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SCO Files for Chapter 11 Bankruptcy
Posted by
Zonk
on Fri Sep 14, 2007 03:19 PM
from the a-true-catastrophy dept.
from the a-true-catastrophy dept.
Can you say "the SCO, the" in German? writes "Trading of SCO's stock has been halted on news that SCO has filed for Chapter 11 Bankruptcy. This move just so happens to fall on the eve of SCO's trial with Novell. One would think that their prior boasts were mostly bluster, that they believe they have almost no chance of prevailing at trial, and that they're now desperate to protect their executives from SCO's creditors while seeking yet another delay. From the release: 'The SCO Group intends to maintain all normal business operations throughout the bankruptcy proceedings. Subject to court approval, SCO and its subsidiaries will use the cash flow from their consolidated operations to meet their capital needs during the reorganization process. "We want to assure our customers and partners that they can continue to rely on SCO products, support and services for their business critical operations," said Darl McBride, President and CEO, The SCO Group. "Chapter 11 reorganization provides the Company with an opportunity to protect its assets during this time while focusing on building our future plans."'"
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Submission: SCO Files for Chapter 11 Bankruptcy by Anonymous Coward
[+]
Your Rights Online: SCO Blames Linux For Bankruptcy Filing 321 comments
Stony Stevenson writes "SCO Group CEO Darl McBride is now claiming that competition from Linux was behind the company's filing of Chapter 11 bankruptcy. 'In a court filing in support of SCO's bankruptcy petition, McBride noted that SCO's sales of Unix-based products "have been declining over the past several years." The slump, McBride said, "has been primarily attributable to significant competition from alternative operating systems, including Linux." McBride listed IBM, Red Hat, Microsoft, and Sun Microsystems as distributors of Linux or other software that is "aggressively taking market share away from Unix.""
[+]
Your Rights Online: Novell to SCO - Pay Up 151 comments
gosherm writes with word that, now that the dust is beginning to settle on the long-running SCO case, Novell wants to get paid. Now. They're requesting that the customary stay on SCO's finances (as a result of their bankruptcy) be lifted so that Novell can begin recouping some of its losses from the protracted legal battle. "'We need to adjudicate if this is money owed to Novell or if it is Novell's property,' said Bruce Lowry, spokesman for Novell. That could determine how quickly Novell can recover those funds. And time is of the essence since there's a possibility SCO 'may run low or even completely out of cash during the process of trying to reorganize,' Novell said in court documents filed Thursday. Novell is also trying to protect royalties SCO collects from Unix and Unixware software licensees and remits annually to the software developer. SCO is required to continue to remit between $500,000 and $800,000 annually to Novell -- the next payment is due Nov. 14. SCO remitted $696,413 to Novell between the third quarter of 2006 and the second quarter of this year."
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Predicting SCO's Actions Post Bankruptcy 102 comments
eldavojohn writes "SCO lost last year and began the bankruptcy filings a long time ago but PJ has some speculative bad news on what they retain through the bankruptcy proceedings. SCO proposes to sell a number of assets to an outfit called UnXis, which PJ characterizes this way: 'It starts to hint that this is more a renaming, taking in some new management who seem to have financial expertise, and SCO keeps skipping along as unXis, with the dangerous litigation spun off safely into a litigation troll.' In their filings SCO says they retain 'their litigation and related claims against International Business Machines Corporation, Novell, Inc., AutoZone Corporation, Red Hat and certain Linux users which are not material customers of UnXis (excluding certain large-scale users of Linux servers) that are claimed to have infringed against UNIX copyrights.' So that's still a possibility they could go after anyone who is a 'certain Linux user.' And what's even worse is that they'll retain a patent for running multiple Java applications on a single Java virtual machine. We may not be out of the SCO litigation woods yet."
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Sad, sad news (Score:5, Funny)
Re:Sad, sad news (Score:5, Funny)
Parent
Re:Sad, sad news (Score:5, Informative)
There's nothing to cheer about here. This is SCO's way of weaseling out of their legal liabilities. They conceivably now will not have to pay Novell, or at least not for a long while. It gives them time to continue their court cases without having to settle their debts.
It's a tactic. They're not out of business, at least not yet.
Parent
Re:Sad, sad news (Score:5, Insightful)
Personal responsibility is for suckers and fools.
Smart people form corporations so they can lie, cheat, and steal with impunity.
Parent
Re:Sad, sad news (Score:5, Insightful)
Rant/
Just look at all they have learned by going through the courts with no evidence and being laughed at by the people who review the case and get the facts instead of reading their press releases. They are literally filing for bankruptcy and assuring their customers that they are fine and can rely on them at the same time... AT THE SAME TIME! No reasonable company would be so immune to shame, so ignorant of the mocking thats going on right in front of them, and still be able to tell people that everythings OK. That these bottomdwellers are still making a living, still giving themselves bonuses and trying to protect their stock is a slap in the face for american justice. This is another Enron, this is another corporation exec scandle happening right now, at this very moment. They are telling us that they don't care that they are wrong and have taken the courts time and our money and threatened people, intimidated customers, extorted from innocent and ignorant law abiding citicens and companies who only wanted to avoid doing the wrong thing and pay whatever license fees to whoever owned the code they were using. They have either planned this and acted accordingly to draw it out, or they employ the most ignorant legal councel out there to advise them. No proof, no problem, No evidence, no problem, No case, no problem. Lets all make a bunch of money! Dirty rat bastards. And we will as a nation let another one get away with it. The people who made these decisions will walk away with millions. We'll complain and let them walk. Accomplices to the raping of this country.
Parent
Re:Sad, sad news (Score:5, Interesting)
Ah, but it's easy to placate your customers when you don't have any.
Parent
Re:Sad, sad news (Score:5, Informative)
That isn't to say that SCO is safe, but news that they're filing for bankruptcy doesn't really mean anything.
You want an example of companies that go bankrupt while maintaining operations?
See: US Airline Industry
Parent
Re:Sad, sad news (Score:5, Funny)
I see you haven't flown anywhere this summer...
Parent
seeking bankruptcy and still in business (Score:5, Informative)
They are literally filing for bankruptcy and assuring their customers that they are fine and can rely on them at the same time... AT THE SAME TIME!
That's what Chapter 11 bankruptcy is all about. It allows you to reorganize your business and liabilities so you can stay in business.
FalconParent
Get out the violin (Score:5, Funny)
And tell the fat lady to start warming up.
It's been a long time coming, but still they had to know this day would arrive. If shareholders weren't really in it for the crapshoot of beating IBM and Novell for $Billion$ they'd have a case against Darl and his lot for running the business into the ground pursuing frivolous lawsuits.
SCO's income from normal opperations must be down to a trickle with Linux and Windows Server vying for most of the market.
Emerge from Chapter 11? I can't see how, unless somehow there was a reversal of court decisions and they're doing nothing to grow their product market.
Re:Get out the violin (Score:5, Insightful)
"SCO is doing this to make Novell into a creditor with respect to the money SCO owes to Novell."
Won't work. Novell's claim isn't as a creditor. Their claim is "equitable", meaning that SCO is holding theor property ($$$), not that SCO owes them money. When you go bankrupt, anyone who can show that they own property you're holding on to can claim it from the trustee.
This happens a lot with vending machines, for example, when a plant goes bust. The owner proves that the machine is theirs (not leased or anything - it really is theirs), and they then get to pick it up.
Since Novell already has a judgment saying that SCO is guilty of conversion, and the question is "how much", they have a prior claim to the property (money) in question. SCO is dead.
Parent
Re:Get out the violin (Score:5, Insightful)
Parent
w00t!!!! (Score:5, Informative)
Re:w00t!!!! (Score:5, Informative)
I'm afraid a "black dress" for wearing to the upcoming SCO funeral will be more useful now.
Parent
Oh man... (Score:5, Funny)
One word (Score:5, Funny)
Re:One word (Score:5, Informative)
Parent
Re:One word (Score:5, Funny)
Can you say Schadenfreude in English?
Yes. It's pronounced "ha HA!", preferably in a high-pitched, somewhat nasal voice reminiscent of a certain cartoon character.
Parent
It's Been Fun (Score:5, Insightful)
For those of you who bought SCOX stock in hopes that they would win this case, you had better sell it. In the past 20 minutes, it has dropped from $0.66 to $0.37 cents (and still is dropping).
According to your market data your net income was a $16.6 million loss. And when your total revenue was under $30 million, you really shouldn't even try to keep operating. Why is this Chapter 11? I guess it's going to come down to one unkillable lawyer with SCO tattooed on his chest. At that point, we'll have to call an exorcist.
Pump and dump (Score:5, Interesting)
Parent
Re:It's Been Fun (Score:5, Informative)
Parent
Re:It's Been Fun (Score:5, Funny)
Parent
What SCO told the court (Score:5, Interesting)
Now SCO is facing the exact same judge on Monday morning over the issue of how much money they owe Novell. I predict an interesting day in court
* OK, I was reminded of it by something someone (anonymous, so I can't give credit) said on Groklaw.
Judge Kimball has next week off (Score:5, Insightful)
Parent
And now, ladies and gentlemen... (Score:4, Funny)
*drum rolls*
Ding Dong! The Witch is dead. Which old Witch? The Wicked Witch!
Ding Dong! The Wicked Witch is dead.
Wake up - sleepy head, rub your eyes, get out of bed.
Wake up, the Wicked Witch is dead.
Chapter 11 (Score:4, Informative)
Re:Chapter 11 (Score:4, Informative)
Parent
Re:Chapter 11 (Score:5, Interesting)
Either way 95% is roughly 5 million dollars more than all of SCO's value Liquidated. I wonder if the bankruptcy trustee can declare Darl Mcbride's million dollar bonus for those two sales as invalid and ask for it back? I do hope so.
Parent
DFWT (Score:5, Funny)
Re:DFWT (Score:5, Funny)
Parent
Who are these people? (Score:5, Funny)
Aside from the lawyers for whom SCO is a source of billable hours, who relies on SCO for any products, support, or services? Are these the same folks looking to George W. for stategic planning? The masses going to Michael Vick for pet care tips? OJ for public relations?
Re:Who are these people? (Score:5, Interesting)
Sberbank (Savings Bank Of The Russian Federation) Chooses SCO's OpenServer 6 to Upgrade Thousands of Servers [yahoo.com].
They must be feeling really good about that decision now.
Parent
come back? nah (Score:5, Insightful)
There are tons of good Unix and Linux distributors out there... no reason to choose SCO anymore.
You want free and good? Linux and BSD. You want enterprise level? IBM and Sun. You want Windows-based? Dell and HP. You wanna convert your entire revenue stream into attorney fees billed at $400/hr? Take SCO.
Good Job Darly! (Score:5, Funny)
NEWSFLASH (Score:4, Funny)
When asked about these future plans, Mr. McBride announced his intention to sue every single internet user, based on the fact that the Internet became as popular as it did due to traffic running on products that were based on SCO intellectual property. "I personally was the creator of these tubes and filed for a patent back in 1956". Mr. McBride became irritated when this reporter informed him that the Internet did not in fact run through tubes, rather through optical lines and copper cables. "Where have you been? You must have missed my good friend Ted Stevens describing how the internet was a series of Tubes, just stick to what you know, which is
Reporting live from Emerald City, this is T. Bert signing off.
"the SCO, the" (Score:5, Informative)
Sideshow Bob is applying for parole claiming that he wouldn't pose a danger to Bart:
Lawyer: "Don't you have a tattoo that says 'die, Bart, die' on your chest?"
Sideshow Bob: "No! That's German. It means 'the Bart, the'".
Parole Officer 1: "No one who speaks German could be an evil man!"
Parole Officer 2: "Parole granted!"
Re:"the SCO, the" (Score:5, Funny)
But since Bart is male, shouldn't it be "der Bart, der"?
Unless he's talking about several Barts, but then you'd have to conjugate the noun as well and it'd become something like "die Barten, die". Or "die Bärte, die"?
Actually Bärte means "beards" in German, with the singular "Bart" which is masculine. So my best guess is that the tattoo was a badly written German version of "the beards, the".
So what's Sideshow Bob's interest in beards anyway? As possibilities we have Jasper Beardly, the Sea Captain, but most interestingly, Krusty's father: Rabbi Hyman Krustofski.
My guess is that Sideshow Bob is either a latent Nazi with a hatred for Hyman, or he is one of these wusses who cannot grow a decent beard and is taking it out on Krusty.
An alternate theory is that I have too much time on my hands.
Parent
STILL claiming UNIX in the press release! (Score:5, Interesting)
"SCO owns the core UNIX operating system, originally developed by AT&T/Bell Labs and is the exclusive licensor to UNIX-based system software providers."
Those SCO guys are a real pantload! Hahahahah
Does anybody find it odd... (Score:5, Interesting)
Buh-BYE! (Score:5, Funny)
Looking backwards (Score:5, Funny)
By Daniel Lyons, 06.18.03, 12:00 PM ET
[ ... ]
In other words, like many religious folk, the Linux-loving crunchies in the open-source movement are a) convinced of their own righteousness, and b) sure the whole world, including judges, will agree.
They should wake up. SCO may not be very good at making a profit by selling software. But it is very good at getting what it wants from other companies. And it has a tight circle of friends.
[ ... ]
Bad Faith (Score:5, Interesting)
Re:FSCK YEAH! (Score:5, Funny)
Parent
Re:Stock plummetage (Score:5, Informative)
Parent
Re:Dear Darl, (Score:5, Insightful)
Bankruptcy prevents an entity's creditors from forcing liquidation of the entity's assets. If Novell won it's case against SCO, Novell could enforce it's judgment against SCO and force SCO to dissolve. If SCO was dissolved the case against IBM would disappear. Now that SCO has filed for bankruptcy it is protected from its creditors. Therefore Novell cannot get the licensing fees SCO owes it, and SCO can continue to exist.
Filing for bankruptcy is not SCO tossing in the towel, it is more like SCO knows it is going to lose, and is now trying to bite off Novell's ear to get Disqualified instead of Knocked Out.
Parent
Re:Dear Darl, (Score:5, Informative)
The court ruled that the money *belongs* to Novell. That's a far different legal issue than SCO owing money to Novell.
It's like a burglar trying to claim bankruptcy in order to keep the stuff he stole. Since the stuff isn't actually his (and in this case has been declared so in a court of law), bankruptcy doesn't protect it.
Parent
Mod Parent Up. (Score:5, Informative)
It might turn into a Chapter 7 filing afterwards, and SCO might be forced to liquidate. This is unlikely, however. In the interim, they'll try to convince a judge or referee that they have IP assets that need protecting, along with their agreements with various companies, and will produce a lot of smoke in their quest to simply survive.
Much attorneys fees will be spent by many companies. Much continued incivility and plain poo will continue to be the hallmark of SCO's perhaps brief existence. Like others, they don't quit until they're just dead. Don't look for much come-uppance. This ends badly, just as it began badly.
Parent
Re:Dear Darl, (Score:5, Insightful)
That would be a bad thing, we don't want the IBM case to disappear, we want IBM have a very strong favorable ruling. Any other outcome means this was all a waste of time with no precedents set.
Parent
Re:Obvious (Score:4, Informative)
Not quite. In the case of the royalty money, the rulings thus far are that the royalties are Novell's, not SCO's, money. There's a question of the dollar amount to be determined, but that money isn't a debt owed to Novell so bankruptcy doesn't shield it. Read up on "conversion", which is the term the judge used. If you steal money from someone, you can't use bankruptcy protection to retain it since it's not yours in the first place.
Parent
Re:Yay... (Score:5, Funny)
Parent