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Msg  62308 of 144180  at  4/21/2008 5:13:19 PM  by

al_petrofsky


Audio of January, February and April Bankruptcy hearings; clips and pics

I have added the audio of the last three hearings to the recordings section of the scofacts bankruptcy page (it now includes all the hearings to date, as well as the creditors meeting):

http://scofacts.org/bankruptcy.html

Court Hearings: (The data on the court-provided CDs is in the undocumented four-channel audio format (RIFF WAVE wFormatTag 0x0180) used by FTR PTY LTD, an Australian Proprietary Company; see ForTheRecord.com for a decoder that runs under Microsoft Windows.)


April 2 Hearing

Here are a few clips:

Arthur Spector, for SCO:

http://scofacts.org/SCO-Group-bankruptcy-425-audio-clip-Spector.mp3"

There are some problems. And so the deal that's changed, we think, has fixed it. Well, we don't have any deal, but when we get the deal that we think we're going to get, it will be a much better deal in that respect because it's going to be an asset purchase and no lending. So, that's what we have on the table right now. We are circulating drafts of the MOU.

(transcript at 10:11-10:17, audio at +00:10:24 to +00:10:47)

Joseph McMahon, for the U.S. Trustee (UST):

http://scofacts.org/SCO-Group-bankruptcy-425-audio-clip-McMahon.mp3"

I don't think that this case can take a fourth chapter. And to the extent that, you know, we have to take a look at the issue of appointing an independent fiduciary to provide some clarity, we very well may move in that direction. And I just want the Court to be aware that we're taking a look at that issue.

(transcript 15:23-16:3, audio at +00:18:18 to +00:18:38)

Judge Kevin Gross:

http://scofacts.org/SCO-Group-bankruptcy-425-audio-clip-Gross.mp3"

I know there's a lot of work to be done. And as I say, obviously everyone is interested I think in a successful result, hopefully, and in seeing the -- the product that's being worked on so hard, that I know that everyone was working on hard.

(transcript at 16:18-16:22, audio at +00:19:15 to +00:19:30)


February Hearing

Here's Judge Gross overruling my objection to SCO's motion to extend the plan-filing-and-acceptance exclusivity deadlines:

http://scofacts.org/SCO-Group-bankruptcy-325-audio-clip-ruling.mp3"

I'm going to grant the motion, as submitted, and approve the dates. It is a complex case. There is no question that the, the Novell litigation is of major concern, and it's resolution has a tremendous impact on the case. And now we know that the trial is not scheduled until April, and you know, even that's somewhat late. But we'll deal with that at a later date, of course. And I am certainly satisfied that this, this Debtor has been acting responsibly, and to the best of its ability on the monthly operating reports. As far as the probability of success, the fact of the matter is none of us really will know for certain what the probability of success of a successful reorganization is until we know the results of the Novell litigation for one, and even then, we all recognize that there may be an appeal, and so, you know, it may be some time. And I'm also satisfied on the, based on the Debtors' representations that it is continuing to, to make a diligent effort to make some kind of a business transaction which may somehow enhance its ability to file a successful plan of reorganization. So based upon all of those factors, as well as all of the factors of the cases discussed under 1121 of the Code, the Court will overrule the objection, and will grant the motion.

(transcript at 8:20-9:17, audio at +00:14:44 to +00:16:34)

The line that "I am certainly satisfied that this, this Debtor has been acting responsibly" caused Pamela Jones to declare the hearing "a disaster" (groklaw comment 674343, February 22, 2008). It may look on the page, the way the transcriber decided to punctuate the sentence, that this was a blanket statement about the Debtors' responsibleness in all aspects of the case. However, I believe (from the audio and from the surrounding context) that this statement was addressing only the filing of monthly operating reports.

In any event, I think the important ruling that day was not the oral one, but the written one (dkt #329). Judge Gross signed the proposed order extending the exclusivity deadlines (dkt #289-3), after every creditor and the UST had declined to write a word of objection to that proposed order. Therefore, until SCO actually misses one of those deadlines, I think Judge Gross will tend to view as premature any motion that argues that there is no chance that SCO will successfully reorganize. It is for that reason that I have been guessing that a motion to convert the case to a Chapter 11 liquidation will not be filed until late July, and then granted in August (see message 61119).

I also think SCO has a decent chance of getting another 30-day extension. During the informal non-arguments at the April hearing, Arthur Spector brought up ongoing nonspecific due diligence as a reason for an extension, and IBM pointed out that that reason was weak (see dkt #437 at 13:4-13:18). I think the better argument, which I'm sure will occur to Spector, is to say that Stephen Norris has now decided he wants to wait until after the results from the SCO v. Novell trial are in. Based on Judge Kimball's history, I expect a good month to pass, after the trial ends, before he enters a ruling. Judge Gross has stated, in writing, that it makes more sense for a plan to be filed after that event rather than before it (see his ruling on lifting the SCO v. Novell stay, dkt #232 at 11: "As Novell has pointed out in its papers, the Debtors simply cannot file a confirmable plan of reorganization until they know what liability they have to Novell").


January Hearing

This was the hearing at which Judge Gross overruled Novell's objection to SCO's motion to approve the extension to the New Jersey lease.

This includes the testimony of Justin Mark Swenson. I believe this is the first publicly-available audio of a cross-examination of any witness in any SCO Group case. (Sure, it's not as interesting as the cross-examination-less McBride testimony at the Creditors' meeting back in October (see message 47989), but one must note the milestones.) (Speaking of random milestones: trading of money for SCO's stock will never set another new record daily low (owing to the fact that an unbreakable record of zero was set on March 10, 2008), but the weekly dollar volume just broke through the $5,000 mark for the first time last week, as it set a new low of $4,086.40.)

Clip:

http://scofacts.org/SCO-Group-bankruptcy-297-audio-clip-ruling.mp3"

THE COURT: You know, normally an issue relating to a headquarters lease is not very hotly contested in a bankruptcy case, particularly where a debtor has occupied the particular space for some time and is already up and running there, and we all know both in business and personally, the expenses attendant to moving and the disruption to business of moving and everything of that nature. Here we have a difficult situation because it's obvious that our debtor is undergoing some difficulty, but I think to make a judgment that the debtor's operations will not continue to improve, that there is not a reasonable likelihood of success in the litigation that is pending with Novell, which obviously the debtor is highly dependent upon, would be, I think, inappropriate for the Court to make such a judgment at this time. And it isn't my job to make an assessment of whether the debtor has done the best it could or if there's a better deal out there to be had. It's not, obviously, the Court's role under all of the cases to substitute its judgment for the debtor's, but simply to make an assessment based upon the facts as to whether or not the debtor has acted within a range of reason which the Court could then decide satisfies that business judgment test, which is a very liberal test as we all know for a debtor to satisfy. So, here I am satisfied, based upon Mr. Swenson's testimony, that the debtor made significant efforts to explore alternatives and that the - although everyone perhaps would have liked to have had a shorter term, the fact that there is a reduction of space and a reduction of rent for that space, is evidence that the debtor made a substantial effort and has reduced the estate's exposure, and on the basis of the testimony, the facts presented, and the standards that the law imposes, I am prepared to approve the debtor's motion on the amended lease for the New Jersey property.

(transcript at 32:19-34:2, audio at +00:45:02 to +00:48:01)


Exercise for the reader: for each hearing, post a video on Youtube.com that accompanies the audio recording with: (1) a clock showing Delaware time; (2) a counter showing the current transcript page number; and (3) the name, represented party, and photographic image of the current speaker. Extra credit: create a karaoke version without any of the judge's lines.

Here are pictures of the people who spoke at the April 2 hearing:

Rachel Lowy Werkheiser (Delaware Bar #3753, admitted 1998), from Pachulski Stang, for Debtors SCO Group, Inc. et al.:

(image from http://www.pszjlaw.com/biopics/69.jpg)

Grace E. Robson (New York Bar #2857746, admitted 1998), from Berger Singerman, for Debtors SCO Group, Inc. et al.:

(image from http://www.bergersingerman.com/images/image_bio/Grace Robson.jpg)

Arthur J. Spector (New York Bar #3748621, admitted 1975), from Berger Singerman, for Debtors SCO Group, Inc. et al.:

(image from http://www.bergersingerman.com/images/image_bio/Arthur_Spector.gif)

Richard B. Levin (D. Columbia Bar, admitted 1976), from Cravath Swaine, for Creditor International Business Machines Corp.:

(image from http://web.archive.org/web/20040806085447/www.skadden.com/bioImages/836.jpg)

Adam A. Lewis (California Bar #88736, admitted 1979), from Morrison Foerster, for Creditor Novell, Inc.:

(image from http://www.mofo.com/images/attorney/407.jpg)

I couldn't find any official photos of McMahon or Gross. To provide alternative visual icons, here is each one's name written in his own hand:

Joseph James McMahon, Jr. (Pennsylvania Bar #77570, admitted 1996), from U.S. Department of Justice, for U.S. Trustee Kelly Beaudin Stapleton:

(image from http://ecf.deb.uscourts.gov/cgi-bin/show_case_doc?193,109446,1,,)

Hon. Kevin J. Gross (Pennsylvania Bar #27160, admitted 1978 (inactive); Delaware Bar #209), United States Bankruptcy Judge:

(image from http://ecf.deb.uscourts.gov/cgi-bin/show_case_doc?232,109446,0,,)

I have neither a photograph nor an autograph of the Rise Requestor, Deputy Clerk Sherry K. Scaruzzi (who always gives the line immediately preceeding Judge Gross's entrance).



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Msg # Subject Author Recs Date Posted
64266 Motion for 90-day BK exclusivity extension; SCO v. Novell Trial exhibit lists al_petrofsky 26 5/9/2008 5:44:36 PM
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