Darl McBride Leaving SCO?

JoGiles writes "Linux-watch is reporting that while The SCO Group may go on to pursue its plans with a $100 million buyout, it will do so without its longtime CEO Darl McBride. Buried in the proposed MOU (Memorandum of Understanding) between Unix vendor and Linux litigator SCO and SNCP (Stephen Norris & Co. Capital Partners) is the note that "upon the effective date of the Proposed Plan of Reorganization, the existing CEO of the Company, Darl McBride, will resign immediately.""

Pending approval...

Assuming all of this stuff is approved by the bankruptcy courts for starters. I find it amazing how the tech media latches on to what MIGHT happen and not what actually HAS happened. "The SCO Group" didn't get any money yet, but many in the tech media act like they did.

Of course, that quasi-journalistic slut, MOG, projects that McBride's leaving was a goal of the Groklaw audience, when in fact, it never was.

Re:Pending approval...

THIS is actually the most important point of all.

And are there any possibility to let the court know what the public opinion on this is? The Chapter 7 [wikipedia.org] should be more appropriate.

At least SCO weren't eligible to file for Chapter 12 [wikipedia.org]. Wonder what would have happened if they also were owning a huge farm in the midwest too...

Re:Pending approval...

Assuming all of this stuff is approved by the bankruptcy courts for starters.

Good point. The quick headlines that were generated for stories are highly inaccurate, i.e. its not a $100 million buy out and it looks to be only $5 million at first glance.

It could turn out after a full review of the facts that this is just another attempt to perpetrate additional theft of Novell's cash through the bankruptcy court as was the last attempt to sell Novell's assets [groklaw.net].

We'll have to wait and see how Novell and IBM respond in the bankruptcy court.

Re:Pending approval...

I suspect that if it is a real offer the judge will approve it for two reasons. First, there are clauses that cover owed expenses in the event of loss(es) at trial(s) and second it gets this out of his court. it will be awfully hard for a creditor, even one that has so much at stake as Novell, to complain when SCO is floated this "loan" to have an objection if it will get them paid. That is, after all, why we are in the bankruptcy court in the first place.

The objection to the first sale was because there was no clause covering losses of the cases. Also, they were trying to sell property in dispute. That isn't the case with this offer. This is a hostile takeover plain and simple.

I predict the judge will allow it *IF* there is some up front money involved such as a trust or some such to cover a fall through. I don't think the agreement on its face will carry the day. In short, money talks.

Re:Pending approval...

It's not truly a buyout. However, it is not uncommon in bankruptcy for a company to take out a new loan that is used to pay off all the old ones (aka consolidate loans). In this situation its kinda shady how they're doing it, because they're trying to save Darl from being responsible for everything...that is the bigger kicker here if this actually goes through, not just the money infusion.

It's "up to" $100M

A fairly important distinction, as anyone with Cable or ADSL will know.

I can assure you, when Novell is awarded the money SCOXQ.PK owe them, there will be none there.

settle in for a long ride

I fear that we're in for a long ride on this one. Back in the Day, we all figured that the SCO lawsuit would be quashed within 6 months. I remember a talk at a LinuxWorld several YEARS ago where Eric Raymond or someone openly challenged them to show us all where the 'infringing code' was. Several years ago...

Lawsuits around the GPL and Linux codebase will become a permanent fixture. Our dreams of a single case to finalize up everything nice and tidy are never going to come true. I have every confidence that Open Source will survive, and the GPL will remain intact, but the lawsuit will always be there-- there's just too much potential money sloshing around, and law schools keep pumping out the evil.

Re:

Lawsuits around the GPL and Linux codebase will become a permanent fixture

Except for that quotation that often gets mentioned here: "first they ignore you, then they laugh at you, then they fight you, then you win", or something like that.

They can't remain

Re:settle in for a long ride

It's bizarre and sad that first Turing and von Neumann invented programmed machines, then the Unix folks invited everyone to write good things that other people could use, and now, the fact that someone owns software means that if you want to write a program and give it away, you have to prove that no-one owns it. It's not that code wants to be free. A lot of it doesn't. But why should the code that does want to be free have to go to court first?

Re:settle in for a long ride

Back in the Day, we all figured that the SCO lawsuit would be quashed within 6 months. I remember a talk at a LinuxWorld several YEARS ago where Eric Raymond or someone openly challenged them to show us all where the 'infringing code' was.

In a way it was quashed in about 6 months. Based on their stock price [yahoo.com] the fairy tale was over quickly as it became apparent to any rational being that it was all BS. And requesting the code was the most obvious blow to their case as any argument against pointing to the publicly viewable code was simple nonsense.

Other than a few "journalists" with questionable credibility no sane person believed a word coming out of tSCOg's mouth pieces once they refused to show the code. And the ultimate blow was when the judge explained how close they came to losing the entire case on a summary judgment because they failed to produce even the most minute amount of evidence [silicon.com] to support their reasoning for being in court in the first place. That statement from the judge was based in part on all the outrageous claims the tSCOg mouth pieces had been spewing in the media and their failure to simply show the code.

Yes it has dragged on for years, and yes it cold drag on for more years, but the game was up long ago and most people know that. Now all we can hope for is that IBM and Novell will be willing to continue spending cash on the lawsuits long enough to ensure the perps and backers of this scam lose significant face.

And you are right, no matter how this ends it will never be the end, there are several people making massive profits who feel threatened by open source and they will continue to fund idiotic attacks like this as long as its a financially viable option for them. There are also the rabid anti-FOSS individuals who will rant until the end of time because they are so enamored by the likes of Microsoft that they'll believe and rabidly support every piece of FUD they are spoon fed.

Yeah, its not over, and we'll never hear the end of it. But life goes on.

Re:settle in for a long ride

I would think that whatever subsequent cases happen, judges and defense will be informed by this case.

I think this is probably the most important point you make with regard to future lawsuits.

The courts in the SCO cases have given SCO every opportunity to produce evidence to back their case. SCO has spent millions trying to find that evidence and by the time they realized it did not exist they had already dug themselves in way too deep and could not back out.

Also, as a result of the SCO cases, the BSD lawsuit agreement [groklaw.net] was brought out in to the public. What is interesting here is the amount of Unix code that is now licensed under a BSD license. It is my understanding that BSD licensed code can be included in the Linux kernel and released under the GPLv2 along with the rest of the Linux kernel.

Being that there is no Unix code illegally included in Linux, it would seem this avenue of attack is no longer open (or at minimum, not feasible). What worries me more is the next logical vector of attack, patents. I agree with a statement you made earlier, "I think Darl was just a front, as Ransom Love was for Caldera. Ralph Yarro was the real boss of both. I guess he's out too (not sure), but IMO the new investor is pursuing the same program, and Microsoft is still behind it.".

Microsoft themselves could never sue a Linux company directly for a couple of reasons. First of all MS does not need the bad publicity it would bring. They currently have the perfect scapegoat, why not continue using it? Secondly, Microsoft has anti-trust issues to concern themselves with that their scapegoat does not have.

The only solace that I find in the fact that the next war will be based around patents is that the courts have become better educated in technology and that Linux has been virtually exonerated of any copyright issues. Quite frankly, patents scare me.

NOT $100 Million, THAT WAS HYPE.

Folks,

This is not a $100 Million dollar offer. That was hyperbole. There will be a line of credit, but going in there is only a couple of million to take the stock profit and then what they need to pursue the case and pay off interest on existing debt as it is billed. Say $10 Million max. Remember that the Benchmark investment was unwound? This one will probably go through the same thing.

Bruce

Re:NOT $100 Million, THAT WAS HYPE.

Oops, that's "take the stock private".

Re:NOT $100 Million, THAT WAS HYPE.

And the interest rate is LIBOR + 1,700 Basis Points. That translates to 20% - 22.5% annual interest (using LIBOR rates over the past 1 year) which must be paid MONTHLY. SCO has lost money every single quarter of its existence, except for its blockbuster one in which it sold licenses to Sun and MS (which the court found to be improperly converted in its preliminary summary judgments). And now they have to pay credit card rates for financing?

Hello conspiracy theorists! This "deal" is nothing more than a cover to take the company private in an attempt to protect it from investigation into the PIPE fairies who funded its litigation from the word go. And you can bet (based upon the failed York deal they tried to shove down the BK court's throat in November) it was cooked up by people more powerful and "financially creative" than the existing SCO management.

Don't be surprised if an attempt to limit his liability is Darl's Golden Parachute.

He will not leave a poor man

Darl McBride will leave a rich man. At least richer than he is now. From my own estimates, he will leave at least US$ 10 - 14 million richer. At 4% interest in a fixed deposit account, Mr McBride can live a pretty decent life even in America's most affluent neighborhoods for virtually no work to be done.

thank goodness

McBride can live a pretty decent life even in America's most affluent neighborhoods for virtually no work to be done.

I know there's no justice in this, but we really don't want this guy doing any more work.

Re:thank goodness

Actually, I would -- making small rocks from large rocks while wearing a nice bright orange jumpsuit.

IBM and Novell Will Object

This plan has a better chance than the York debacle, but IBM and Novell will certainly want to see the money. If Norris Capital Partners has to front the 100 million in escrow this could get interesting.

For Microsoft this has to be like being caught in an endless corporate version of Fatal Attraction. Backing the SCO litigation probably looked good when the Vista release was delayed but now SCO has them by the short curlies. MS has to keep coming up with cash for their demanding paramour. And it's getting harder to design deniable sources for that cash. Hard to say what SCO has on them, maybe they keep threating to go state's evidence on the anti-trust behavior. Maybe MS thinks it's worth a couple hundred million to keep the litigation cloud intact. I'm leaning toward the former. This can't be worth it from a business strategy perspective. It's expensive and it's not working. If anything it's backfiring. It's the kind of advertising that Linux can't normally afford.

It's really hard to tell if this is calculated malfeasance or serial incompetence. With Microsoft it's sometimes hard to tell the difference.

Most definitely this doesn't have anything to do with McBride, other than I'm sure they'll want to keep him quiet. Which means making sure he's happy, which will likely involve a large sum of cash when he leaves.

This whole thing is such a loser. If MS would put that time and money into developing an operating system and other software that provides value to the user, they could forget all this stupidity with SCO. It's tacky, pathetic and...should be...beneath the dignity of a world class company.

Is it just me ...

... or does "Memorandum of Understanding" sound like the most boring D&D object ever? "You kill the orc. As he dies, he drops the Memorandum of Understanding, detailing the conflict between you and him and the specifics of its resolution. +2 mediation points."

Not the real bad guy

I think Darl was just a front, as Ransom Love was for Caldera. Ralph Yarro was the real boss of both. I guess he's out too (not sure), but IMO the new investor is pursuing the same program, and Microsoft is still behind it.

Re:Not the real bad guy

There are some people in the world who are entirely confident in their moral rightness, no matter how wrong they are. Such a person will seem forthright, etc., in a chance encounter. But I think you do see that he was clearly wrong about IBM: that company did not turn public opinion against SCO. I had a role in turning public opinion against SCO, and you did, and some zillion other Free Software / Open Source fans did. Mr. Yarro was still unable to accept, when you spoke with him, that there was a large community who fought him because they were morally offended. His own feeling of his moral correctness doesn't fit that, so to him it must not be true.

Bruce

Re:so long...

I doubt he will, he'll be awarded a massive payout "in recognition for hiw work over the last years" and to "compensate him for future earnings", etc etc.

Actually, I wouldn't be surprised if he got sued by Novell rather soon (not that this would have to do anything with him leaving, they will sue him anyway). Darl McBride got a huge bonus for making the company profitable - however, the only profits that the company made is money that according to Novell was actually theirs. That will be decided in the courts in April or so. I am quite sure that if the court decides for Novell, and Novell cannot get all their money from SCO, and the bonus paid to McBride turns out be incorrect, then Novell will go for his own money.

It is not something that companies would normally do, but in this case there are exceptional circumstances.

Re:

Mr. Norris was a co-founder of the Carlyle Group (and ironically the current head of that group is the ex-CEO of IBM ;).

Its all BIG money though...which begs the question - why? I mean does any really believe this up to $100M investment in the walking corp

Re:

it's not because their products suck. is because their product is a unix for x86 platform, so it have to compete with "good enough" products that are pretty much free (as both in freedom and beer) like linux, xBSD, solaris x86.

and in the higher end, even o

Re:The man's name

"I'm more concerned about the mean temperature of squirrel testicles in north-western Canada."

Ok, here you go : Maturation and Reproduction of Northern Flying Squirrels in Pacific Northwest Forests [209.85.165.104]