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SCO Files MORs for September in the Bankruptcy |
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Monday, November 08 2010 @ 08:12 PM EST
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SCO is apparently almost out of money, according to the MORs they just filed for September in the bankruptcy. Maybe that's the explanation for SCO's sudden desire to expedite the appeal after initially asking for more time to even file its brief. Unless they have a buyer, I wonder if they can even last until January, when the appeal is scheduled to be heard. SCO Operations shows a negative cash flow, and only $738,090 in the bank. Total disbursements for the month were more than that, $886,656 of which $409,902 was for professional fees. At the end of August, SCO showed cash at the end of the month in the amount of $1,369,642, with a positive cash flow, and only $397,344 in disbursements. I gather they were behind, perchance, on paying professionals?
Here they are, the filings:
11/08/2010 - 1195 - Debtor-In-Possession Monthly Operating Report for Filing Period As of 9/30/10 (The SCO Group, Inc.; 07-11337) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Attachments: # 1 Certificate of Service) (Fatell, Bonnie) (Entered: 11/08/2010)
11/08/2010 - 1196 - Debtor-In-Possession Monthly Operating Report for Filing Period As of 9/30/10 (SCO Operations, Inc.; 07-11338) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Attachments: # 1 Certificate of Service) (Fatell, Bonnie) (Entered: 11/08/2010)
The other big payment was almost $200,000 to the subsidiaries not in bankruptcy.Page 20 shows a "Summary of Unpaid Post Petition Debts". Yarro's loan is listed, of course, at $2,110,299, but so are taxes, wages, and accounts payable, and "other post petition liabilities ($2,855,732), total $6,651,161. This footnote explains the "other" liabilities: (A)
Other post petition liabilities is comprised of Intercompany payables, deferred revenues under GAAP to be recognized into income
over future periods, and general accruals under GAAP such as coop advertising, royalties expense. The Deferred revenues are amortized
monthly into revenue. The Intercompany payables represents cash transactions between the company and its affiliates for collection of
revenues, offset by payment of operating expenses and payroll and other transactions under the Agency Agreements. General accruals are
accruals based upon estimates to which specific identified vendors are not known. Intercompany payables represent 47% of Other
Post petition liabilities with Deferred revenues representing 25%, Accrued Chapter 11 Fees representing 15% and general accruals
representing 3% of Other Post petition liabilities. For a detail listing of the make up of theses amounts see " FORM MOR-3 (CONT'D) in the
MOR package.
Yes, it says "theses".
I really don't understand the court allowing this to go on and on, leaving the creditors with no hope that I can see, while the "professionals" clean up. SCO could have paid everybody on the creditor list when it first filed for bankruptcy protection in September of 2007. So what exactly is the protection? All the money went to pay professionals instead of creditors. Or so it looks to this observer. Why? To what end?
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Authored by: bugstomper on Monday, November 08 2010 @ 08:18 PM EST |
Please summarize the correction in the Title box for easy scanning:
error->correction or s/error/correction/
[ Reply to This | # ]
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Authored by: bugstomper on Monday, November 08 2010 @ 08:20 PM EST |
Please stay off topic in these threads, Use HTML Formatted mode to make your
links clickable - That's why they call it the World Wide Web!
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Authored by: bugstomper on Monday, November 08 2010 @ 08:22 PM EST |
Pick your News here. Remember to include the title of the article you are
commenting on in the Title box of your comment and also to include a clickable
HTML link to the article inside your comment, for when it scrolls off the
sidebar.[ Reply to This | # ]
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Authored by: bugstomper on Monday, November 08 2010 @ 08:25 PM EST |
Comes transcripts here if you have any to contribute. Please include HTML markup
but post it in Plain Old Text mode to make it easy for PJ to copy and paste
them.
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Authored by: tiger99 on Monday, November 08 2010 @ 08:41 PM EST |
It would seem that they will be in Chapter 7 before the appeal, unless I am
misunderstanding the figures. Or, another PIPE Fairy needs to appear within the
next few weeks. It almost looks as if Cahn has planned for the money to run
out before the appeal, but I think the truth is more complex than that, based on
past history of SCO. Three years in Chapter 11, with no reorganisation and
seemingly no sale. Just delay and more delay, and a jury trial that Cahn must
have known was not winnable. It is all very suspicious, even more so as the
money runs out.... [ Reply to This | # ]
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Authored by: tinkerghost on Monday, November 08 2010 @ 08:46 PM EST |
Given that the creditors have been scammed out of their payments, who exactly do
they sue over this fiasco? It certainly seems like Cahn & the entire
Delaware court system has failed in their duties to deal fairly.
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You patented WHAT?!?!?![ Reply to This | # ]
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Authored by: stats_for_all on Monday, November 08 2010 @ 08:53 PM EST |
Cash should be further reduced by: the current Novell royalty liability
($184K) and the $88K payroll account.
SCO has transfered the Novell
liability from Japan accounts to Utah. It does this in preparation for its
payment to Novell historically (with a 1 month lag), so the payment was likely
made at SCO end of fiscal year in October.
Oct. 1 fell on a Friday, and
payroll was likely paid on that day. In most months, the payroll account is
held at 0 or a negative 3,000 balance, the 88K in the September payroll bank is
strictly transitory.
The three-month aggregate for receipts has dropped to
1,149. This put the annualized income below 5 Million/year for the first time.
At the time of the original BK filing, income was about 17 M/year.
SCO paid
OPA a round 90K on its outstanding invoices. This does not correspond to the
invoices with CNO filings (made July 21st), so SCO is paying on the invoice in
installments.
SCO is now up-to-date on Blank Rome invoices. The Jan-Feb 2010
invoice had a CNO filing July 21. NO further billing has been made by Blank
Rome. The have filed NO bills for March, April, May, June, July, August,
September, or October. The Blank Rome bills for 2010 will render SCO insolvent
when they are finally released.
Blank Rome's reluctance to file it bills in
a timely fashion has allowed SCO to survive. Obviously Blank Rome believes it
can recoup its "investment" through a quick sale of SCO assets. This is proving
difficult, as it appears there is a distinct dearth of qualified buyers. [ Reply to This | # ]
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Authored by: UncleJosh on Monday, November 08 2010 @ 09:43 PM EST |
Notably various Airlines that have gone bankrupt giving their stock holders and
creditors nothing and throwing their retirees on the mercies of the Pension Guaranty Corporation, which typically
means a significant reduction in benefits. The US Airways pilot of the "miracle
on the Hudson" to Congress: "my pay has been cut 40 percent in recent years, my
pension terminated". [ Reply to This | # ]
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Authored by: AntiFUD on Monday, November 08 2010 @ 10:18 PM EST |
Isn't it about time PST that we get a report from San Francisco? It is still
November 8th after all!
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IANAL - Free to Fight FUD - "to this very day"
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Authored by: kawabago on Monday, November 08 2010 @ 11:01 PM EST |
If other companies behaved as SCO does the system would collapse. SCO has been
abusing the system from the start so it should not be surprising that it is
abusing the bankruptcy process. It is surprising that the trustee is continuing
the abuse of process but maybe Darl damaged the company so severely he had no
other choice but keep the pipe dream alive. If you're a train, all you can do is
follow the tracks till you derail.[ Reply to This | # ]
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Authored by: nsomos on Monday, November 08 2010 @ 11:30 PM EST |
I believe there is something ODD going on with the Accounts payable aging for
SCO.
I noticed that the 61-90 day column seems to always be zero.
Any given
unpaid bill is either current, or is overdue by some amount.
Unpaid bills either
get paid, or if they remain unpaid, the bills age.
So for any given MOR, an
unpaid bill should be in one of the columns.
For a subsequent months MOR, if
this bill remains unpaid, it would typically
be reflected in the total for next
column over.
So here is the inconsistency I noted. How can from one month
to the
next, the over 90 column increase, when there has never been
anything
reflected in the 61-90 day column. Bills don't magically become
over
90 days past due, without first progressing through 0-30, 31-60,
and 61-90.
Accounts Payable aging for SCO MORS over time
current __0-30
__ 31-60 61-90 _ over 90 ?? total __ period end
_52,772 _34,257 _12,447 __-__ 1,082,287 _ 1,181,763
12-31-09
598,588 _32,409 __5,066 __-__ __719,958 _
1,356,021 1-31-10
234,250 525,896 __6,164 __-__
__674,987 _ 1,441,297 2-28-10
169,384 _60,897 118,527
__-__ __630,386 _ __979,194 3-31-10
327,576
_75,830 _25,683 __-__ __685,842 * 1,114,931 4-30-10
214,127 _60,002 152,714 __-__ __729,461 * 1,156,304
5-31-10
_17,550 127,185 104,955 __-__ __998,849 *
1,248,539 6-30-10
100,098 _13,881 _87,263 __-__
1,364,692 * 1,565,934 7-31-10
_54,760 _98,713 __3,890
__-__ 1,364,078 _ 1,521,441 8-31-10
_44,174
_41,033 __8,713 __-__ 1,022,732 _ 1,116,652 9-30-10
sources ...
http://www.groklaw.net/pdf2/SCOGBK-1080.pdf for 12-31-09
http://www.groklaw.net/pdf2/SCOGBK-1082.pdf for
1-31-10
http://www.groklaw.net/pdf2/SCOGBK-1101.pdf for
2-28-10
http://www.groklaw.net/pdf2/SCOGBK-1119.pdf for
3-31-10
http://www.groklaw.net/pdf2/SCOGBK-1132.pdf for
4-30-10
http://www.groklaw.net/pdf2/SCOGBK-1135.pdf for
5-31-10
http://www.groklaw.net/pdf2/SCOGBK-1144.pdf for
6-30-10
http://www.groklaw.net/pdf2/SCOGBK-1175.pdf for
7-31-10
http://www.groklaw.net/pdf2/SCOGBK-1181.pdf for
8-31-10
http://www.groklaw.net/pdf2/SCOGBK-1196.pdf for
9-30-10
There is a period of four months, where the over 90 day
column
has increased compared to the previous month. I have noted
the second
of these month pairs with an asterisk in the chart.
(somehow the tt tag does not
seem to work as I would expect,
so I have used underbars _ to make the chart at
least line up
if not look ok)
Would any of those with accounting skills care
to comment?
[ Reply to This | # ]
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Authored by: SpaceLifeForm on Tuesday, November 09 2010 @ 12:30 AM EST |
Delay from Lanham Act counterclaims.
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You are being MICROattacked, from various angles, in a SOFT manner.[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, November 09 2010 @ 05:58 AM EST |
I really don't understand the court allowing this to go
on and on, leaving
the creditors with no hope that I can
see, while the "professionals" clean
up.
It makes perfect sense to me. The "professionals" are just
that -
they do this for a living - extracting money from
companies in bankruptcy. Of
course, the more the
professionals extract for themselves, the less there is
for
the original creditors. It looks like in this case, the
professionals are
doing a very efficient job - they get all
the money and the creditors get none.
A perfect score,
unless you're a creditor in which case you're not important
anyway.
SCO could have paid everybody on the creditor list when
it
first filed for bankruptcy protection in September of
2007 But then the
professionals would not have got
much. It's hardly a good result for them, is
it?
So what exactly is the protection? It's the
justification the
professionals use for retaining the legal
power to do this kind of work.
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Authored by: Anonymous on Tuesday, November 09 2010 @ 02:44 PM EST |
So, just like the junior league quarterback who casually
walked right through the opposing defense with the ball in
hand this week and then ran once he was out of reach, this may
be a bald faced statement of fact: We made up some theses as
to what these amounts are that make up post petition
liabilities and we present those theses to you in "form FORM
MOR-3 (CONT'D) in the MOR package" for your consideration and
hopefully, bafflement, so that we can then pull something that
you weren't expecting if you let us get away with this.
While we have frequently wondered why they do things the way
they do it has very often turned out that it had a motive and
resultant effect that was as juicy and black as a rotten berry
that had yet to fall off the vine, taking us by surprise when
we found out what was rally there.
We can't even trust them to be reliably stupid because they
pull stunts like this so often along with the actual mistakes
they have made along the way.
YMMV (Yes, "misstatements" mask villainy)[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 10 2010 @ 01:19 AM EST |
These MORs should not be accepted by the Court because they still contain, on
the second page headed DISCLAIMER, the following disclaimer:
As the
Trustee and its financial advisors have not had sufficient time to review all of
the historical information previously reported by the Debtors, the Trustee
reserves the right to amend these Monthly Operating Reports
In
other words, these reports don't really mean anything. Cahn can come back and
replace any or all of them, going back as far as he likes. The excuse, that more
than a year is not sufficient time to review SCO's finances, is ridiculous.
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Authored by: hopethishelps on Wednesday, November 10 2010 @ 01:41 AM EST |
PJ, please either stop commenting on SCO's financial condition, or get an
accountant to review what you write. If we can believe these MORs, SCO was
profitable in September. Not only can they "last until January", they appear to
be earning money - which, if continued, would enable them to pay of creditors
(very, very slowly) and emerge from bankruptcy.
The relevant information
is the Statement of Operations which is near the end of document 1195. To assess
whether a business is profitable, you have to look at an income statement
prepared on an accrual basis. The cash flows which you always focus on are
important but they tell you nothing about the profitability of the underlying
business.
I have to say I am astonished that SCO still has customers. And
the unusual amount of receivables more than 90 days old (i.e. more than 2 months
past due) makes me wonder whether sufficient allowance has been made for
"doubtful accounts" (i.e. customers who will never pay). But if you believe
these MORs, SCO has a viable business as of now. [ Reply to This | # ]
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Authored by: Anonymous on Wednesday, November 10 2010 @ 03:46 AM EST |
The real question from my point of view is the division of funds between SCO in
US and the rest of the world.
Suppose you are involved in court cases when there is a real possibility that
you could end up paying rediculous amounts of money. What would you answer when
you must decide if a certain object belong to you or a foreign part of the
company. The honest way of doing is of course follow the spent money and not
start doing "good-will" transfers of objects...if you are not so
honest then there are possibilities to hid values from upcoming chapter 7.
I think that Cahn include the disclamer because he honestly does know if SCO of
the past has been involved in such shady affairs, but he want to keep his back
clear in case there turn out to be criminal conduct done. [ Reply to This | # ]
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