Docket #953 Exhibit C== Official transcript of Oct. 23 hearing


November 10, 2009

Get the transcript on EPIQ
Not a super deep-link because of expiring cookies .

Al P. off-the-cuff version is mostly precise (as we have learned to expect). The official version gives a wink-and-a-nod sense about the "meritorious and agressive" approach to litigation. The two judges appear to be setting up a mediation. Cahn says he has another meeting scheduled with IBM.

At no time is any money mentioned is respect to the AutoZone settlement. From Cahn/Fattels busy recitation of the other ways they are attempting to raise or save money, you get the impression the AutoZone was a zero dollar deal.

Cahn says they will need an emergency motion for an interim money deal soon (its already overdue?) and hopes Gross will sign it without delay.

9:43:36 PM

Cahn, not winking or nodding, reiterates "merit[orious]" assessment in writing


November 24, 2009

Panglozz wrote: "The official [transcript of the October 23, 2009 bankruptcy hearing] gives a wink-and-a-nod sense about the 'meritorious and agressive' approach to litigation."

Cahn responds:

I, Edward N. Cahn, declare as follows:

1. I am a citizen of the United States, am over the age of 21, and am competent to testify to the matters set forth herein.

2. I served as United States District Judge for the Eastern District of Pennsylvania from 1975 to 1998 and was Chief Judge from 1993 to 1998. Since 1999 I have been Of Counsel at the law firm of Blank Rome LLP in Philadelphia, Pennsylvania. I graduated magna cum laude with a Bachelor of Arts degree from Lehigh University and received my L.L.B. degree from Yale University in 1958. I have substantial experience as a mediator and arbitrator of complex commercial matters, including disputes over intellectual property and contract rights.

3. On August 26 [sic, should be 25], 2009, Judge Kevin Gross of the United States Bankruptcy Court for the District of Delaware appointed me as Chapter 11 Trustee of The SCO Group, Inc. ("SCO"), the Plaintiffs/Counterclaim Defendant in this matter. Judge Gross did so pursuant to his Memorandum Opinion dated August 5, 2009, in which he had determined that such a Trustee would [be] in a "better position" than himself to assess SCO's pending litigation and determine "whether the Debtors should continue to pursue the litigation."

4. In accordance with my appointment and mandate, I have spent over a hundred hours reading and analyzing many of the court rulings, legal briefs, evidence, expert reports, and hearing transcripts pertaining to SCO's litigation against Novell and IBM, and in meeting with counself from all sides to learn and ask about the cases. I am continuing to do such work but feel that I have a good understanding of the cases and the parties' respective positions.

5. In accordance with my mandate, I made my first report to Judge Gross in open court on October 23, 2009. In that report, I conveyed what I described as my preliminary view that SCO's cases have merit and that SCO should pursue them aggressively. Judge Gross accepted my assessment and directed me to follow my view. I have reviewed the transcript of my report to Judge Gross and it accurately reflects our discussion.

6. Accordingly, under both my original mandate and following Judge Gross's acceptance of my initial report and recommendation, I intend to move aggressively to reach resolution of SCO's cases. In my view, the best and most appropriate way to pursue that strategy is to proceed to trial on SCO's non-stayed claims against Novell -- that is, SCO's claims for slander of title and concerning ownership of the UNIX copyrights at issue. I do think that approach is especially appropriate considering that Novell had the opportunity to proceed to trial on its claims against SCO for damages in early 2008 and in light of the recent favorable ruling for SCO by the Tenth Circuit Court of Appeals, whose mandate brings SCO back to this Court. In reaching this conclusion, I also favorably considered the Court of Appeals' prompt decision to deny Novell's motion to stay the proceedings (a decision made before SCO had even filed an opposition to the request).

7. I want to be clear that I defer to this Court's discretion in resolving Novell's instant request for reassignment or consolidation, but I would like to convey my view that it is in the best interests of the parties and is consistent with the proceedings in the Bankruptcy Court to expedite the trial of this matter -- that the Court schedule the trial of SCO's non-stayed claims against Novell at the earliest practicable date, and that SCO's cases against Novell and IBM remain separate and that they not be reassigned. In my view, the status quo of the assignment and separate status of the cases allows the cases to proceed most efficiently and affords SCO the best opportunity to proceed to trial against Novell at the earliest practicable date, in furtherance of my mandate from the Bankruptcy Court in Delaware. In addition, based on my experience, I believe consolidating the Novell and IBM cases will make the trial overly complex and difficult for a jury to understand, to the detriment of all parties.

Dated this 18th day of November, 2009

/s/ Edward N. Cahn

("Declaration of Edward N. Cahn" [ ], dkt #603-6, Exhibit E to "Declaration of Brent O. Hatch in Support of SCO's Response to Novell's 'Notice of Related Proceeding'" [ ], dkt #603, filed November 24, 2009 in SCO Group v. Novell, No. 2:04-cv-139, D. Utah [ ]) (emphasis added)

8:03:27 PM

Audio (sans winks and nods) of Cahn assessing SCO's claims as "meritorious"


January 16, 2010

Here are some new additions on the Scofacts bankruptcy page [ ], regarding In re: SCO Group, Inc. et al. [ ], No. 07-11337, Bankr. D. Del. :

Court Hearings: (The data on the court-provided CDs is in the undocumented four-channel audio format (RIFF WAVE wFormatTag 0x8180) used by FTR PTY LTD, an Australian Proprietary Company (ACN 056 344 711 [ ]); see for a decoder that runs under Microsoft Windows.)

2009-10-23 Fri (agenda [ ]; minutes [ ]; sign-in [ ]; scanned transcript [ ]; transcript notice [ ]):
Nothing contested. First status report from trustee Edward Cahn, part of which is given pro se (i.e., we hear his own voice, not just his attorney's).
10:04:55 to 10:17:19 (12MB mp3) [ ]
Original FTR CD [ ]
2009-11-20 Fri (agenda [ ]; minutes [ ]; sign-in [ ]; transcript notice [ ]):
Wayne Gray's motion for stay relief argued and taken under advisement (later denied)
11:04 to 12:20
2009-12-30 Wed (agenda [ ]; minutes [ ]; sign-in [ ]; transcript notice [ ]):
Suse's motion for stay relief argued and taken under advisement, court promising that "you will hear from me within the next week" (sixteen days later, the motion was denied)
10:04:21 to 11:45:00

I don't have the November audio. I have the December audio, but I'm waiting until next week to post it (see the email at the end of this message.)

Here's a two-minute clip of Cahn detailing his diligence in evaluating SCO's claims against IBM and Novell, and giving his "confident" assessment of those claims:

MR. CAHN: If you're interested in what I've done as the trustee so far, I can run through that in a couple of minutes.

THE COURT: I would be delighted to hear that.

MR. CAHN: Okay.

THE COURT: Thank you, Mr. Cahn.

MR. CAHN: I've read the 10th Circuit opinion four times, and I call to your attention the fact that the petition for en banc rehearing has been denied with no judge voting to even have it heard.


MR. CAHN: I've read your opinion in regard to the appointment of a trustee, and I've read the transcript of that hearing. I've met personally with SCO management, SCO management and its lead lawyer Stuart Singer, to review the claims against IBM and Novell in detail.

I met with IBM's lead lawyers, R. Levine [sic in official transcript] and Dave Marriott to review their client's defenses; I met with Novell's lawyers to discuss their client's defenses.

I've reviewed the transcripts of oral argument in the IBM case; I've reviewed the parties's [sic in official transcript] briefs in the IBM case; I've reviewed the presentation books in the IBM case; I've reviewed the expert reports on both sides.

I've reviewed confidential SCO data; I've reviewed Novell's anti-assignment argument; I considered Novell's no-damage argument; I've reviewed the arbitration proceeding in Switzerland which you stayed; and I've conferred with SCO's legal team in regard to issues in that case.

I am continuing, with the aid of the financial consultants and my lawyers, to develop strategies to maximize the assets of the debtor for both the creditors and equity.

In my view, the Debtors' claims against Novell and IBM should be pursued aggressively. I acknowledge I have much more analysis to do, including another meeting with IBM's lawyers.

And [sic in official transcript] this juncture, I remain confident that the Debtors' claims against IBM and Novell, especially in light of the 10th Circuit opinion, are meritorious.

(December 30, 2009 hearing audio at 10:11:57-10:13:59 a.m. [ ], as transcribed in the official transcript, dkt #976, at p. 11:3-12:22, which Cahn later declared he had reviewed and found to be accurate (plus any errors introduced in my human-assisted OCRing of that transcript from this fucking scan (dkt #953-4) [ ], because I'm too cheap to buy the text version until the price drops from $15.30 to $1.36 on March 4))

(See the parent and grandparent of this message for Panglozz's allegation of wink-and-noddery, and for the text of Cahn's signed follow-up declaration, in which he wrote: "[srsly]" ("Declaration of Edward N. Cahn" [ ], dkt #603-6, Exhibit E to "Declaration of Brent O. Hatch in Support of SCO's Response to Novell's 'Notice of Related Proceeding'" [ ], dkt #603, filed November 24, 2009 in SCO Group v. Novell, No. 2:04-cv-139, D. Utah [ ]))

Weirdly, when he said "SCO management, SCO management", he was backing up to change his pronunciation of SCO from rhyming with blow to rhyming with cow, and he consistently used the cow version from then on. In other words, the official, trustee-approved pronunciation of SCO is now apparently "scowl" without the "l".

Below is a redacted version of an email I sent yesterday regarding the December hearing audio. If I receive notice that someone actually does want to attempt to have the audio sealed, then I will go to the trouble of posting a redacted version, but I expect there won't be any substantial response, and then I'll just post the full audio next weekend.

The amount of information that was revealed about the Autozone settlement was really quite small, and arguably nothing at all. I attached a long clip to the email, to provide ample context, but the only line that's really at issue is about one second long.

Date: Fri, 15 Jan 2010 14:07:06 -0800
From: "Alan P. Petrofsky, equity security holder"
To: "David J. Stewart, counsel for Autozone",
"Bonnie G. Fatell, counsel for trustee"
Cc: "Stanley B. Tarr, counsel for trustee",
"Edward Normand, counsel for trustee",
"Joseph McMahon, Jr., counsel for acting U.S. trustee",
"Adam A. Lewis, counsel for creditor Suse",
"Sean T. Greecher, counsel for creditor Suse",
"Michael A. Jacobs, counsel for creditor Suse",
"R. Stephen McNeill, counsel for creditor IBM",
"Richard Levin, counsel for creditor IBM"
Subject: Potential sealing of the December SCO bankruptcy hearing audio
(In re: SCO Group, Inc. et al., No. 07-bk-11337, Bankr. D. Del.,
and SCO Group, Inc. v. Autozone, Inc., No. 2:04-cv-237, D. Nev.)

Dear Mr. Stewart and Ms. Fatell:

For the convenience of the public and the parties, I have long been making copies of the court's official audio recordings of most of SCO's bankruptcy hearings freely available through the following web page:

At the December 30, 2009 hearing, for the first time in these cases, there was some suggestion that confidential information had been improperly publicly revealed in open court. Specifically, the trustee objected after Suse Linux's counsel had just stated, [REDACTED], and had thereby revealed that the confidential settlement agreement between SCO Group and Autozone is [REDACTED].

I don't think this information warrants any protection. However, as a courtesy to Autozone and the trustee, and out of an abundance of caution, I have decided not to publicly redistribute my copy of this portion of the audio recording until Autozone and the trustee have had an opportunity to move for an order that the recording be placed under seal and that the clerk of court stop providing copies of it to every member of the public who requests one and pays the $26 fee. If Autozone or the trustee, or any other party, gives me written notice, NO LATER THAN ON FRIDAY, JANUARY 22, 2010, that it intends to file such a motion, and it goes on to file the motion no later than on February 5 and notices it to be heard no later than at the March omnibus hearing, then I will continue to refrain from publishing the audio until the hearing date.

I am attaching to this email a clip of the relevant portion of the audio. For your convenience, here is an unofficial transcription of the clip (I do not have a copy of the official transcript and I do not know how completely this portion of the recording was transcribed therein; if anyone who happens to have a copy of the official transcript would email a copy of it to me, I would much appreciate it):

    (Recording starts at approximately 11:12:55 a.m., December 30, 2009)


    (Recording ends at approximately 11:14:34 a.m., December 30, 2009)

Yours truly,

Alan P. Petrofsky
Equity security holder of debtor The SCO Group, Inc.

9:40:48 PM

Source: Investor Village SCOX [ ]

Copyright 2009