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SCO's April 2nd Bankruptcy Hearing Transcript

By Pamela Jones et al.

The transcript [PDF] of the April 2nd hearing is now available. And we get some answers.

First, SCO's plan sponsor protections motion [PDF] is not going forward, as we suspected. Ditto the request for a scheduling order. The new deal , if there is one, will be a straight asset sale, with no loan features. So creditors will be paid on confirmation, SCO's attorney Arthur Spector tells the court, adding that he hopes that will resolve any future issues and stem the objectors from objecting to the next plan. Only the shareholders should care about that one, he indicates, and maybe the U.S. Trustee.

He expresses next the hope that the deadline for exclusivity, May 11th, stands, and he hopes to have the new plan done by then. But -- and with SCO there is always a but when it comes to deadlines, it seems -- the due diligence might be a problem, he says. They might need more time, an extension of another month or so to get the due diligence done.

Uh huh. Of course IBM's Richard Levin immediately stands up, tells the court the first he's hearing about an extension is live in real time out of Spector's mouth that very moment, so he puts in the record, without taking a formal position, that the original deadline for due diligence was that day, and he fails to see why changing the deal from a loan to a purchase would affect due diligence deadlines. SCO has a month and a bit more of time until the exclusivity deadline is up. So, if they ask for more time, IBM may object if SCO asks for an extension to do due diligence that should have been done by April 2nd anyway.

Then Novell promises that it will be back to object too, should SCO ask for an extension. And he expresses the hope that the next plan will actually be a real one, not another "fire drill".

Then Joseph McMahon, the trial attorney from the US Trustee's Office, stands up to express "a couple of cautionary notes." And his concerns are so deep, he informs the court that his office is looking into the need for a fiduciary. First, he mentions the prior York deal, and he raises the same question about the new deal that he raised about the York deal -- to what extent the IP which "debtors do not own" was to be sold or made part of a business plan going forward. He hopes the new plan will be crystal clear about what exactly is proposed to be sold or used.

Full post as published by Groklaw on April 11, 2008 (boomark / email).