SCOUR’S ATTORNEYS
MAY BE LIMITED

Both Fox and Disney have filed motions to block Perkins Coie from fully representing Scour on the basis of conflict of interest.

Scour is currently in the midst of both a copyright infringement suit and an attempted sale of its assets to Listen.com.

At a four-hour hearing in Los Angeles bankruptcy court Wednesday (11/1), Judge Kathleen March severely limited Perkins Coie's ability to represent the beleaguered tech firm, reports Inside.com. Lawyers for the high-powered firm of Perkins Coie are currently representing both Fox and Disney in pending, unrelated suits.

According to Inside, Judge March declared Perkins Coie in conflict, excoriating the firm openly in court, but granted a continuance on Perkins Coie's petition to serve as general counsel until Dec. 15.

Perkins Coie has been paid a total of $250,000 in retainer fees by Scour, according to its application to serve as counsel: $150,000 for general counsel and $100,000 for work as special counsel on the New York copyright infringement suit. The application claimed that Perkins Coie will be limited in its representation of Scour, because of the company's general lack of funds. The firm says that fighting the infringement suit has "bled [Scour] financially to near death" and that the company will never be able to fight the claims anywhere but in a bankruptcy setting.

According to the plaintiffs' reading of the firm's application to serve as general counsel for Scour, Perkins Coie can withdraw as counsel if certain issues concerning the copyright suit are not resolved within three months of the application being granted.

Fox and Disney have argued that this stipulation would place an unfair burden on the courts in the process of trying the case. And, were Perkins Coie to withdraw as counsel, Scour might claim that event as reason not to lift the stay in the copyright suit, thus giving Scour a "tactical advantage."

Whichever way that aspect of Scour's future is resolved, the more pressing concern is one of money. Scour's bankruptcy filing on Oct. 20 sought emergency relief to pay the 11 remaining employees. Scour laid off 52 employees on Sept. 1. According to the bankruptcy filing, the employees have not been paid in two weeks.

"If the [employees] are not timely paid," said Craig Grossman, in-house general counsel and VP of operations for the company, "Scour believes that they may leave the company, thus forcing Scour to shut down its operations."

Judge March granted an emergency petition. But it is unclear whether the funds to pay the salaries are actually available.