Chapter 11 Trustee's First Act: Wants to Hire a Lawyer(Groklaw)

Surprise. Surprise.

What would their duties include?
a) Collect and reduce to money the property of the estate for which such Trustee serves, and close such estate as expeditiously as is compatible with the best interests of parties in interest;...
d) Investigate the acts, conduct, assets, liabilities, financial condition and financial affairs of the Debtors, the operation of the Debtors' business and desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a plan;...
j) Assist the Chapter 11 Trustee in the analysis of third party litigation and liquidation of assets in accordance with the Bankruptcy Code and the Local Rules;
k) As soon a practicable, file a statement of any investigation conducted, including any fact ascertained pertaining to fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity in the management of the affairs of the Debtors, or to a cause of action available to the estate;
The trustees primary duty is to gather together whatever money it can in order to pay off the creditors and get the company out of bankruptcy. If that is possible.

Unlike the former management, it does not have any interest in running a scam, filing nuisance law suits, committing extortion or other such ventures. Neither does it have an agenda to bad mouth Linux simply because Microsoft will finance it.

Is it possible that the former SCO management will be sued? What about the stupid lawyers that put SCO into bankruptcy trying to run an extortion scam and a whole selection of nuisance law suits?

Anything is possible for sure. Those lawyers were paid some $30 million or so, right? And their legal services gave rise to the fall of SCO. The former management could be sued as well. But, most likely they do not have $30 million laying around just waiting for the trustee to grab it.

What is likely to happen?

Settle. Settle. Settle.

The AutoZone? law suit is a joke. Red Hat filed the action against SCO. So it is natural that they go away as quickly as possible. But, just remember that Microsoft had to pay Lindows some $30 million or so in order to allow Microsoft to dismiss its law suits against Lindows for “trademark” violations. Yes, and Lindows changed its name to Linspire. But, it is rare that the plaintiff has to pay off the defendant in order to drop a case the plaintiff filed.

SCO simply does not have any money to offer to anybody. I am surprised that Blank Rome thinks there is enough money to pay their fees. And you can bet that Novell is going to insist upon being first in the bread line.

As for the Novell and IBM litigations, the trustee has a few tough questions to answer. Or, perhaps you do not think they are so tough. Well, despite my own opinion, those questions do remain tough. The trustee has a duty to do the best that can be done in order to bring in some dough.

My guess is that the old SCO lawyers will kick back some money in exchange for an agreement not to sue them for more. SCO management will not be worth going after regardless of how incompetent or dishonest they have been. Novell will get paid their license amounts. The IBM case will be settled for no exchange of funds. And Novell will end up with the APA back home. Precise dollar amounts if any to be determined.

This is a dead horse. Cut it up and make glue or hamburgers or whatever. There is little to be gained by kicking it.

Judge Gross wanted a trustee to take over. About time. And the trustee wants to hire some lawyers to make serious recommendations. And I am sure they will.