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AutoZone Granted Limited Stay in SCO Copyright Case
michael path writes "From Yahoo: Judge Robert C. Jones on Monday denied AutoZone's request to transfer its copyright case with The SCO Group from Nevada to a Tennessee court, but also granted a limited stay to the auto parts chain."
On one hand I dont want to see SCO win anything but on the other hand I wish autozone would burn. They decided to Corporate Restructure my father as a manager after working there for almost 20 years. Its a shame when you make more than your bosses boss........like I said while I dont like SCO, this case could not have happend to a nicer business.
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According to Groklaw, this is not true. They say the issue of transfer is undecided. That is different than denied AutoZone's request to transfer.
"Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
This isn't exactly correct. SCO *only* gets to do discovery related to a preliminary injunction. The judge told them not to bother with the discovery if they're not going to try for a preliminary injuction - which sets a trap for them. If they pursue an injuction then they have to go forth and try to prove that the stay would cause them massive harm. The stay will continue unless SCO decides to admit to more than they have been prepared to.
"SCO's principal argument in opposition to AutoZone's motion is that it will suffer irreparable harm if the case is stayed."
The reason for this language is because "irreperable harm" is the standard for granting or denying an injunction, depending on which side of the fence you are on. It's a legal term of art. Nothing more than that.
It's like when you go to the doctor -- when they write up their reports, they say "patient complained of..." So, even if you aren't a whiner, they say you are a complainer -- not to put you down, but because it is a term of art...
"That's not even wrong..." -- Wolfgang Pauli
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Uhh, how exactly is this newsworthy? Are we that starved for stories?
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Uhh, how exactly is this worth posting? Are you that starved to say something.
This is big news but you'll have to go to Groklaw or the SCOX board at Yahoo Finance to see why. The judge seems to be a no nonsense type and he told SCO, in nice legal terms, to put up or shut up. They don't have anything to put up and Blake Stowell has said they are not going to shut up. Lotsa very happy posters at Groklaw and The Board.
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Yeah, it seems that Yahoo News doesn't really understand what's going on here, does it?
It's pretty straightforward....Autozone was granted the stay, with 90 day review periods (just like the RedHat case). Their 90 day review takes place after the RedHat review because the Autozone case depends on the RedHat case being decided as well.
The transfer wasn't even discussed in depth because until the stay is lifted, it's moot.
Insanity is a gradual process; don't rush it.
Autozone drags SCO to Tennessee because:
Autozone is headquartered there
They don't spend a zillion dollars hiring a Nevada law firm or sending their attorneys there
It's less distracting to the business
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
You can't short stocks on the NASDAQ when they're below $5. So all the short sellers have dropped out of the market. Other than them, nobody cares about SCOX any more. SCOX volume is way down, running about a quarter of what it was a few months ago.
The 54.47% of shares that are shorted might have something to do with it.
You accuse Slashdot of being "behind the curve" but don't get too uppity. The "research" on Groklaw is always post event and mostly consists of repetition and highlighting of what the real protagonists - the lawyers - have already argued days or even weeks before.
Groklaw is little more than a news site with a very limited scope. Useful to us, because we can stay informed, but don't big note its role. The commentary does not and will not have significant bearing on the outcome. You're kidding yourself if you think otherwise.
You may not have asked for the right thing.
There are no options written for SCOX, and there never have been. See here for yourself. Had there been PUT options available, you could have bought those to make money when SCO's stock price crashed. The good thing about options: if you simply buy calls and puts, your loss is limited to your original investment.
Selling short does not involve option trading. It is effectively borrowing stock from holders of SCO at your brokerage and selling it, with the hope that you will be able to buy it back at a lower price to close out the position. If the stock price skyrockets, your potential loss is limited only by how high the price rises. There's a phenomena known as a "short squeeze", where short sellers try to close out their position by buying the stock, which only pushes the price higher.
In order to sell short, you must have a margin account. Depending on the brokerage and the specific stock, margin requirements are different. At mine (Fidelity), the margin requirement for SCOX is 60%, which means you would have to put up $6,000 in cash or marginable equities to short $10,000 of SCOX stock. They also have a minimum account balance.
50% is the initial Federal requirement (at the time of the short sell). Fidelity normally allows the margin requirement to drop to 35% (after the initial short) before issuing a margin call -- which requires you to deposit more cash or close out the position. The 60% margin requirement for SCOX indicates a significantly higher risks.
Part of your problem may have been your lack of knowledge about the terminology and being able to accurately articulate what you wanted to do. The SEC requires brokerages to assess whether clients understand the risks of option trading. I don't know if they are required to do the same for margin trading.
A recording of the hearing (30 minutes, 29 MB) is at sco.petrofsky.org/autozone-2004-07-12.mp3 and www.users.cloud9.net/~terrapn/Courtroom%207D%20-%2 012-07-2004.mp3
I know the first URL won't survive much of a slashdotting, not sure about the second. Please mirror it somewhere better if you're so inclined. (No, this is not a bootleg recording. I obtained it from the clerk on Tuesday.)
Below are the notes I wrote on Monday after attending the hearing. One correction: at the hearing, the judge did not actually make any order on either motion, but my understanding was that in the aftermath of the hearing he would issue orders denying the motion to transfer venue and granting the motion to stay (with, as an exception to the stay, an opportunity for SCO to move for a preliminary injunction, and to conduct one round of discovery to attempt to support such an injuction).
No orders have yet been issued, so it's impossible to say *exactly* what they will be. The official minutes of the hearing were written on Wednesday, and are not yet available either, but the heavily abbreviated caption to the minutes is now showing on the court's (subscription-only) docket access site and reads like so:
dtd 7/12/04: CT Recorder: Lilia Abarca De Carter: Re: Hrg on mtn for stay (#10) & mtn to transfer (#9), ORD case is stayed for 90 dys, Ptys will be allowed disc as to issue of prelim injunct. Cnsl directed to prepare ord for CT sign. cpys dist
It appears that the court may be neither officially granting nor denying the venue change at this time. It appears that all the activity contemplated at the hearing (the preliminary injunction process and the submitting of letters every 90 days) will occur in the Nevada district, so my understanding is that the venue change has in effect been denied for now, but the court may revisit it when the stay is lifted, without the motion having to be made again.
Here are my initial notes, posted Monday at finance.messages.yahoo.com
Subject: Venue change denied, stay mostly granted
AutoZone's motion for a change of venue (to Tennessee) was denied. The case will stay in Nevada.
Judge Jones said he will follow Judge Robinson's lead and stay the case indefinitely, like the Red Hat case was, with the parties to send him updates on all the other actions every 90 days.
However, he will give SCO a chance to file a motion for a preliminary injunction to be in effect during the stay, and he will allow one round of discovery to facilitate such a motion.
That is, if SCO believes that it will be irreparably harmed during the stay, it may ask for an order that, during the stay, AutoZone is not to engage in whatever the harmful activity is. SCO will have thirty days to propound any discovery requests (interrogatories, document requests, or depositions) that are necessary for its preliminary injunction motion, and AutoZone will have thirty days to respond to them.
The case will be stayed indefinitely, pending other cases, regardless of the outcome of SCO's request (should it decide to make one) for a preliminary injunction, which would just describe what things (if any) AutoZone needs to refrain from doing until the stay is ended.
AutoZone asked the judge to reconsider the part about the preliminary injunction, pointing out that SCO has never sought a preliminary injunction (which has quite stringent requirements) against anyone, and that it's very difficult to imagine that SCO could show sufficient grounds for a preliminary injunction, because the only thing SCO wants with respect to the infringing conduct i
When stocks fall under 4 they have a Federal Reserve Board margin requirement of 2. This makes shorting low priced stocks less attractive, but they may still be shorted.
An example of this is to short 1000 shares at 0.01 would require a deposit of $2000 to short $10 of stock. This may not be a concern if you have a large amount of marginable securities that you are not using for anything else, but for most people it is imprudent to short low value stock.
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I always thought of it as Slashdot, where even trivial news from Groklaw gets repeated on a daily basis.
Actually, its been almost three weeks since slashdot posted an SCO story. Wired on McBride on June 26th. I don't think a story every 2 to 3 weeks is so bad, considering the potential ramifications.
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