diff --git a/tgt-mgmt-fixed-m-system-o-delete-handling.patch b/tgt-mgmt-fixed-m-system-o-delete-handling.patch
new file mode 100644
index 0000000..e451bfc
--- /dev/null
+++ b/tgt-mgmt-fixed-m-system-o-delete-handling.patch
@@ -0,0 +1,48 @@
+From 0b88336c4b188f48e6bd2e8c94e0467dc805cc38 Mon Sep 17 00:00:00 2001
+From: Roi Dayan <roid@mellanox.com>
+Date: Thu, 28 Jun 2012 19:56:04 +0300
+Subject: mgmt: fixed -m system -o delete handling
+Git-commit: 0b88336c4b188f48e6bd2e8c94e0467dc805cc38
+Patch-mainline: v1.0.29
+
+system_active was reset only in case when mgmt response was carrying data.
+In case of deleting system, response code was returned in err field of the header
+therefore system was not shut down.
+
+Signed-off-by: Alexander Nezhinsky <alexandern@mellanox.com>
+Signed-off-by: Roi Dayan <roid@mellanox.com>
+Signed-off-by: FUJITA Tomonori <fujita.tomonori@lab.ntt.co.jp>
+Acked-by: Lee Duncan <lduncan@suse.com>
+---
+ usr/mgmt.c |    9 +++------
+ 1 file changed, 3 insertions(+), 6 deletions(-)
+
+diff --git a/usr/mgmt.c b/usr/mgmt.c
+index ef1b265..56f89bb 100644
+--- a/usr/mgmt.c
++++ b/usr/mgmt.c
+@@ -585,13 +585,8 @@ static void mtask_recv_send_handler(int fd, int events, void *data)
+ 		err = concat_write(&mtask->rsp_concat, fd, mtask->done);
+ 		if (err >= 0) {
+ 			mtask->done += err;
+-			if (mtask->done == (rsp->len - sizeof(*rsp))) {
+-				if (req->mode == MODE_SYSTEM &&
+-				    req->op == OP_DELETE &&
+-				    !rsp->err)
+-					system_active = 0;
++			if (mtask->done == (rsp->len - sizeof(*rsp)))
+ 				goto out;
+-			}
+ 		} else
+ 			if (errno != EAGAIN)
+ 				goto out;
+@@ -603,6 +598,8 @@ static void mtask_recv_send_handler(int fd, int events, void *data)
+ 
+ 	return;
+ out:
++	if (req->mode == MODE_SYSTEM && req->op == OP_DELETE && !rsp->err)
++		system_active = 0;
+ 	tgt_event_del(fd);
+ 	close(fd);
+ 	mtask_free(mtask);
+
diff --git a/tgt.changes b/tgt.changes
index d4f52c4..2423edc 100644
--- a/tgt.changes
+++ b/tgt.changes
@@ -1,3 +1,10 @@
+-------------------------------------------------------------------
+Fri Oct 26 01:14:03 UTC 2012 - lduncan@suse.com
+
+- Add tgt-mgmt-fixed-m-system-o-delete-handling.patch: Fixes
+  shutdown hang (bnc#767438)
+- Removed PIDFILE completely from init file, as it is not used
+
 -------------------------------------------------------------------
 Tue Jul 10 08:25:16 UTC 2012 - cfarrell@suse.com
 
diff --git a/tgt.init b/tgt.init
index e50a9d7..da0d018 100644
--- a/tgt.init
+++ b/tgt.init
@@ -18,7 +18,6 @@
 #
 
 DAEMON=/usr/sbin/tgtd
-PIDFILE=/var/run/tgtd.pid
 TGTD_CONFIG=/etc/tgt/targets.conf
 
 # Source LSB init functions
@@ -158,7 +157,7 @@ case "$1" in
         ;;
   status)
 	echo -n "Checking for SCSI target service"
-	checkproc -p $PIDFILE $DAEMON
+	checkproc $DAEMON
 	rc_status -v
         ;;
   *)
diff --git a/tgt.spec b/tgt.spec
index 341e627..14367f2 100644
--- a/tgt.spec
+++ b/tgt.spec
@@ -35,7 +35,9 @@ Source:         %{name}-%{version}.tar.bz2
 Source1:        %{name}.init
 Source3:        %{name}.services
 Patch1:         %{name}-git-update
-Patch11:        %{name}-fix-build
+Patch2:         %{name}-fix-build
+# PATCH-FIX-UPSTREAM tgt-mgmt-fixed-m-system-o-delete-handling.patch [bnc#767438] - lduncan@suse.com
+Patch3:         %{name}-mgmt-fixed-m-system-o-delete-handling.patch
 BuildRoot:      %{_tmppath}/%{name}-%{version}-build
 
 %description
@@ -56,7 +58,8 @@ Authors:
 %prep
 %setup -n %{name}-%{version}
 %patch1 -p1
-%patch11 -p1
+%patch2 -p1
+%patch3 -p1
 
 %build
 %ifarch ppc ppc64