Sometimes when this old earth is spinning around and around, just for a moment it stops at just the right place.
And so it is that Judge Clark Waddoups has set a hearing for oral argument on SCO's motion to restart parts of SCO v. IBM, a motion IBM opposes. Guess when he scheduled it for?
April! Yes, friends, April 18th -- 5 1/2 months from now. Do you think SCO can last that long? Let's look at the latest financials.
First, here's the notice about the hearing:
11/28/2011 - 1101 - NOTICE OF HEARING ON MOTION re: 1095 MOTION to
Reopen Case : (Notice generated by jwt) Motion Hearing set for 4/18/2012
03:30 PM in Room 102 before Judge Clark Waddoups. (jwt) (Entered:
11/28/2011)
Here are the latest financials from TSG, formerly known as The SCO Group, along with the most recent bills from Ocean Park, still drinking from the trough, although at a reduced rate -- the bill for October is only for a little over $6,000, compared with September's for $21,558.50:
11/10/2011 - 1366 - Certificate of No Objection regarding Monthly
Application for Compensation of Ocean Park Advisors, LLC (Twenty-Second)
for the period July 1, 2011 to July 31, 2011 [No Order Required]
(related document(s) 1333 ) Filed by Ocean Park Advisors, LLC. (Tarr,
Stanley) (Entered: 11/10/2011)
11/10/2011 - 1367 - Monthly
Application for Compensation of Ocean Park Advisors, LLC, Financial
Advisor to the Chapter 11 Trustee of the TSG Group, Inc., et al., for
the period September 1, 2011 to September 30, 2011 Filed by Ocean Park
Advisors, LLC. Objections due by 11/30/2011. (Attachments: # 1 Notice # 2 Exhibit A # 3
Exhibit B #
4 Certificate of
Service) (Tarr, Stanley) (Entered: 11/10/2011)
11/10/2011 - 1368 - Notice of Withdrawal of [DUPLICATE FILING]
Certificate of No Objection regarding Monthly Application for
Compensation of Ocean Park Advisors, LLC (Twenty-Second) for the period
July 1, 2011 to July 31, 2011 (related document(s) 1366 ) Filed by Ocean
Park Advisors, LLC. (Tarr, Stanley) (Entered: 11/10/2011)
11/10/2011 - 1369 - Certificate of No Objection regarding Monthly
Application for Compensation of Ocean Park Advisors, LLC (Twenty-Third)
for the period August 1, 2011 to August 31, 2011 [No Order Required]
(related document(s) 1344 ) Filed by Ocean Park Advisors, LLC. (Tarr,
Stanley) (Entered: 11/10/2011)
11/21/2011 - 1370 - HEARING CANCELLED/RESCHEDULED. 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 11/23/2011 at 10:00 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. (Attachments: 1 Certificate of Service) (Tarr, Stanley) (Entered: 11/21/2011)
11/28/2011 - 1371 - Monthly
Application for Compensation of Ocean Park Advisors, LLC (Twenty-Fifth)
for the period October 1, 2011 to October 31, 2011 Filed by Ocean Park
Advisors, LLC. Objections due by 12/19/2011. (Attachments: # 1 Notice # 2 Exhibit A # 3
Exhibit B #
4 Certificate of
Service) (Tarr, Stanley) (Entered: 11/28/2011)
11/29/2011 - 1372 -
Debtor-In-Possession Monthly Operating Report for Filing Period As of 10/31/11 (TSG Group, Inc. (f/k/a The SCO Group, Inc.), et al.; 07-11337) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley)
11/29/2011 - 1373 -
Debtor-In-Possession Monthly Operating Report for Filing Period As of 10/31/11 (TSG Operations, Inc. (f/k/a SCO Operations, Inc.); 07-11338) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Tarr, Stanley)
Note this is from PACER, but in actuality, 1372 is SCO Operations, and 1373 is SCO Group, so they got them mixed up in their filing. However, this is how it appears on PACER, so we're leaving it that way and just letting you know.
The hearing that was set for November 23rd was cancelled, as you see, because there were no matters to handle at a hearing. No one is objecting to anything. Bills get filed. No one objects. Folks get retained to do auditing and accounting tasks, and no one objects. So if anything interesting is happening, for sure it's not happening in public. So to our eyes, it looks like they are sleepwalking.
The Trustee was given permission to enter into a settlement agreement with the disgruntled lenders, Yarro and the boys, docket 1326 [PDF], and to effectuate it in whatever ways seemed good to them, docket Exhibit B [PDF]. This he did, and the court approved it. In the agreement [PDF], the lenders said they wouldn't object to the trustee paying professionals their fees, but they retain first dibs on any litigation proceeds. Actually, they have a lien on it, although they agree that they won't object to any professional fees still outstanding being paid. But the main term agreed upon, from my perspective, was that the trustee could pursue the litigation any way he wanted without their oversight or control, and that included dropping it if he saw fit. So, this latest motion to partly reopen the IBM case would appear to be solely his idea and the responsibility for it rests firmly on his shoulders. So how much money does SCO, I mean TSG, have? According to Dale Easton, whoever that is, who signed the October MORs as Controller, not much. At the beginning of October, SCO Operations had $370,285. At the end, it had $285,584. It took in $32,856; it paid UnXis $87,948 in "Settlement payments", whatever that is. Wait. Payments to UnXis. I thought UnXis was the buyer, not the seller.
Kidding. All the money goes away from headquarters. That's been the whole flow for some time.
SCO Operations is out $5,628,862 since the bankruptcy was filed. [Update: And no wonder. I just noticed on page 15 of Exhibit B, SCO Operations, under the header Amount Paid, totals $7,035,000 in professional fees paid since the bankruptcy began. Plus $492,956 in expenses. And that's not all the bills even. On page 17, we see 15,030 in professional fees, nonbankruptcy, and $19,763 in fees related to the "reorganization". And it lists (4,419) under Gain (Loss) of Sale of Equipment. On page 19, it lists $5,972,193 as prepetition liabilities; and $9,568,906 for "total liabilities".] It lists $19,932 in "AR Collections on Unxis Invoices - Due to Unxis" in October (that's better than what I first read it as, payment of stock options, but a reader points out that it's one line above). And the "reorganization" losses, attributed to SCO Group instead, totaled $700,276. And still they linger in bankruptcy with no reorganization to shake a stick at to date, still hitching their wagon to the fading star of "litigation proceeds" from IBM.
Ocean Park billed for nine matters in September, "Post-close Transition Implementation" being the biggest time sink. That's things like closing down bank accounts and handling 401K issues. "Analysis & Preparation of Financial models" was the next biggest. Financial models. Are they kidding? SCO is for sure not a financial model in my book. Then there was "Analysis and Preparation of Court Filings", and the rest are things like preparing for and participating in phone calls and meetings with management and with the Ch. 11 trustee and lawyers. To give you an idea of how they spent their time, Ocean Park spent 5.5 hours on "Preparation of Fee/Expense Applications" and only 1.1 hour on "Planning, Supervision and Review" of the company that month.
In October, Ocean Park spent a total of 26.8 hours on TSG, 7.1 on "Post-close Transition Implementation", 6.7 on "Analysis & Preparation of Financial models" (more financial models), 3.5 on "Analysis & Preparation of Court filings", and almost as much time, 3.0 hours, on "Preparation of Fee/Expense Applications". Wait. There were no court hearings in September or October in the bankruptcy. So what are these court filings, I asked myself. I josh. No one cares, least of all bankruptcy court. But if you look at the details, it's the MORs. Ocean Park does them, according to the itemized bills. Thus, they not only bill SCO for "helping" them model their financials, whatever that means; they also get paid for carefully chronicling each month the precise flow of lifeblood they and others suck from the corpse that used to be SCO; and then they bill for preparing the bills. And who is there to block them? The lenders can't. The court surely has no history of being awake at the wheel. Rather, like the dormouse at the Mad Hatter's tea party, who awoke only to say something brief and then fall asleep in the tea again, the court schedules a hearing and then cancels it. Then it does it again. But now a judge in the Utah has set a hearing for April, and it will actually come to pass. I doubt SCO thought the hearing would be set for so far into the future. So what do you think? Will TSG make it to April 18? If it takes another loan, I'd guess so. I suspect they'll try to find some way to hang on, and since they have no employees left, I guess, just a skeleton crew, if I may call it that, maybe they can hang on until April. After riding their plastic horses round and around on this sick merry-go-round called SCO litigations, reaching like drooling madmen for the brass ring since 2002, they surely won't let go of the dreams of litigation riches now.
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