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IBM Serves a Subpoena Duces Tecum on KPMG |
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Tuesday, November 01 2005 @ 09:30 PM EST
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IBM has subpoenaed KPMG [PDF] (a subpoena duces tecum, the kind of subpoena that asks for documents to be produced), and asks them to turn over all Novell-Santa Cruz Unix transaction documents regarding the September 19, 1995 Asset Purchase Agreement, as well as all Santa-Cruz-Caldera Unix transaction documents, namely all documents related to the Agreement and Plan of Reorganization, dated August 1, 2000 and amended on September 13, 2000, December 12, 2000, and February 9, 2001 between oldSCO, Caldera Systems, Inc. and Caldera International, Inc.
SCO, as you'll recall, is refusing to turn over certain documents to IBM on the ground that they are privileged, so IBM obviously put on their thinking cap and figured out who else might have them. Like SCO, they are playing beat the clock, as the deadline for fact discovery looms. So, although they have a discovery motion regarding SCO's privilege log, at the same time KPMG is being asked to supply the documents about the two transactions.
And by the way, just in case any documents ended up in Sun Microsystem's hands, when it bought Tarantella, IBM defines the term "Santa Cruz"
to mean and include, "collectively and/or individually, The Santa Cruz Operation, Inc., Tarantella, Inc., or Sun Microsystems, Inc., and all its directors, officers, authorized agents, employees, consultants, attorneys, representatives, direct and indirect, contractors, and/or all other persons acting on behalf of The Santa Cruz Operation, Inc., Tarantella, Inc., or Sun Microsystems, Inc."
And look what KPMG is being asked to produce, and then tell me that IBM isn't out for blood. It also may give us a hint why SCO doesn't want to turn its privilege log documents over. After the revelations or the allegations in the Canopy-Yarro litigation, it seems natural that IBM would be interested in the financial details of the various transactions. That is one way to determine exactly who transfered what to whom. Or if they ever did. For example, in asking for documents related to the Asset Purchase Agreement of 1995 between Novell and oldSCO, when Unix assets transfered, they want to see such things as the bill of sale and the allocation of the purchase price. Obviously, lawyers on both sides gave opinion letters, so they'd like to see them also.
Here's the complete list:
******************************* Documents to be Produced
Novell-Santa Cruz Unix Transaction Documents.
1. All documents in your possession, custody, or control that refer, reflect or relate to the Asset Purchase Agreement, dated September 19, 1995 ("APA"), by and between Novell, Inc. ("Novell") and Santa Cruz (defined below), including, without limitation, any and all transactional. due diligence, or financial documents related to the sale or transfer of assets or stock in connection with that transaction together with any reports, analyses, valuations, appraisals, or opinions in your possession, custody, or control related to the transaction.
2. Any and all transactional, due diligence, or financial documents concerning the sale or transfer of Unix or Unix-related assets from Novell to Santa Cruz.
3. The following documents specifically referred to in the APA:
a. Allocation of the Purchase Price (Section 1.2(c)),
b. Copies of the financial statements delivered pursuant to Section 2.3,
c. Bill of sale,
d. Operating Agreement between Novell and SCO (Section 5.1(c)),
e. Legal opinion of legal counsel of Buyer (Section 5.2(c)),
f. Legal opinion of legal counsel of Seller (Section 5.3(c)).
4. The final report, including supporting exhibits, and all work papers supporting the allocation of the purchase price paid by Santa Cruz to Novell for the 1995 purchase of Unix or Unix related assets, including but not limited to the following:
a. Drafts
b. Market research
c. Historical financial information for the Unix business,
d. Financial projections for the Unix business,
e. Notes,
f. Client interviews,
g. Discount rate support and analysis,
h. Licensing agreements of the intellectual property or any licensing agreements used in the allocation,
i. Any other information used to allocate the purchase price of the acquisition for financial reporting purposes.
5. The final report and all documents supporting any impairment analysis or valuation of intangible assets concerning Unix or Unix-related assets, from 1995 to 2001.
6. Any and all documents, communications, or correspondence, whether formal or informal, concerning the foregoing topics. Santa Cruz-Caldera Unix Transaction Documents
1. All documents in your possession, custody, or control that refer, reflect or relate to the Agreement and Plan of Reorganization, dated August 1, 2000 and amended on September 13, 2000, December 12, 2000, and February 9, 2001 (the "Agreement and Plan") by and between Santa Cruz, Caldera Systems, Inc., and Caldera International, Inc., including, without limitation, any and all transactional, due diligence, or financial documents related to the sale or transfer of assets in connection with that transaction together with any reports, analyses, valuations, appraisals, or opinions in your possession, custody, or control related to the transaction.
2. Any and all transactional, due diligence, or financial documents concerning the sale or transfer of Unix or Unix-related assets from Santa Cruz to Caldera (defined below).
3. The following documents, specifically referred to in the Agreement and Plan:
a. Attachment A to the Third Amendment (or the amended Exhibit 1.4(b)),
b. Exhibit 1.4(c)(i)(B),
c. Attachment B to the Third Amendment (or the amended Exhibit 13.15A),
d. Attachment C to the Third Amendment (or the amended Exhibit 13.15D),
e. Attachment D to the Third Amendment (or the amended Exhibit 13.15D),
f. Exhibit 13.15C,
g. Attachment E to the Third Amendment (or the amended Exhibit 13.15E).
4. The final report, including the supporting exhibits, and all work papers supporting the Impairment/Valuation Analysis, incorporated in Caldera's October 31, 2001 10K filing with the United States Securities and Exchange Commission, concerning the Server and Professional Services Group acquired from Santa Cruz, including but not limited to the following:
a. Drafts,
b. Market research
c. Historical financial information for the Unix business,
d. Financial projections for the Unix business,
e. Notes,
f. Client interviews,
g. Discount rate support and analysis,
h. Guideline or company research or analysis,
i. Any other information used to allocate the purchase price of the acquisition for financial reporting purposes.
5. The final report and all documents supporting any impairment analysis or valuation of intangible assets concerning Unix or Unix-related assets, from 2001 to the present.
6. Any and all documents, communications, or correspondence, whether formal or informal, concerning the foregoing topics.
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Authored by: IRJustman on Tuesday, November 01 2005 @ 09:38 PM EST |
Post 'em if ya got 'em. [ Reply to This | # ]
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Authored by: Anonymous on Tuesday, November 01 2005 @ 09:39 PM EST |
This is simply awesome. Now things are going to get interesting! [ Reply to This | # ]
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Authored by: IRJustman on Tuesday, November 01 2005 @ 09:40 PM EST |
You know the drill. [ Reply to This | # ]
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Authored by: dkpatrick on Tuesday, November 01 2005 @ 09:43 PM EST |
I can't imagine KPMG is thrilled about being dragged into this mess. Satisfying
the IBM subpeona is going to cost them a lot of bucks.
Wonder if they can pressure SCOX to release the documents and thus avoid the
time and expense they'd incur.
Buy from SCOX, get sued ...
Deal with SCOX, get subpoenaed ...
---
"Keep your friends close but your enemies closer!" -- Sun Tzu[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, November 01 2005 @ 09:43 PM EST |
But does KPMG have to comply? Or can they claim some sort of confidentiality
(it's really their client's data)?
Or can they claim confidentiality, but they don't have the incentive to fight to
the death that SCO has, since SCO is one client that won't be around for long?
MSS2[ Reply to This | # ]
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Authored by: Mecha on Tuesday, November 01 2005 @ 10:08 PM EST |
The Novell-Santa Cruz Operation APA shouldn't be. I want to see the Santa Cruz
Operation-Caldera APA contracts.
---
** This is my signature and I happen to like it **[ Reply to This | # ]
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Authored by: thorpie on Tuesday, November 01 2005 @ 10:55 PM EST |
I take it that KPMG was working for one party or the other in each instance,
although I suppose they could have been jointly employed by both the buyer and
the seller.
Anyone any idea how these things work? As they were employed
on both occassions is it likely that they were employed by oldSCO (now
Tarantella). If so are they beyond the reach/influence of newSCO? If they are
beyond their reach will they roll over quicker? --- The memories of a
man in his old age are the deeds of a man in his prime - Floyd, Pink [ Reply to This | # ]
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Authored by: Anonymous on Tuesday, November 01 2005 @ 11:07 PM EST |
KPMG? I'm sorry, I can't recall these people being brought up before? Are they
some sort of accounting firm?[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, November 01 2005 @ 11:15 PM EST |
SCO exposed! The Sith is going down.. Yes! [ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 02 2005 @ 12:05 AM EST |
If KPMG drag their heels can IBM apply for a delay at this stage?
Could these documents have ended up shredded by now or are there retention
requirements on accountants in the US?
I came in part way through the case so this may have an obvious answer. Did IBM
go after Canopy or Tarantella for any of this?
Tufty
[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 02 2005 @ 12:25 AM EST |
May your actions come back to haunt you. :)
I love the idea of IBM going
after financial records
:)
And it will all be played out in public.
PJ,
Groklaw, Yahoo and some others accounting.
Don't bite on a hook twice my
friends.
:) Brian S. [ Reply to This | # ]
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Authored by: MrCharon on Wednesday, November 02 2005 @ 12:38 AM EST |
Can this be contested by SCO or KPMG and if so what is the processes that will
follow?[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 02 2005 @ 04:03 AM EST |
They should have gone after this stuff months ago.
Darkside, not logged in. [ Reply to This | # ]
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Authored by: TheBlueSkyRanger on Wednesday, November 02 2005 @ 05:26 AM EST |
Hey, everybody!
I'm wondering about the timing of this. How long ago did IBM serve those
subpeonas? I'm wondering, if it was this week, if there is a reason they waited
until after the "Put up or shut up" deadline for the infringing code.
Or am I reading too much into this?
Dobre utka,
The Blue Sky Ranger[ Reply to This | # ]
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Authored by: DaveJakeman on Wednesday, November 02 2005 @ 06:53 AM EST |
...to be followed shortly thereafter by a dull thud and a great trembling of the
earth.
It's sad that IBM are having to do Novell's work for them; IBM seem to be
lumbered with all the hard work here. But then, wasn't the SCO/Novell case held
back so this one could play out first? Isn't this the inevitable result of
putting the cart before the horse? Or have I got that wrong?
Novell, take note.
KPMG, now's your chance to say what you politely refrained from saying earlier -
only more damningly.
SCO, quake appropriately. Now they get to find out those things you least want
them to find out about.
Great idea, IBM, but why so late? I just hope there's enough time!
---
Should one hear an accusation, first look to see how it might be levelled at the
accuser.[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 02 2005 @ 07:55 AM EST |
IBM is attempting to serve a Subpoena Duces Tecum on a non-party in the State of
New Jersey concerning an action filed in the District Court in Utah.
Rule 45 allows for no such action:
(3) (A) On timely motion, the court by which a subpoena was issued shall quash
or modify the subpoena if it
(ii) requires a person who is not a party or an officer of a party to travel to
a place more than 100 miles from the place where that person resides, is
employed or regularly transacts business in person, except that, subject to the
provisions of clause (c)(3)(B)(iii) of this rule, such a person may in order to
attend trial be commanded to travel from any such place within the state in
which the trial is held, or
(iii) requires disclosure of privileged or other protected matter and no
exception or waiver applies, or...
It will be November the 14th in the year 2020 before the motions to quash are
heard for this moronic subpoena request.
[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 02 2005 @ 09:40 AM EST |
1) The court has been way beyond lavishly generous granting scox's bogus
discovery requests. How come the court is accomodates one side but not the
other?
2) AIX is far more valuable than anything scox has ever owned.
3) These secrets that scox is claiming need only be viewed by IBM auditors - not
the general public.
4) IBM has made a very case as to why IBM needs this discovery.
[ Reply to This | # ]
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Authored by: bbaston on Wednesday, November 02 2005 @ 10:30 AM EST |
Who and what is KPMG? Here. --- Ben, Groklawian in
training
IMBW, IANAL2, IMHO, IAVO
imaybewrong, iamnotalawyertoo, inmyhumbleopinion, iamveryold
Have you donated to Groklaw this month? [ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 02 2005 @ 11:03 AM EST |
Couldn't they also ask Novell?
Have they?
do they have to serve them?
or is this kinda a moot point? ;)[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 02 2005 @ 01:59 PM EST |
>>Hardware and communication becomes cheaper and programmers do not.
<<
Programmers certainly do become cheaper. Indian software engineers are working
for $50.00 USD a week.
[ Reply to This | # ]
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Authored by: sproggit on Thursday, November 03 2005 @ 10:10 AM EST |
Team,
Here's a silly notion for a legal expert to tell us about.
Suppose IBM get some data via this subpoena. Suppose the information supports
IBMs case. Suppose, further, that the information does not contravene things
like attorney-client privilege. [Let's all remember how quickly SCO gave that as
a response, like they had the time to go and validate that statement before
making it...].
Now suppose IBM go back to the court, with this evidence collected.
"Your honour, we asked SCO for information relevant to this case through
the discovery process on which you adjudicated. SCO refused to provide the
information, claiming privilege and confidentiality. We continued our discovery
via other means and secured the following evidence which we respectfully submit.
We would like to draw the court's attention to the fact that all of this
submission is relevant to the case and similarly that none of this submission is
or would have been covered by the attorney-client privilege or confidentiality,
as claimed by SCO, when they denied our request for this information.
Your honour, on this basis, IBM respectfully submits that the Court find SCO to
be in Contempt of Court and, moreover, guilty of the charge of attempting to
pevert the course of justice, by knowingly and wilfully witholding
evidence."
Dramatic and unlikely, but, if there is something out there that IBM could use,
I still think this could be dangerous for SCO.
Comments anyone?[ Reply to This | # ]
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Authored by: Anonymous on Thursday, November 03 2005 @ 07:03 PM EST |
Would KPMG even have these particular documents after such a long time? How
long does a company like this keep their client's supporting documentation
before sending it back or heaving in the dumpster? This probably seemed like an
arms-length transaction at the time -- who would have known it would turn to
mush? Scary that a third (or fourth) party would be dragged into this and be
called to the carpet to surrender documents like this.[ Reply to This | # ]
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