and assigned.

Here is the filing, first:

10/22/2010 - 1189 - Objection to Notice of Cure Amounts in Connection with the Assumption and Assignment of Executory Contracts and Unexpired Leases and Reservation of Rights Regarding Adequate Assurance (related document(s) 1141 , 1161 , 1184 ) Filed by Oracle USA, Inc. (Attachments: # 1 Certificate of Service) (Huggett, James) (Entered: 10/22/2010)

10/22/2010 - 1190 - Certificate of No Objection Re: Eleventh Monthly Application for Compensation of Ocean Park Advisors, LLC (related document(s) 1176 ) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Fatell, Bonnie) (Entered: 10/22/2010)

Here's what happened when Oracle asked to see the alleged contracts:
4. Without additional information from the Trustee, Oracle is unable to determine either which contracts the Trustee seeks to assume and assign, or the appropriate cure amount owed under the targeted contracts.

5. In conjunction with a prior notice, Oracle requested, and received from the Debtors’ counsel, copies of certain contracts then identified for assumption and assignment.

6. The list of contracts in the recently received Cure Notice includes additional, newly identified contracts, which were not provided by Debtors to Oracle in response to the earlier request.

7. Since a number of the newly listed contracts were not previously provided, and are not recognizable as a result of their broadly worded descriptions in the Cure Notice, Oracle remains uncertain as to the Debtors’ intent.

8. There is also uncertainty regarding the purchaser’s identity, for no stalking horse bidder has emerged and the sale is subject to auction.1

9. Therefore at this time, Oracle cannot evaluate either the eventual purchaser, or whether the prerequisites of 11 U.S.C. § 365(b) have been met.

10. This uncertainty leaves Oracle unable to assess how its pecuniary and proprietary interests may be affected under the proposed sale.

11. Thus, Oracle reserves all rights to be heard on the matter once the successful bidder/potential assignee is known.

12. As described below, the Trustee may not assume and assign any Oracle agreements without Oracle’s consent, as such contracts involve the licensing of patented and/or copyrighted materials, and Oracle does not consent to their assumption and assignment at this time.

13. In order to ensure adequate assurance of future performance by the ultimate purchaser, Oracle requests that the Trustee, at a minimum, provide to Oracle the following information about the eventual successful bidder: (a) financial bona fides; (b) confirmation of status as a non-competitor of Oracle’s; and (c) confirmation of its willingness to execute an Oracle Assignment Agreement and any related documentation.

14. Without this information, Oracle is unable to determine the eventual buyer’s creditworthiness or suitability/ability to adequately perform, and Oracle reserves all rights to object to the purchaser until this information is known.

15. For these reasons, Oracle requests that the Court deny, at this time, the Trustee’s request for an order authorizing assumption and assignment of any Oracle executory agreement in the absence of Oracle’s consent....

21. Since the proposed sale here is subject to auction without even a stalking horse bidder, the identity of the ultimate purchaser/assignee necessarily remains unknown.

22. Therefore, at this time, Oracle cannot determine whether: (a) the ultimate purchaser/assignee is capable of providing adequate assurance of future performance; (b) the proposed assignee is a competitor of Oracle; and (c) the purchaser is willing to enter into a standard form of Oracle Assignment Agreement, and related documentation, reflecting the terms, post-assignment, of the parties’ relationship.

23. Until at least the information identified above is provided, Oracle is unable to determine whether the Trustee has complied, or will comply, with the protections of section 365(b)(1)(A),(B) and (C).

28. Absent payment of the appropriate amounts to Oracle, the Oracle agreements may not be assumed, assumed and assigned or otherwise transferred.

29. Oracle therefore reserves its right to object to the cure until more certainty on the contract or contracts at issue is provided.


1 Pursuant to the Cure Notice, counterparties to leases or contracts have until November 1, 2010 to file an objection based on adequate assurance concerns. The auction is scheduled to be conducted on October 25, 2010. Given the short turn around time, Oracle’s Objection is both as to cure, and to preserve its right to be heard on the issue of adequate assurance of future performance once the successful bidder is known.

Go, Oracle. And if you think Oracle is just filing forms, think again. Its seriousness may be measured by the fact that it has three outside law firms assigned to this case, along with its own in-house attorneys. Two of them.

I love the part about Oracle being unable to determine SCO's intent. I think maybe there's a life lesson here. The trouble with paying your lawyers millions to avoid paying a more or less equivalent sum to your creditors is, it causes questions to arise in the minds of the creditors as to your true intentions.

: D

Of course, we must factor in that lawyers are very polite in court documents as a rule, even the killer litigators. Actually, especially them. They are aware they don't need to raise their voices. And sometimes, when a lawyer says he can't figure out something, it means he can, he doesn't like it, and he has an intent to block.

And if there is one thing the world knows about Oracle, it's that it cares about its money. If anyone in the universe ever wanted to flim flam anybody, not saying that they are, but just if anyone had such a thought in mind ever, Oracle is not reasonably on anyone's list of potential marks. SCO should have learned that from the last time it danced around the legal dance floor with Oracle, and that time, when only a subpoena was at stake, Oracle used only two in-house lawyers, and SCO still lost. Plus, the quality of mercy may not be strained in heaven, but no one should rely, methinks, on it being enthralled in Oracle's heart. It is happy to eat you for breakfast, then wipe its mouth on its sleeve and go play tennis. Seriously, SCO'd best think matters through carefully.

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