decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books

Gear

Groklaw Gear

Click here to send an email to the editor of this weblog.


You won't find me on Facebook


Donate

Donate Paypal


No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster
Blank Rome Files 8 Bills For a Little More Than Half a Million Dollars and LeapTide and Yarro Make an Appearance - Updated
Saturday, May 14 2011 @ 01:28 PM EDT

Now that most of the assets are in the hands of unXis, and Chapter 7 has been avoided, Blank Rome finally files all its bills, 8 of them, from August of 2010 through the end of March of 2011. Smooth. The bills add up to a little over a half a million, plus expenses.

And LeapTide and Yarro make an appearance, with their lawyers filing as their representative, one in Delaware and another pro hac vice from New York. I think they are serious, as this paragraph may foreshadow:

This Notice of Appearance of proposed counsel, and any subsequent appearance, pleading, claim or suit is not intended nor shall be deemed to waive the interested party’s (i) right to have final orders in noncore matters entered only after de novo review by a district court judge; (ii) right to have the reference withdrawn by the United States District Court in any matter subject to mandatory or discretionary withdrawal; or (iii) other rights, claims, actions, defenses, setoffs or recoupments the interested party is or may be entitled under agreements, at law, or in equity, all of which rights, claims, actions, defenses, setoffs, and recoupments expressly are hereby reserved.
This is going to be the fun part, I suspect. Not for them, of course. But for us, who have been so patiently waiting all these years for the end game.

Here are all the filings:

05/12/2011 - 1272 - Monthly Application for Compensation of Blank Rome LLP, Counsel to the Chapter 11 Trustee of SCO Group, Inc., et al., for the period August 1, 2010 to August 31, 2010 Filed by Blank Rome LLP. Objections due by 6/2/2011. (Attachments: # 1 Notice # 2 Attachment B # 3 Exhibit A # 4 Exhibit B) (Tarr, Stanley) (Entered: 05/12/2011)

05/12/2011 - 1273 - Monthly Application for Compensation of Blank Rome LLP, Counsel to the Chapter 11 Trustee of SCO Group, Inc., et al., for the period September 1, 2010 to September 30, 2010 Filed by Blank Rome LLP. Objections due by 6/2/2011. (Attachments: # 1 Notice # 2 Attachment B # 3 Exhibit A # 4 Exhibit B) (Tarr, Stanley) (Entered: 05/12/2011)

05/12/2011 - 1274 - Monthly Application for Compensation of Blank Rome LLP, Counsel to the Chapter 11 Trustee of SCO Group, Inc., et al., for the period October 1, 2010 to October 31, 2010 Filed by Blank Rome LLP. Objections due by 6/2/2011. (Attachments: # 1 Notice # 2 Attachment B # 3 Exhibit A # 4 Exhibit B) (Tarr, Stanley) (Entered: 05/12/2011)

05/12/2011 - 1275 - Monthly Application for Compensation of Blank Rome LLP, Counsel to the Chapter 11 Trustee of SCO Group, Inc., et al., for the period November 1, 2010 to November 30, 2010 Filed by Blank Rome LLP. Objections due by 6/2/2011. (Attachments: # 1 Notice # 2 Attachment B # 3 Exhibit A # 4 Exhibit B) (Tarr, Stanley) (Entered: 05/12/2011)

05/12/2011 - 1276 - Monthly Application for Compensation of Blank Rome LLP, Counsel to the Chapter 11 Trustee of SCO Group, Inc., et al., for the period December 1, 2010 to December 31, 2010 Filed by Blank Rome LLP. Objections due by 6/2/2011. (Attachments: # 1 Notice # 2 Attachment B # 3 Exhibit A # 4 Exhibit B) (Tarr, Stanley) (Entered: 05/12/2011)

05/13/2011 - 1277 - Notice of Appearance Filed by Leap Tide Capital Management, Inc.. (Klein, Julia) (Entered: 05/13/2011)

05/13/2011 - 1278 - Motion to Appear pro hac vice of Edward E. Neiger, Esq.. Receipt Number DEX010453, Filed by Leap Tide Capital Management, Inc.. (Klein, Julia) (Entered: 05/13/2011)

05/13/2011 - 1279 - Monthly Application for Compensation of Blank Rome LLP, Counsel to the Chapter 11 Trustee of SCO Group, Inc., et al., for the period January 1, 2011 to January 31, 2011, Filed by Blank Rome LLP. Objections due by 6/2/2011. (Attachments: # 1 Notice # 2 Attachment B # 3 Exhibit A # 4 Exhibit B) (Tarr, Stanley) (Entered: 05/13/2011)

05/13/2011 - 1280 - Notice of Withdrawal of Docket No. 1277 (related document(s) 1277 ), Notice of Withdrawal of Appearance Filed by Leap Tide Capital Management, Inc.. (Klein, Julia) (Entered: 05/13/2011)

05/13/2011 - 1281 - Notice of Appearance Filed by Leap Tide Capital, as a DIP Lender, and Ralph Yarro, III, as Collateral Agent for the DIP Lenders. (Klein, Julia) (Entered: 05/13/2011)

05/13/2011 - 1282 - Amended Motion to Appear pro hac vice of Edward E. Neiger, Esq.. Receipt Number DEX010453, Filed by Leap Tide Capital, as a DIP Lender, and Ralph Yarro, III, as Collateral Agent for the DIP Lenders. (Klein, Julia) (Entered: 05/13/2011)

05/13/2011 - 1283 - Monthly Application for Compensation of Blank Rome LLP, Counsel to the Chapter 11 Trustee of SCO Group, Inc., et al., for the period February 1, 2011 to February 28, 2011, Filed by Blank Rome LLP. Objections due by 6/2/2011. (Attachments: # 1 Notice # 2 Attachment B # 3 Exhibit A # 4 Exhibit B) (Tarr, Stanley) (Entered: 05/13/2011)

05/13/2011 - 1284 - Monthly Application for Compensation of Blank Rome LLP, Counsel to the Chapter 11 Trustee of SCO Group, Inc., et al., for the period March 1, 2011 to March 31, 2011, Filed by Blank Rome LLP. Objections due by 6/2/2011. (Attachments: # 1 Notice # 2 Attachment B # 3 Exhibit A # 4 Exhibit B) (Tarr, Stanley) (Entered: 05/13/2011)

And here's what Blank Rome is asking for, month by month, remembering that they ask for 80% now plus expenses and hope for the rest someday, hardy har:

Period CoveredFee RequestedExpenses80% of Fees
August 2010 $99,234.00 $1,711.43 $79,387.20
Sept. 2010 $25,311.00 $444.74 $20,248.80
October 2010 $76,249.50 $151.66 $60,999.60
Nov. 2010 $36,272.50 $781.26 $29,018.00
Dec. 2010 $21,166.00 $100.82 $16,932.80
Jan. 2011 $211,969.00 $812.92 $169,575.20
Feb. 2011 $92,819.50 $1,574.06 $74,255.60
March 2011$81,562.00$2,452.16$65,249.60
Total$644,583.50$8,029.05$515,666.80

So, let's see. That's fifteen, carry the one.... wow. Blank Rome says it is owed a total of $652,612.55, if my math is right, and they would like now 80% of the fees and all the expenses paid, for a total of $523,695.85. That's not even counting the bills from Ocean Park. What does SCO still have to left to pay its bills? God only knows, but here are the last monthly operating reports SCO filed as of the end of February, where SCO Operations listed $779,827 in cash in the bank at the end of that month.

I'm thinking after SCO pays Blank Rome and Ocean Park, what will there be left over for Yarro and LeapTide or anyone else? Without all the figures, who can say, but I suspect this might explain their sudden appearance on the scene. I'm thinking this could get interesting.

Wait. You mean... Yarro and the gang did all this for nothing?

Update: Maybe not. If you'd like to review what LeapTide and Yarro got as collateral for the money they loaned SCO, here is where you can find it. If, just saying, if the appeals court were to rule in SCO's favor, three pieces of collateral that come into play potentially would be causes of action, the litigation winnings, should there ever be any, and the commercial tort claims. Here's the list of collateral, once again:

  • Inventory
  • Accounts and Rights (leases, contracts, deeds of trust, collateral assignments, etc.)
  • Equipment and Fixtures
  • General Intangibles, which is defined as bank accounts, causes of action, business records, customer lists, tax refunds, intellectual property, inventions, patents, copyrights, trademarks, etc.
  • Investment Property. Like securities. All voting rights associated with the shares.
  • Bank Accounts.
  • Insurance. All right, title and interest in any policies.
  • Books and Records, including the cabinets and drawers that hold them, and "computer records, lists, and software programs, wherever located".
  • Commercial Tort Claims.
  • Litigation Proceeds.
  • Payment Intangibles. This seems to mean any settlement money or judgments where money flows to SCO.
  • Products and Proceeds. "All products and proceeds of any and all of the foregoing, including, but not limited to, proceeds which constitute property of the types described in the foregoing paragraphs of this Section 2 and, to the extent not otherwise included, all payments under insurance... or any indemnity, warranty or guaranty..."
But as the lawyer for LeapTide pointed out the other day in his letter [PDF] to Cahn, SCO sold its assets to UnXis allegedly without proper notice to the lenders:
I. BREACH OF CREDIT AGREEMENT

Section 5.10(b) of the Credit Agreement authorizes the Debtors to "retain and use fifty percent (50%) of the net proceeds (defined as gross proceeds from one or more Core Asset Sale(s), less the direct and reasonable closing fees and expenses of the sale or license transaction) from any Core Asset Sales and one hundred percent (100%) from the proceeds of the sale of all other SCO assets (excluding the sale of any rights in the Litigation and/or any portion of the Litigation proceeds)," but only with prior written notice to the Lender. Section 5.10(b).

Despite the Debtors' recent sale of substantially all their assets to unXis, Inc., you did not provide such written notice to the Lender.

Here is the Credit Agreement. Now, notice the breakdown in the Exhibit A's attached to each bill. For example, here's Exhibit A [PDF] attached to the March bill. On page two, you'll see the breakdown, and guess where almost all the time went? -- to the sale of the assets, 153 out of a total 168.7 hours that month. So, according to the deal, first you subtract that section of the bill before the lenders get their half of the proceeds. Same story in February [PDF]. A total hours of 199.5, and 168.3 was spent on the sale of assets.

Half of nothing is nothing, eh? But here's my question. When the lenders write that they want the collateral, in view of the breach, do they mean the collateral that is left or do they intend to try to overturn the sale of the assets to unXis?

Update 2: Charles Dickens, Bleak House:

This made us some quarter of an hour late, and when we came to Westminster Hall we found that the day's business was begun. Worse than that, we found such an unusual crowd in the Court of Chancery that it was full to the door, and we could neither see nor hear what was passing within. It appeared to be something droll, for occasionally there was a laugh and a cry of "Silence!" It appeared to be something interesting, for every one was pushing and striving to get nearer. It appeared to be something that made the professional gentlemen very merry, for there were several young counsellors in wigs and whiskers on the outside of the crowd, and when one of them told the others about it, they put their hands in their pockets, and quite doubled themselves up with laughter, and went stamping about the pavement of the Hall.

We asked a gentleman by us if he knew what cause was on. He told us Jarndyce and Jarndyce. We asked him if he knew what was doing in it. He said really, no he did not, nobody ever did, but as well as he could make out, it was over. Over for the day? we asked him. No, he said, over for good.

Over for good!

When we heard this unaccountable answer, we looked at one another quite lost in amazement. Could it be possible that the will had set things right at last and that Richard and Ada were going to be rich? It seemed too good to be true. Alas it was!

Our suspense was short, for a break-up soon took place in the crowd, and the people came streaming out looking flushed and hot and bringing a quantity of bad air with them. Still they were all exceedingly amused and were more like people coming out from a farce or a juggler than from a court of justice. We stood aside, watching for any countenance we knew, and presently great bundles of paper began to be carried out—bundles in bags, bundles too large to be got into any bags, immense masses of papers of all shapes and no shapes, which the bearers staggered under, and threw down for the time being, anyhow, on the Hall pavement, while they went back to bring out more. Even these clerks were laughing. We glanced at the papers, and seeing Jarndyce and Jarndyce everywhere, asked an official-looking person who was standing in the midst of them whether the cause was over. Yes, he said, it was all up with it at last, and burst out laughing too....

"Pray what has been done to-day?" asked Allan.

"I beg your pardon?" said Mr. Kenge with excessive urbanity.

"What has been done to-day?"

"What has been done," repeated Mr. Kenge. "Quite so. Yes. Why, not much has been done; not much. We have been checked—brought up suddenly, I would say—upon the—shall I term it threshold?"

"Is this will considered a genuine document, sir?" said Allan. "Will you tell us that?"

"Most certainly, if I could," said Mr. Kenge; "but we have not gone into that, we have not gone into that."

"We have not gone into that," repeated Mr. Vholes as if his low inward voice were an echo.

"You are to reflect, Mr. Woodcourt," observed Mr. Kenge, using his silver trowel persuasively and smoothingly, "that this has been a great cause, that this has been a protracted cause, that this has been a complex cause. Jarndyce and Jarndyce has been termed, not inaptly, a monument of Chancery practice."

"And patience has sat upon it a long time," said Allan. "Mr. Kenge," said Allan, appearing enlightened all in a moment. "Excuse me, our time presses. Do I understand that the whole estate is found to have been absorbed in costs?"

"Hem! I believe so," returned Mr. Kenge. "Mr. Vholes, what do YOU say?"

"I believe so," said Mr. Vholes.

"And that thus the suit lapses and melts away?"

"Probably," returned Mr. Kenge. "Mr. Vholes?"

"Probably," said Mr. Vholes.


  


Blank Rome Files 8 Bills For a Little More Than Half a Million Dollars and LeapTide and Yarro Make an Appearance - Updated | 167 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
And just when it was getting exciting again! N/T
Authored by: joef on Saturday, May 14 2011 @ 01:37 PM EDT
.

[ Reply to This | # ]

What's left
Authored by: DMF on Saturday, May 14 2011 @ 01:51 PM EDT
As far as I can tell, there may not be any cash, but Yarro et cabal get the
litigation rights which they can pursue until the light finally dawns. He must
think there's still a chance of .. PROFIT! .. or he'd have cut his losses
already.

I wonder if the Boies Schiller "we're paid in full" deal is still in
effect?

[ Reply to This | # ]

What is the end game about?
Authored by: maroberts on Saturday, May 14 2011 @ 01:56 PM EDT
As far as I can see, there is nothing to fight over, unless some of the
assignation of assets can be reversed somehow.

I'm also lost as to why Yarro poured more money into the SCO rabbit hole.

When this started, the issues were obvious, but now I honestly haven't got a
clue what's going on and who is left with what. SCO seems to have become
something akin to the Cheshire Cat in Alice in Wonderland, except all that is
left in this case is not a smile, but an offensive odor.

[ Reply to This | # ]

Corrections thread
Authored by: ais523 on Saturday, May 14 2011 @ 01:57 PM EDT
Just in case PJ has made a mistake. Put the mistake and its correction in the
title of your post, so people can quickly tell what it is.

[ Reply to This | # ]

News Picks thread
Authored by: ais523 on Saturday, May 14 2011 @ 02:09 PM EDT
For discussing the links in the sidebar on the main page. It may be a good idea
to repeat the links anyway, so that once the news pick you want to talk about
has scrolled off the front page, people still know what you were talking about.

[ Reply to This | # ]

Off Topic thread
Authored by: ais523 on Saturday, May 14 2011 @ 02:20 PM EDT
Post here if you want to talk about something that might be on topic for Groklaw
in general, but has nothing to do with this article in particular. If you want
to add links, make sure you change over to HTML mode; there are instructions for
making them clickable just below the post mode box.

[ Reply to This | # ]

Blank Rome Files 8 Bills For Half a Million; LeapTide and Yarro Pay Lawyers to Block Them
Authored by: webster on Saturday, May 14 2011 @ 02:29 PM EDT
.

This is like the joke with the doctor, priest, and a lawyer in the lifeboat
except here it is two lawyers and no courtesy.

You can be sure that Yarro and LeapTide are paying these lawyers. They would
not take such a case on contingency fee.

Yarro wants it all. He is upset with Cahn for going through the motions and
running up the bills. Obviously Yarro had plans and deals ready all along.
Cahn wasted time and effort on due diligence that wasn't necessary. There was
going to be no settlement and no better deal other than Yarro and other SCO
insiders. Cahn caused Yarro to make this loan to forestall a settlement or do a
fair auction for all rights such as they are.

Gross has to support his trustee and former Chief Judge, Cahn. Yarro will
appeal from Gross.

They are going to consume more in time than they are fighting over. Lawyers
will fight for fees to make the other side at least burn it to win it.

.

[ Reply to This | # ]

Blank Rome Files 8 Bills For a Little More Than Half a Million Dollars and LeapTide and Yarro Make an Appearance
Authored by: Oliver on Saturday, May 14 2011 @ 02:55 PM EDT
Surely no end game in sight until IBM gets their "Day in
court" and we get the ruling that Linux doesn't infringe
anything.

[ Reply to This | # ]

[COMES] Comes v. MS transcripts
Authored by: Aladdin Sane on Saturday, May 14 2011 @ 04:02 PM EDT
Comes docs here.

---
Well, it's either Captain Kirk or Doctor Strangelove. —me, ca. 1984-1985

[ Reply to This | # ]

Someone is missing
Authored by: Anonymous on Saturday, May 14 2011 @ 10:02 PM EDT
Where is the U.S. Trustee, he has been AWOL for sometime now. Do you think we
need to put his picture on some milk cartons?
bobm

[ Reply to This | # ]

Bleak House & Westminster Hall
Authored by: complex_number on Sunday, May 15 2011 @ 01:51 AM EDT
The snippett of Dickens made me realise how little has changed (legally) since those days.
Well ... SCO Should have been thrown into Debtors Prison a long time ago. That might have made the resolution a little swifter but somehow I doubt it.

Westminster Hall for thos who don't know it is part of the Palace of Westminster in London. This is otherwise known as the Houses of Parliament. The Hall itself is the one of the few parts of the old Palace to survive the fire of 1834. The hall dates from 1097. The roof was replaced in the later 14th Century and is a marvel of design & construction.
The manufacture was all performed in Farnham which is less that 2 miles from where I live.
The Hall is still in use today. You walk through it to get into the working part of the Palace (The Commons & The Lords).

I've had the luck and great honour to have been allowed to Photograph the Hall(the lighting is horrible) and inside the Chamber of the house of Lords in 2010.

If you ever get the chance to visit parliament just stop and think for a moment of all the people in history who have walked through that hall over the centuries. Then think of the scene that Dickens so vividly described and what it must have been like in the 1860's & 70's.

The courts of the time didn't take kindly to the antics that the SCO have lawyers played out over the years. They would have been given 'short shrift' from the judiciary. Link to definition

Methinks that a little more short shrift and a little less 'filibustering' might do the legal system a world of good.

---
Ubuntu & 'apt-get' are not the answer to Life, The Universe & Everything which is of course, "42" or is it 1.618?

[ Reply to This | # ]

Do I understand that the whole estate is found to have been absorbed in costs? - Ah ha!
Authored by: SilverWave on Sunday, May 15 2011 @ 06:27 AM EDT
that explains such a lot regarding bankruptcy court...

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Mr. Dickens was such a great writer
Authored by: The Mad Hatter r on Sunday, May 15 2011 @ 09:44 AM EDT

And also such a great cynic. Alas, his cynicism was warranted.


---
Wayne

http://madhatter.ca/

[ Reply to This | # ]

Can anyone explain why Blank Rome waited?
Authored by: Anonymous on Sunday, May 15 2011 @ 09:54 AM EDT
Why didn't Blank Rome file earlier? Can anyone explain this to me?

[ Reply to This | # ]

What is this "SCO" of which you speak?
Authored by: Anonymous on Sunday, May 15 2011 @ 10:30 AM EDT

I know of no business with that name. Are you perhaps referring to the TSG Group, Inc., or to TSG Operations?

[ Reply to This | # ]

Exit
Authored by: Anonymous on Sunday, May 15 2011 @ 01:21 PM EDT
What a poetic ending: a Bleak house quote, with absolutely perfect timing.

Have a nice life, PJ!

[ Reply to This | # ]

"but only with prior written notice to the Lender..."
Authored by: Anonymous on Sunday, May 15 2011 @ 01:33 PM EDT
Does that mean proir written notice that a sale will occur, or prior written
notice of what the final sale price will be?

[ Reply to This | # ]

Blank Rome Files 8 Bills For a Little More Than Half a Million Dollars and LeapTide and Yarro Make an Appearance - Updated
Authored by: Anonymous on Sunday, May 15 2011 @ 03:55 PM EDT
My own suspicion is that the point of the filing is to set up a claim for
liability against the Trustee himself.

[ Reply to This | # ]

I might not be around tomorrow
Authored by: Pop69 on Sunday, May 15 2011 @ 04:34 PM EDT
So before you go, have a big hug and a kiss on the cheek from me for everything
you have done here.

<hug> X

[ Reply to This | # ]

Thanks, PJ
Authored by: gfim on Sunday, May 15 2011 @ 09:41 PM EDT
PJ,

Thank you for the last few years of Groklaw. I'm not sure when I first came here
(Oct 2005 at least). But I know that I've been here almost every day since. Your
writing has been inspirational and your ethics beyond reproach. I hope you enjoy
your "retirement" and the rest of your life. Please come back and
visit Groklaw 2. I hope your successor(s) are as good as you have been.

Best regards,
Graham

---
Graham

[ Reply to This | # ]

By hook or by crook
Authored by: Ian Al on Monday, May 16 2011 @ 03:23 AM EDT
I'll be last in your...

Hey, who put the lights out!

---
Regards
Ian Al
Now, this is not the end. It is not even the beginning to the end. But it is,
perhaps, the end of the beginning. - Winston Churchill

[ Reply to This | # ]

And so May 16th arrives
Authored by: coolmos on Monday, May 16 2011 @ 06:16 AM EDT
Congratulations on your retirement PJ. You deserve every bit
of it for the years of work you have put in this site and
the fight against SCO and its allies.

I'm not a regular poster or contributor, although I did a
little bit of work in the early days. But I have visited at
least weekly and read much of what you wrote. You managed to
keep me entertained and filled with a glimmer of hope that
not everything in software/patentland is lost.

Have fun!

[ Reply to This | # ]

Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )