Background

Several days ago (I have been a bit ill and could not write this piece until now), Psystar filed its required Summary of Schedules with the Florida Bankruptcy Court. A copy of this filing may be viewed here. On Page 10, as part of “Schedule F — Creditors Holding Unsecured Nonpriority Claims,” Apple’s claim is listed as being valued at $75,000.00.

Misinformation from the Apple Web. Again.

Recently, Macworld reported that Psystar claimed that Apple has a $75,000.00 claim against them and proceeded to ignorantly speculate on how that dollar figure was calculated. Specifically:

It’s possible that all or part of the $75,000 represents Mac OS X orders Psystar placed with Apple. At the list retail price of $129 per license, the $75,000 translates into 581 copies of Leopard.

Umm. What? It is apparent that the writer of this piece knows very little about the law. Anyone at all familiar with the Federal Court system would know immediately why that figure was chosen.

Please see Section 1332 of the United States Code:

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between—
(1) citizens of different States;
(2) citizens of a State and citizens or subjects of a foreign state;
(3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and
(4) a foreign state, defined in section 1603 (a) of this title, as plaintiff and citizens of a State or of different States.

Notice the value there? $75,000.00. If we return to Apple’s Amended Complaint, Paragraph 19, under the heading, Jurisdiction and Venue, we read:

This Court has subject matter jurisdiction pursuant to 28 U.S.C. sections 1331, 1332 and 1338 because this action arises under the copyright and trademark laws of the United States, there is complete diversity of citizenship between the parties, and the amount in controversy exceeds $75,000.00.

Apple’s Prayer for Relief did not name a sum certain so the only certainty as to the value of Apple’s claim (if successful) is that Apple has claimed that it meets the $75,000.00 threshold (technically, the threshold is $75,000.01) required for Federal jurisdiction. That is all that bankruptcy filing means. This is really basic stuff here folks. Right next to that amount Psystar acknowledged that the claimed amount was unliquidated. Here is a definition of that term as used in law:

DAMAGES, UNLIQUIDATED. The unascertained amount which is due to a person by another for an injury to the person, property, or relative rights of the party injured. These damages, being unknown, cannot be set off against the claim which the tort feasor has against the party injured.

So there is no need to speculate. It is a matter of routine.

Now, there is something MUCH more interesting in the bankruptcy filing and that is that Psystar claims over $3,011,682.80 in assets. Yes, you read me correctly. $3,011,682.80 in assets. Their personal property comprising inventory, office equipment, and a small bank account is valued at $11,682.80; so where is the remaining $3,000,000.00? Here is what Psystar claims is worth that amount (see Page 6):

Proprietary bootstrap technology, operating system interoperability technology, manufacturing process technology and safeupdate screening technology.

Sidenote: I thought these guys were the champions of non-proprietary software? Oh yeah, that’s right. Their EULA is even more restrictive than Apple’s.

Additionally, the filing reveals that Rudy Pedraza’s investment of $120,000.00 previously mentioned is actually credit card debt (see Page 12). Ouch.

On a final front, Apple’s Motion for Relief from Stay is scheduled for hearing on June 17, 2009.