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IBM and Novell Move to Convert SCO BK to Chapter 7 |
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Monday, May 11 2009 @ 05:42 PM EDT
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Well, well...IBM and Novell have each filed motions in the SCO bankruptcy to convert the SCO Chapter 11 cases to Chapter 7. That makes three such motions. Here's the US Trustee's motion, if you are new. We're working on text versions. Keep in mind these are motions, not yet granted, and SCO can file objections and/or can still file a plan to try to abort the motions if anyone wishes to give them a truckload of money. Anyone?
Update: This is new: a list [PDF] attached to IBM's filing, of all the equity security holders of SCO Group.
Here's the rule on notices to equity security holders, and you can discern from reading it carefully that this may not be a complete or current list. You can compare it with the list [PDF] SCO filed at the beginning of this Chapter 11 bankruptcy in September 2007. Here are the filings:
05/11/2009 751 Motion to
Convert Chapter 11 Case to a Case Under Chapter 7. Fee Amount $15. Filed
by IBM Corp.. Hearing scheduled for 6/12/2009 at 02:00 PM at US
Bankruptcy Court, 824 Market St., Wilmington, DE. Objections due by
6/1/2009. (Attachments: # 1 Notice # 2 Exhibit A # 3 Certificate of
Service # 4 2002 Service List
# 5 Creditor
Service List # 6 Equity Security
Service List) (MacConaill, Gabriel) (Entered: 05/11/2009)
05/11/2009 752 Receipt of filing fee for Motion to Convert Case 11 to
Chapter 7 (B)(07-11337-KG) [motion,mcn11to7] ( 15.00). Receipt Number
3922316, amount $ 15.00. (U.S. Treasury) (Entered: 05/11/2009)
05/11/2009 753 Motion to Convert Chapter 11 Case to a Case Under Chapter 7. Fee Amount $15. Filed by Novell, Inc.. Hearing scheduled for 6/12/2009 at 02:00 PM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 6/5/2009. (Greecher, Sean) (Entered: 05/11/2009)
05/11/2009 754 Receipt of filing fee for Motion to Convert Case 11 to Chapter 7 (B)(07-11337-KG) [motion,mcn11to7] ( 15.00). Receipt Number 3922350, amount $ 15.00. (U.S. Treasury) (Entered: 05/11/2009)
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Authored by: Erwan on Monday, May 11 2009 @ 05:43 PM EDT |
If any.
---
Erwan[ Reply to This | # ]
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Authored by: Erwan on Monday, May 11 2009 @ 05:44 PM EDT |
Please, quote the article's title.
---
Erwan[ Reply to This | # ]
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Authored by: Erwan on Monday, May 11 2009 @ 05:45 PM EDT |
As usual.
---
Erwan[ Reply to This | # ]
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Authored by: Erwan on Monday, May 11 2009 @ 05:48 PM EDT |
What are your whereabouts on 12-Jun-2009 at 2pm Delaware
time? --- Erwan [ Reply to This | # ]
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Authored by: seanlynch on Monday, May 11 2009 @ 05:52 PM EDT |
This could be the moment we've waited for...
SCO will finally produce
mountains of evidence in opposition to these motions.
It may be their very
last chance! [ Reply to This | # ]
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Authored by: DaveJakeman on Monday, May 11 2009 @ 06:01 PM EDT |
I've got two cents, but I'm not sure I'm prepared to lend it to SCO. I might not
get my money back.
---
Monopolistic Ignominious Corporation Requiring Office $tandard Only For
Themselves[ Reply to This | # ]
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Authored by: Anonymous on Monday, May 11 2009 @ 06:03 PM EDT |
SCO: "Right, I'll do you for that!"
IBM/Novell: "What are you gonna do, bleed on me?"
[ Reply to This | # ]
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Authored by: FUDbar on Monday, May 11 2009 @ 07:23 PM EDT |
Quick question: why is there a mention to "Objections Due by June 1" for the IBM
motion? Is that normal procedure? You don't see the same for the other motions,
although we get a hearing date. Anyone cares to explain?
Great motions,
though. I can see light... at the end...
--- fb
--
Numquam ponenda est pluralitas sine necessitate,
or, in my own translation, "Don't make it more complicated than it is!" [ Reply to This | # ]
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Authored by: Anonymous on Monday, May 11 2009 @ 07:33 PM EDT |
Why have they all filed separate motions? Could they not have written memos in
support?[ Reply to This | # ]
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Authored by: comms-warrior on Monday, May 11 2009 @ 08:09 PM EDT |
So,
In conversion to Chapter 7 bankruptcy, the "secured creditors" or
something similar would have a say to the breakup of the company?
Would this mean that IBM and Novell will have rights to buy the company out and
slam the door on the useless litigation?
This would give Novell and IBM unprecedented access to the companies records,
well the stuff that hasn't been shredded and burnt, so that they could prosecute
Darl "Liar-Liar pants on fire" McBride for something?
The Unix assets sold to SCO would be worth something to Novell - and to IBM.
So how will this play out? Any ideas?[ Reply to This | # ]
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Authored by: Anonymous on Monday, May 11 2009 @ 08:15 PM EDT |
can they delay things more with an appeal?
Note that I said when, not if.
[ Reply to This | # ]
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Authored by: nola on Monday, May 11 2009 @ 09:38 PM EDT |
I've said it before - I'll say it again.
Money now is immaterial.
Access to the records is critical. There must be no way that SCO's details
disappear into the shredder - electronic or otherwise.[ Reply to This | # ]
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Authored by: red floyd on Monday, May 11 2009 @ 10:00 PM EDT |
Neither IBM nor Novell is mincing any words in these
filings.
IBM: In the more than 19 months since the Debtors filed
these Chapter 11 cases, they have squandered
cash...
Novell:In the 19 months since they filed these
cases, debtors and debtors
in possession The SCO Group, Inc. (“SCO”), and its
operating subsidiary, SCO Operations, Inc.
(“Operations” and, together with SCO,
the “Debtors”), have lost millions of dollars and
prejudiced the payment
prospects for their creditors by making one ill-considered and futile step
after
another in their single-minded pursuit of what they believe to be a big payday
in litigation
against Novell, IBM Corporation (“IBM”) and others. It is time to
shut down the Debtors’
highly-unprofitable operations and place a reliable
neutral in charge of making thoughtful
decisions that are in the best interests
of creditors (and even, if there is anything left for them, the
Debtors’
shareholders).
Both parties are retaining form, with IBM getting in
a few shots sideways, while Novell goes full broadside. In any case, were I
Darl, I'd be saying "OUCH!"--- I am not merely a "consumer" or a
"taxpayer". I am a *CITIZEN* of the United States of America.
[ Reply to This | # ]
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Authored by: The Mad Hatter r on Monday, May 11 2009 @ 10:04 PM EDT |
Monopoly money to be precise.
My thanks to Parker Brothers for an enjoyable game.
---
Wayne
http://crankyoldnutcase.blogspot.com/
[ Reply to This | # ]
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Authored by: bezz on Monday, May 11 2009 @ 11:02 PM EDT |
Which do you like? I like a well made cake and consider the icing nothing more
than sugary sweetness. But they go together sooooo well.
The US Trustee is
the cake and Novell / IBM filings are just the complementary icing. IBM and
Novell distill SCO's actions down to the essence. Here is the citrus zest in
the icing:
The Debtors have managed to keep the
litigation alive, it is true, litigation that might some day benefit the
creditors (although the Debtors’ loss to Novell at trial bodes ill for them
whatever they may say about their hopes on appeal). But the preservation of the
litigation could have been done in a chapter 7 case from the outset just as well
but without the severe deterioration in the Debtors’ finances that has prevailed
in the 19 months of these cases. A chapter 11 case was not essential to the
litigation then, and it is even less so now. All the chapter 11 has done is
allow the Debtors’ management to keep the Debtors’ in control of the litigation
by sacrificing every other prospect of financial benefit for the
creditors.
There is more discussion of the litigation in IBM
and Novell's filings, but that comment is the one that kicks this case out of
Chapter 11 into Chapter 7, even if SCO's actions were not enough.
Give the
US Trustee and judge a break. SCO has paid its bills and still has cash so
there was not a reason to convert them. Novell and IBM are here laying out all
the reasons SCO has failed to meet the standards of Chapter 11 and no longer
deserve the protection.
Lemon cake meet citrus zest icing. [ Reply to This | # ]
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Authored by: Anonymous on Monday, May 11 2009 @ 11:09 PM EDT |
Like witch on which water was spilled in The Wizard of Oz shrieked, "I'm
melting! I'm melting. I'm mel...... glug."
Wow, this will be a thrilling finish to years of litigation.[ Reply to This | # ]
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Authored by: edfair on Monday, May 11 2009 @ 11:34 PM EDT |
Seems to be a rather short list. Surely there have to be more that hold the
stock in their name.
No McBride. No Tibbets. Granted I didn't look too closely but those would have
stood out.
---
Ed Fair -- the "Over-the-hill" one[ Reply to This | # ]
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Authored by: grundy on Monday, May 11 2009 @ 11:49 PM EDT |
The Equity Security Service List has 402 entries.
Several Yarros, one Mott, a few Funds, an endowment, a lot of trustees of minors
and other relatives and several non-US residents are included in the list. To me
it appears to be almost all small investors from the general public.[ Reply to This | # ]
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Authored by: Gringo on Tuesday, May 12 2009 @ 12:12 AM EDT |
One key that differentiates Novell's brief from both
IBM's and the trustee's
is that Novell comes right out and
calls SCO's management incompetent,
committing "Gross
mismanagement of the estate"
"...Debtors are likely
to continue to lose money, both
because their business is weak and because
their
management’s judgment is unlikely to improve..." [ Reply to This | # ]
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Authored by: webster on Tuesday, May 12 2009 @ 01:15 AM EDT |
Now that SCO has exhausted their exclusivity period, Novell and IBM have
finally moved themselves to suggest the obvious --Chapter 7. That's a big step
that would change the bargainer for SCO --a bargainer who won't care about FUD.
What can this mean? - Is this something SCO and/or the PIPE Fairy feel
they have to avoid at great new cost? Will we see an infusion of cash to
prevent Chapter 7? Why not? If it was worth so many millions before, why not a
few million more now to keep it going, avoid exposure and embarassment? A
favorable appeal decision may pop up any day, raising SCO's prospects and price.
It's worth some small millions possibly.
- The appeal has two
faces. SCO sees the threat of a jury trial with Novell. Can a jury really
decide what the amendment says better than Judge Kimball or the Appeals panel,
or the Appeals Court en banc, or SCOTUS, or SCOTUS en banc? The Novell jury
trial will mostly be about copyrights. The best they can conclude is that the
parties thought they agreed. SCO won the copyrights that they needed but never
specified them. That's as far as the most favorable appellate judge goes.
There will be appeals from this trial, too. All that SCO will win in a few more
years is a chance to go against IBM with fewer defenses against them. There are
still plenty left.
- Specificity continues to bedevil SCO.
They couldn't specify their proposed deals to the bankruptcy court. They
couldn't specify the copyrights they needed for their UNIX business. Indeed,
they carried on the business just fine without the copyrights. Indeed specifics
hurt them such as the excluded assets of the APA. SCO lawyers know specifically
how to acquire and convey copyrights, and this they didn't do. They may get
their appeal wish and put the APA as amended before the jury. It still may not
win them any copyrights. THey may win just an amended Summary Judgment
--interpretation but still no copyrights
- Endless litigation
costs continue to bedevil Novell and IBM. Maybe they figure if it wasn't SCO,
it would just be someone else. The prospect of an adverse appeal guarantees
more cost and waiting unless Chapter 7 short circuits it all. They could make a
deal with the trustee. He can give them what SCO can't --the benefit of a
decision. It would be worth a few million.
- The wildcard will be
the SCO trustee. Fortunately they only have to know bankruptcy --not the
litigation history-- to get the matter settled. He will set a magic number and
get it resolved.
It will be a shame if some of it get's back
to SCO, even worse if the assets go to some other
FUDsters.
~webster~
Tyrants live
their delusions.
Beware. Deal with the PIPE
Fairy and you will sell your soul.
[ Reply to This | # ]
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Authored by: Ian Al on Tuesday, May 12 2009 @ 04:32 AM EDT |
The list attached to the IBM motion is incomplete. At the very least it is
missing,
Mr. & Mrs. Bagholder of Redmond, WA.
---
Regards
Ian Al
Linux: Viri can't hear you in free space.[ Reply to This | # ]
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Authored by: elderlycynic on Tuesday, May 12 2009 @ 06:16 AM EDT |
The main argument that SCO will use is that these motions
should be suspended until the appeal reverses the judgement.
[ Reply to This | # ]
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Authored by: DaveJakeman on Tuesday, May 12 2009 @ 06:27 AM EDT |
Novell asks for Chapter 7 conversion, or in the alternative, for a Chapter 11
trustee to be appointed.
So Novell are mainly interested in getting the SCO clown management kicked out.
Having a Chapter 11 trustee is an interesting alternative. I wonder what could
be achieved with SCO the company, by capable management with the right attitude?
---
Monopolistic Ignominious Corporation Requiring Office $tandard Only For
Themselves[ Reply to This | # ]
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Authored by: DaveJakeman on Tuesday, May 12 2009 @ 06:51 AM EDT |
Novell repeatedly refer to the word "fiasco" -- a word quoted from a
hearing transcript, uttered by SCO's counsel in describing prior SCO failure(s)
in getting a reorganisation plan together. Novell make quite a point of it, but
consistently get the capitalisation wrong.
:)
Lawyer humour is necessarily subtle.
---
Monopolistic Ignominious Corporation Requiring Office $tandard Only For
Themselves[ Reply to This | # ]
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Authored by: jrvalverde on Tuesday, May 12 2009 @ 06:59 AM EDT |
OK, I have a question for you:
Imagine for one moment
you were selected to manage SCO from now on. What kind of plan would you suggest
to maximize SCO profits?
Or put another way, should you as creditor get
some SCO assets, how would you put them to good use to maximize your profit
(minimize your losses)?
Personally, I believe Ransom
Love's approach might have worked if it had survived the adverse waves at the
beginning of the decade: fully open source SCO UNIX (maybe with a GNU/Linux
incompatible open source license to keep differentiation) and build a business
off selling support. Existing customers would have been fidelized, you would
have attracted more corporate customers, geeks and OS programmers and might
still have a chance of survival. It would have open the magic garden for
peering by LINUXers, but all the info was out anyway, and if they embraced SCO's
technology that would work in SCO's favour: "look LINUX hackers mimic out
technology, we are way ahead of them: use our UNIX instead if you want the best.
UNIX, when you care to copy the very best ;-)".
Then, I would
have invested on L4 and related/like technologies to be able to benefit from
LINUX/BSD device drivers, tried to keep ahead of competition on the high end and
ally with Linux, BSD and OpenSolaris to fight MS on the lower end.
At
the very worst that wouldn't have bleeded the company as the litigation has
done, nor would have lost customers as quickly as it has. And it would have a
clean image to offer for an uptake (it might have been bought by Oracle a lot
cheaper than Sun).
Wait, if they had done this, they would have been a
strong ally to undermine MS power. This way they fought their friends and helped
their fiend. How queer that MS adviced Baystar to invest in SCO and encouraged
their litigation approach...
--- Jose R. Valverde
EMBnet/CNB [ Reply to This | # ]
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Authored by: DaveJakeman on Tuesday, May 12 2009 @ 07:08 AM EDT |
From Novell:
22. Astonishingly, the Debtors denied these losses
even though the Debtors themselves
have reported them in their Monthly Operating
Reports (“MOR”). Its counsel claimed that, “I’m
assured by Mr. McBride very
recently that the company on an operating basis . . .is in the black.
It’s the
reorganization expenses overlay that makes it a loss.” (3/30/09 Tr.
45:18-21.)
SCO are in the black. What they just
don't admit to is that their accountant is
colour-blind.
--- Monopolistic Ignominious Corporation Requiring Office
$tandard Only For Themselves [ Reply to This | # ]
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Authored by: DaveJakeman on Tuesday, May 12 2009 @ 08:03 AM EDT |
Novell's arguments are all very plausible, suggesting that Chapter 7 conversion,
or at least the appointment of a Chapter 11 trustee is inevitable for SCO, but
what's wrong with this?
In the first instance, SCO used voluntary Chapter 11 protection to escape their
"Day in Court" before Kimball and have since been allowed to drag out
their bankruptcy protection -- which they have been using and abusing -- for 19
months before Novell filed this motion. Many of Novell's arguments would have
equally applied six months or a year ago. I'm sure Novell haven't filed
"late", but have filed for conversion at the earliest opportunity they
felt their motion would fly. So what's wrong with this?
There is a common thread we've seen from the outset of SCO's litigation campaign
in various courtrooms: too much rope.
---
Monopolistic Ignominious Corporation Requiring Office $tandard Only For
Themselves[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, May 12 2009 @ 08:08 AM EDT |
The shareholder list has 402 names. Most of these are individuals whom I
won't list here. Some names are listed more than once under different addresses,
so there are somewhat less than 400 unique shareholders. The names of interest
are:
Institutional
Investors:
- Goldman Sachs & Co FBO Amtrust
International Insurance.
- Chesapeake Partners International Ltd
- Chesapeake Partners Limited Partnership
- Eton Park Fund LP
C/O Eton Park Capital Management LP
- Eton Park Master Fund Ltd C/O
Citco Fund Services (Cayman Islands) Limited
- Guggenheim Portfolio
Company VII LLC
- Jet Capital Investors LP
- Scoggin Capital
Management LP II
- Scoggin International Fund Ltd C/O Swiss Financial
Services
That is a total of half a dozen
institutional investors. There is no indication of how many shares they
hold.
Other Investors of
Note:
- Boy Scouts of America Ut National Prks
Council Endow Fu
- Alan Petrofsky
- Sophos Inc
Sophos is a software company that sells anti-virus
and other security software, although they have other products as well. It is
possible that they have a minor shareholding due to some business deal with SCO
in the past.
Alan Petrofsky is a shareholder.
I would not be
surprised if "Boy Scouts of America" received their shares as a donation.
Someone may have decided this was a good way to dispose of a bad
investment.
SCO Insiders:
- Ralf
J Yarro (three different addresses)
- The SCO Group Treasury Account
The SCO Group has shares in its treasury account,
which is normal. The only SCO insider name on the list that I recognised was
Ralf Yarro. No one else. You would think that if Darl McBride and the other
managers really had faith in SCO's future, they would be buying up shares by the
bucket full while they could get them cheap. Perhaps they know something that
the other shareholders don't.
[ Reply to This | # ]
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Authored by: IMANAL_TOO on Tuesday, May 12 2009 @ 08:14 AM EDT |
:)
From document 753:
And we promise -- we promise
we won’t file it in pieces
anymore.” (4/2/08 Tr. 9:2-5 (emphasis
added).) The Debtors repeated this commitment at the
third exclusivity motion
hearing a half year later, stating, “We promised Your Honor that
we
wouldn’t come in again with a half-baked or quarter-baked plan. We
would make sure
everything is there.” (Transcript of September 16,
2008 (“9/16/08 Tr.”) 96:24-97:1 (emphasis
added).)"
I
promise you, I smiled when I read that. Promising prom queens or fully-fledged
divas?
.
--- ______
IMANAL
. [ Reply to This | # ]
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Authored by: Anonymous on Tuesday, May 12 2009 @ 11:54 AM EDT |
I noticed a considerable number of errors in the list. Midland, Italy, I
suspect its Milano. Swedan instead of Sweden, Sheldon instead of Sheatland
amongst many others. It seems to me more than simply random. If this were
intentional would anybody care to guess who benefits from this? [ Reply to This | # ]
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