Was Cahn The Right Person To Appoint As Trustee?
October 6, 2009
In his OPINION r.e. Motions to Convert [SCOBK-890], Judge Gross focused the litigation
as being a "special circumstance" that mitigated against conversion:
"The Court finds that the Litigation is an 'unusual circumstance' which militates against conversion. Whether pursuit of the Litigation is in the best interests of creditors and the estate is something a Chapter 11 trustee must investigate."
"The Court's 'two cents,' however, is to suggest that the OUST consider appointing a retired judge or litigator since the analysis of the Litigation will serve as the trustee's PRINCIPAL responsibility."
It sounds like the litigation is really where the biggest upside is for SCO, right?
While the dollar amounts that Cahn proposes in the letter of engagement with Ocean Park [SCOBK-923] are presented as being hypothetical, one has to imagine that they represent his current thinking on what he can realistically obtain in an asset sale:
$1 million for the patent
$2 million for the litigation
$6 million for the UNIX business
In the opinion of Edward Cahn, the litigation is worth 22% of SCO's total assets. While it is certainly not a trivial amount, is this percentage high enough to have warranted the appointment of "a retired judge or litigator" as Trustee as opposed to, say, someone whose expertise would be in maximizing the value of the Business assets?
Source: Investor Village SCO Board [ http://www.investorvillage.com/smbd.asp?mb=1911 ]