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Chapter 11 Trustee Appointed For SCO
I Don't Believe in Imaginary Property writes "The judge overseeing the SCO Chapter 11 bankruptcy case has issued an order appointing a chapter 11 trustee to oversee SCO's operations. However, the judge's reasoning is far from clear. While the judge believes that SCO has 'abandoned rehabilitation' to bet its future on litigation, he doesn't think it appropriate to convert their case to Chapter 7 liquidation. So SCO's management hasn't been fired yet, but they're no longer fully in charge either. It's not clear why the bankruptcy judge opted for this solution, when even the US Trustee was pushing to fire SCO's management and convert the case to Chapter 7. In short, SCO is still only mostly dead, rather than all dead, and in desperate search of a miracle worker."
However, the judge's reasoning is far from clear.
Maybe this is the judge's way of putting a watchdog on 'em to make sure they don't run out the door with or (further) destroy the value of some of the remaining assets before things get settled?
(Not only am I NAL but I'm especially NA bankruptcy L.)
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
There were stories that the CEO of Enron, Ken Lay called the Whitehouse after things collapsed. His call was not taken. Just a few years before he was Uncle Kenny at the BBQs in Crawford, TX. Probably be about the same here.
The trustee has to investigate SCO's business. The trustee can decide that SCO's whole 'thing' is a fraud and has no chance of success. The trustee can settle all the cases out of court and on the terms that Novell and IBM dictate. That would put a quick end to the whole thing and Darl and company couldn't appeal the decision.
If SCO's assets were sold in chapter 7, there is a chance that the litigation would go on for years.
So, chapter 11 with a trustee might be better than chapter 7.
Unfortunately, I can't see WHEN it will become so. They should have been converted to a 7 filing and the Judge didn't do that much. While appointing an 11 Trustee is a step in the right direction, it's little more than a baby step really.
I can't see WHY the Judge is erring so far on the side of caution here- there won't be any appealing a 7 conversion at this point as SCO's clearly not restructuring to be profitable again. They're still hoping for the **BIG** litigation score- which will never happen as they didn't have a case in that regard to begin with.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
They're still hoping for the **BIG** litigation score- which will never happen as they didn't have a case in that regard to begin with.
Interestingly enough, that lawsuit could be seen as an "asset" of sorts. When you file bankruptcy you have to list any causes of action or ongoing lawsuits that you are a party to. The theory is that if the cases have merit the US Trustee can take them from you, litigate them to the logical conclusion and use the proceeds to repay your creditors.
That the US Trustee hasn't already seized their ongoing cases is pretty telling of how much "merit" they have. Of course most of here already knew that. I am somewhat surprised that it hasn't been converted to a 7 as well. How much money do they owe? Maybe the creditors will eventually push it in that direction -- it will soon become bloody obvious to them that they aren't going to see a dime if the current crew gets to keep using Chapter 11 as a shield to wait for the big score that's never gonna come.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.