Cahn confident IBM and Novell cases meritorious, should be pursued aggressively

al_petrofsky

October 23, 2009

Here's an incomplete, inaccurate, sometimes paraphrased transcript of this morning's hearing. See also "Minute Entry", dkt #937 [ http://scofacts.org/SCO-Group-bankruptcy-937.pdf ], filed October 23, 2009 in In re: SCO Group, Inc. [ http://scofacts.org/nefomatic-test-SCO-Group-bankruptcy.html ], No. 1:07-bk-11337, Bankr. D. Del..

10:05 Please rise.

Fatell: Good morning. Let me introduce Edward Cahn.

Gross: Good morning, Mr. Cahn, it's a pleasure.

Cahn: Good morning.

Gross: I'm sorry, I should have said Judge Cahn, shouldn't I?

Fatell: Actually, because you're presiding, I think it's Mister.

Cahn: In an adversary proceeding, one side being addressed as Judge is probably not a good idea.

Gross: Okay, Mr. Cahn.

Gross: And I want to say good morning to Mr. Rookie, a former law clerk of mine making his first appearance.

(As far as I could tell, "Rookie" is literally his name, and not just his status.)

Fatell: There are two uncontested matters with CNOs. Did you get a chance to review them?

Gross: Yes, and they're fine. I just forgot to sign the orders.

Fatell: Okay, then I'll start our status report.

Fatell: We started by meeting with management. We visited the main operations in New Jersey. We saw the company was severely financially challenged. Brought in Ocean Park. They've been doing a great job. We cut some costs, did some layoffs, including the CEO. We're looking at a DIP financing deal -- well, not really "DIP" because the debtors are no longer in possession, but a deal with similar terms to a DIP financing deal. We're also looking at potential asset dispositions.

Fatell: Our expectation at this point is that we will be selling the assets and retaining the litigation. Hopefully we will be left with some value for equity holders. And here's Mr. Cahn.

10:09

Cahn: After you ordered that a trustee be found with litigation experience, one of the attorneys suggested me and I was then interviewed by the acting U.S. Trustee. She seemed particularly interested that I had experience as a court-appointed special master in intellectual property cases, namely a postage-for-email case, an early RIM/Blackberry patent case, and a bank software case. I've also done (blah, blah, blah).

10:11

Gross: It's nice to know there's a life after the bench.

10:12

Cahn: I've read the tenth circuit opinion 4 times. FYI, en banc review has been denied with no vote.

Cahn: I've met with SCO management and Stuart Singer. Met with Levin and Marriott. Met with Novell. Reviewed transcripts, briefs, and presentation books in IBM case. Reviewed Novell's arguments. Reviewed the arbitration in Switzerland.

Cahn: In my view, the claims against Novell and IBM should be pursued aggressively.

Cahn: At this point, I am confident that the cases against IBM and Novell are meritorious.

10:14

Cahn: Would you like me to provide written or oral reports about the litigation?

Gross: Written.

Gross: ... I know the debtors' litigation counsel are of high expertise.

Cahn: And so are their adversaries'.

Gross: Yes, and I know it will be difficult to reach a resolution. Perhaps at some point I can suggest a mediator.

Cahn: I've done over a thousand mediations, and I think that experience may come in handy. ...

Fatell (wrapping up): Did you want to set any particular schedule for the filing of the written reports?

Gross: No. Whenever.

Fatell: Okay.

Gross: I wish you all a good day.

10:17 Please sink.

(Didn't write this down, so I'm not sure where to put it, but somewhere in there Fatell or Cahn did mention that a proposed Autozone settlement had been filed, and Gross said he looked forward to reading it.)

11:14:19 AM


Re: Cahn confident IBM and Novell cases meritorious, should be pursued aggressively

jonathan_sizz

October 23, 2009

Cahn: I've read the tenth circuit opinion 4 times. FYI, en banc review has been denied with no vote.

Cahn: I've met with SCO management and Stuart Singer. Met with Levin and Marriott. Met with Novell.

And there we have laid bare the central conceit, the central fallacy in this whole crazy detour that Gross initiated: the idea that the right person to review the litigation was a lawyer. And so the lawyer who was appointed by the lawyer talked to a load of lawyers and then decided that his own lawyers were right and the other lawyers were wrong and the answer was more lawyering.

Hence Gross's next bizarre left-field fallacy from Planet Lawulus:

Gross: ... I know the debtors' litigation counsel are of high expertise.

Cahn: And so are their adversaries'.

Gross: Yes, and I know it will be difficult to reach a resolution. Perhaps at some point I can suggest a mediator.

Cahn: I've done over a thousand mediations, and I think that experience may come in handy. ...

ooo lookie. Lotsa clever mens. They must all be right. Why can't we all have a big group hug and meet half way.

NOOOOOO!!!!

If you want to make your mind up who's right in the IBM case, talk to Rochkind and Davis. If you want to make your mind up who's right in the Novell case, talk to Frankenburg and Michels and Braham and Amadia. Or at least, read their declarations and reports. Everything else is paid advocacy - tainted bluster and spin, at arm's length from the facts.

I. Fucking. Despair.

11:53:37 AM


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