A closer look at Psystar, and why we may never know who bankrolled them

Wed, May 27, 2009

Legal, News

You can always count on World Of Apple to come through with the goods when it comes to the legal aspect of Apple news, and the recent bankruptcy filing by Psystar is no different. Dizzle over at WoA was able to obtain the hearing transcript relating to Apple’s motion to compel Psystar to hand over pertinent financial documents it claimed it either lost or didn’t possess. As is evident from the transcript, Psystar is blatantly full of shit, and Judge Alsup simply doesn’t buy into their logically flawed attempts to explain away their shady behavior.

THE COURT: These are issues that you agreed on, or
18 things that you want me to decide?
19 MS. CHUNG: No. These two issues are still
20 outstanding.
21 And we have agreed, in the sense that Mr. Springer
22 will check on the attachments to the e-mails which have not
23 been produced.
24 And now I understand that some of the e-mails
25 attachments were corrupted, as well as some of the attachments.
1 In the conversion from Psystar to its counsel, the export did
2 not function or did not work correctly.
3 MR. SPRINGER: That’s generally correct, your Honor.
4 The document attachments to e-mails that — Psystar
5 has produced a number of e-mails. A number of those e-mails
6 that have been produced reference the existence of an
7 attachment. In a number of instances, those attachments have
8 not been produced. It is a result of — not because Psystar is
9 withholding the attachments for any reason, but because the
10 attachments have been corrupted. And it appears that that
11 corruption of the attachment has something to do with the
12 e-mail system that they use as a whole.
13 So we have identified the make and model of the
14 e-mail system, as it were. And we’re going to try to work to
15 do something. Either the file itself — the original file is
16 still present with Psystar, we believe. And we’re going to try
17 to find some way that we can get Apple to have access to those
18 original attachments, those original documents somehow, because
19 there’s a problem moving the file from the electronic form into
20 the form that is actually produced to them. The corruption
21 occurs somewhere between there.
22 THE COURT: But if you went to Psystar now and went
23 on their e-mail system and sat in one of the employees’ desks
24 and called up that e-mail and opened the attachment, would it
25 be gobbledygook, or would it be a real — you know, would it
1 read properly?
2 MR. SPRINGER: I don’t want to say for certain. My
3 understanding is that if they were able to open — if someone
4 was sitting in front of a terminal and clicked on a file, or
5 whatever the case might be, some indication of — that there’s
6 an attachment — my understanding is that they would be able to
7 open the attachment.
8 The issue —
9 THE COURT: Why don’t you just open them up and print
10 them out in hard copy?
11 MR. SPRINGER: Because we’ve been producing documents
12 in electronic copy.
13 THE COURT: You can either do this. Produce them in
14 hard copy or electronically. You’ve got to do it one way are
15 the other.
16 MR. SPRINGER: Absolutely.
17 THE COURT: When are you going to do this?
18 MR. SPRINGER: It’s not an issue of are we not going
19 to do it. It’s an issue of: what’s the best way to do it?
20 THE COURT: And also when?
21 MR. SPRINGER: If Apple would like us to go back and
22 manually print out e-mails, to the extent that that’s possible,
23 if that’s the solution they want us to do, that’s the solution
24 we’ll take. If they’d rather have an electronic format —
25 THE COURT: The discovery cutoff in this case is
1 June 26th.
2 MS. CHUNG: Yes.
3 THE COURT: If it turns out this is a delay, I’m
4 going to let them take depositions the rest of the year —
5 MR. SPRINGER: Understood.
6 THE COURT: — because it sounds like a stall to me,
7 Mr. Springer.
8 MR. SPRINGER: It’s absolutely not, your Honor.
9 THE COURT: I’m going to take it as a good-faith
10 sign, but you — that’s it’s not a stall. I’ve never herd of
11 such a thing; of documents being corrupted. This is a new one
12 on me. So you’d better fix it, and fix it promptly.
13 And, Ms. Chung, if it turns out you need more time to
14 take depositions, your side’s going to get an extension if it
15 relates to these documents.
16 MS. CHUNG: I understand.
17 THE COURT: Now, if it’s not relating to these
18 documents, you don’t get an extension; but this doesn’t sound
19 right to me. All right.
20 MS. CHUNG: Well, regarding this issue we are also
21 still talking about how we could get the attachments so that
22 they come with the e-mail, because right now, they produce —
23 some are separate.
24 THE COURT: If they have to write — print it out,
25 they’re going to put on top of it, “This went with e-mail dated
1 June 28th,” or whatever.
2 Look. In the old-fashioned way, we used to do this
3 all the time: hard-copy documents. You could live with that
4 system, if you need to.

Wow. Could it be any more obvious that Psystar was purposefully trying to keep these supposed “corrupted” attachments from Apple? Props to Judge Alsup for layin’ the smack down.

Dizzle also points out that Psystar has filed for Chapter 11 Reorganization, not Chapter 11 Liquidation, so it’s theoretically possible that Psystar is actually going to attempt to remain in business. But given the amount of money that they owe to credit card processing companies and even to companies like DHL and Fed Ex, I sincerely doubt that Psystar will be able to get off the ground again. And if business is so unprofitable, why would they even try?

Now as for finding out who, if anyone, was bankrolling Psystar, a lot of the Apple blogosphere, including yours truly, felt that the truth would finally come out once Psytar’s bankruptcy proceedings got underway.

But Dizzle raises an excellent point:

If there are backers who wish to remain secret, do we really believe that they are so unsophisticated that they had not thought of this? If they have decided Psystar is a lost cause, all they have to do is forgive the debt (if any), and all of a sudden they are not creditors that are required to be disclosed to the bankruptcy court. It took me about two seconds to think of that. I am sure that any large investors are way smarter than I am. Pamela at Groklaw made the same observation:

“I’ve seen a couple of articles claiming that at the hearing we’ll find out who the investors were who were backing this adventure. However the same articles are saying that the investors have backed away, so both can’t be so. If they have pulled out, Psystar will not have to list them in their filings, I don’t think. That may be the point.I think this means we may never know.”

You can check out Dizzle’s full post over here.



2 Comments For This Post

  1. dizzle Says:

    Hey guys, thanks for the link love. I also find it very interesting that Psystar claimed that the email attachments no longer exist in their prior Letter Brief to the Court and now they are claiming they are “corrupt.” The irony is thick; they are corrupt all right. I wonder if they were created on Psystar machines 😉

  2. eQ Says:

    wow.nice info truly help me alot! 😉

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