World of Apple

Yesterday, Apple filed its Notice of Entry of Order Granting Motion by Apple, Inc. for Relief from Stay in order to inform Judge Alsup that this case can proceed. I expect that Apple will aggressively pursue this matter in the coming days.

Please look for a summary of the status thus far as well as some interesting tidbits not yet reported here (or elsewhere that I have seen) over this weekend.

In a support document posted yesterday Apple has seemingly given a warning to Palm who recently released its Pre handset while touting one of the leading features as its ability to sync with Apple’s iTunes software.

It was reported at the time that the Palm Pre emulates an iPod therefore tricking iTunes into syncing with the device, in Apple’s support note titled “About unsupported third-party digital media players” the company warns that future updates to iTunes could break such features.

Apple designs the hardware and software to provide seamless integration of the iPhone and iPod with iTunes, the iTunes Store, and tens of thousands of apps on the App Store. Apple is aware that some third-parties claim that their digital media players are able to sync with Apple software. However, Apple does not provide support for, or test for compatibility with, non-Apple digital media players and, because software changes over time, newer versions of Apple’s iTunes software may no longer provide syncing functionality with non-Apple digital media players.

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.

(more…)

Yesterday, Apple filed a Motion with the Southern District of Florida Bankruptcy Court for Relief from the Automatic Stay of Proceedings in its lawsuit with Psystar and to allow the case to proceed to trial as previously scheduled. In its arguments, Apple sets forth twelve factors that the Florida Bankruptcy Courts have used in determining whether such a stay should be lifted as follows (citing In re Beane, — B.R. —, 2008 WL 6053198 (M.D. Fla. July 15, 2008):

(1) whether relief would result in a partial or complete resolution of the issues;
(2) lack of any connection with or interference with the bankruptcy case;
(3) whether the other proceeding involves the debtor as a fiduciary;
(4) whether a specialized tribunal with the necessary expertise has been established to hear the cause of action;
(5) whether the debtor’s insurer has assumed full responsibility for defending it;
(6) whether the action primarily involves third parties;
(7) whether litigation in another forum would prejudice the interests of other creditors;
(8) whether the judgment claim arising from the other action is subject to equitable subordination;
(9) whether movant’s success in the other proceeding would result in a judicial lien avoidable by the debtor;
(10) the interests of judicial economy and the expeditious and economical resolution of litigation;
(11) whether the parties are ready for trial in the other proceeding; and
(12) the impact of the stay on the parties and the balance of harms.

(more…)

On June 1, 2009, Judge Alsup signed an Order stating:

In light of the bankruptcy filing, all proceedings are hereby STAYED until the automatic stay lifts at which time the parties must immediately notify the Court and arrange for a case management conference. A case management conference will be held in any event on December 10, 2009 at 11 a.m. to survey the status.

There has been nothing new filed in the Bankruptcy Court since my last report.

With everyone’s interest so intensely focused on any bits of information that may come out of the Psystar bankruptcy hearing with regards to as yet unknown investors, the docket from today and yesterday indicates that Psystar (and presumably the creditors) will have the opportunity to request redaction of hearing transcripts. Here are the docket entries:

05/27/2009 18 Transcript of 5/26/2009 Hearing [Document Image Available ONLY to Court Users]. Redaction Request Due By 06/3/2009. Statement of Personal Data Identifier Redaction Request Due by 06/17/2009. Redacted Transcript Due by 06/29/2009. Transcript access will be restricted through 08/25/2009. (Ouellette and Mauldin) (Entered: 05/27/2009)

05/28/2009 19 Notice Regarding Filing of Transcript and Deadline for Filing Notice of Intent or Motions to Request Redaction of Transcript. (Re: 18 Transcript of 5/26/2009 Hearing [Document Image Available ONLY to Court Users]. (Covington, Katrinka) (Entered: 05/28/2009)

These entries are somewhat confusing as they reference a hearing that took place on 5/26/09. However, the docket does not reflect an actual hearing on that date, but rather simply the filing of a Notice for a future hearing.

05/26/2009 16 Notice of Meeting of Creditors. Meeting of Creditors to be Held on 6/24/2009 at 02:30 PM at 51 SW First Ave Room 1021, Miami. Deadline to File a Complaint to Determine Dischargeability of Certain Debts is 8/24/2009. Proofs of Claim due by 9/22/2009. (Covington, Katrinka) (Entered: 05/26/2009)

As I do not work in bankruptcy law, it is possible that there is something that I am missing here procedurally. I welcome any input from someone in that particular area of law. Perhaps further filings will clear up this minor mystery.

Remember, if this case interests you, be sure to check World of Apple frequently as I have made it my personal goal to report not just the big events which catch the attention of the Apple web at large, but also the smaller events which can turn out to be quite significant in the long run.

This morning, Apple filed a Notice of Appearance and Demand for Service of Pleadings and Other Papers in Psystar’s Florida bankruptcy case. Apple is represented by Berger Singerman, P.A. for this action. While the filing sounds strong with the word “demand” in the title, it simply means that Apple wishes to receive copies of all papers filed in this matter. This is a routine filing. Here is the docket entry:

05/27/2009 17 Notice of Appearance and Request for Service of Pleadings and Other Papers by Paul Steven Singerman Esq Filed by Creditor Apple, Inc.. (Singerman, Paul) (Entered: 05/27/2009)

As most of you have read by now, on May 21, 2009, Psystar filed for Chapter 11 bankruptcy in the Florida Federal Court System. While I can be a competitive over-achiever and chomp at the bit to be the first to break a story, there are advantages to waiting. One, I can think of something intelligent to say, and two, I can clear up any possible misinformation that was reported earlier. To begin this journey (and to give World of Apple readers information that has yet to be reported elsewhere), I am going to back up to the discovery dispute hearing that took place on May 5, 2009. It will be helpful to the reader to take a quick glance over my prior articles regarding this dispute:

Apple v. Psystar: Things Just Got Really Interesting

Psystar Responds to Apple’s Discovery Allegations, Calls Blogosphere “Rabid”

Apple v. Psystar: Apple Submits Joint Proposed Discovery Order to the Court

The hearing resulted in an order requiring the following:

Based on the parties’ agreement and the Court’s resolution of the disputes, the Court now orders that Psystar produce by NOON ON MAY 18, 2009, the following categories of documents:
• All the underlying documents used to prepare the June 2008 profit and loss statement and balance sheet bates stamped PS010327-328, to the extent the documents have not been produced.
• All the underlying documents used or being used to prepare the aggregated financial statement referenced in Psystar’s opposition letter brief (Dkt. No. 61).
• All of the tabulations created by Jennifer Perez regarding the components needed to build Psystar’s products.
• Documents bates stamped PS01383-2000.
• Bank statements for all of Psystar’s accounts from Commerce Bank and TD Bank from April 2008 through September 2008. To the extent that said statements are not immediately in the possession of Psystar either in physical or electronic form, Psystar shall ask Commerce Bank and TD Bank for these statements on an every other day basis until Commerce Bank and TD Bank provide said statements.
• A copy of all attachments to all previously produced emails and a copy of the corresponding email in hard copy or in electronic form.
In addition, Psystar will provide a designated representative to supplement Apple’s previously noticed 30(b)(6) deposition on Topic 2 (financial information) on JUNE 3, 2009, starting at 9 a.m. at the San Francisco office of Townsend and Townsend and Crew LLP. This date may be changed to another day during the week of June 3 so long as the Parties agree in writing in advance of the deposition date.
If Psystar does not completely produce the aforementioned financial documents by May 18, 2009, Apple will be allowed to take a deposition after the fact discovery deadline regarding any documents produced after the Court’s deadline of May 18, 2009. Should Psystar fully comply in producing all the financial documents listed above by May 18, Psystar does not have to pay Apple’s attorney’s fees and expenses.

In the coverage provided by other sites that I have read thus far, the timing of the bankruptcy filing has not been related to the deadline bolded above. I, however, cannot help but think that the two are closely related. I would speculate that Psystar did not produce the documents by that date and was facing monetary sanctions which provided the impetus for the bankruptcy filing as the straw which broke the cloner’s back.

(more…)

Judge Alsup has approved and entered as final the Proposed Joint Order Compelling Psystar’s Production of Financial Records and Rule 30(b)(6) Deposition filed yesterday by Apple and discussed earlier today. A copy of the Proposed Order (now final) can be found here.

We now have a look into the happenings of the hearing on Apple’s discovery dispute with Psystar. Just a few moments ago, Apple filed a Proposed Order with the Court compelling Psystar’s production of financial records and submission to an additional Rule 30(b)(6) deposition on the topic of the company financials. Here is a copy of the Proposed Order.

As this is a joint document, it gives us an insight as to what the parties have understood to be the Court’s ruling on this issue (to which both parties also agreed).

Here are the rulings in the Proposed Order:

Based on the parties’ agreement and the Court’s resolution of the disputes, the Court now orders that Psystar produce by NOON ON MAY 18, 2009, the following categories of documents:

If Psystar does not completely produce the aforementioned financial documents by May 18, 2009, Apple will be allowed to take a deposition after the fact discovery deadline regarding any documents produced after the Court’s deadline of May 18, 2009. Should Psystar fully comply in producing all the financial documents listed above by May 18, Psystar does not have to pay Apple’s attorney’s fees and expenses.

It seems that the Court did not find Psystar’s somewhat petulant response compelling.

A copy of the Proposed Order was uploaded above.

Much thanks to reader Anthony for pointing out an error made in the first sentence, which I have fixed.