SCO Preps Appeals Against Novell and IBM

An anonymous reader writes "It looks like SCO will be emerging from the almost dead soon, with new owners and $100 million on board. SNCP is adjusting the business strategy, according to this report on TG Daily, SCO is saying goodbye to CEO Darl McBride and is also preparing to appeal the summary judgments in the cases against Novell and IBM. If you have thought the chapter was closed, think again. Those $100 million can go a long way (even if SCO has to pay 17% interest on it)."

Now that's a deal.

Use your bail-out money to dig the hole deeper.

Re:Now that's a deal.

Exactly. How much longer can this go on?
We've determined that:

1. They never ponied up the code that supposedly infringed, strongly suggesting that it doesn't exist.
2. They didn't even have the right to the copyrights of the Unix code they claimed Linux infringed upon.
3. They (probably fraudulently) collected license money for "protection" against the non-existent claims in #1 on the inelligible code in #2.
4. They did it all while making themselves rich and the stockholders poor through pump-and-dump.

Shouldn't people like this be in jail?

Dear Novel and IBM

It looks like SCO will be emerging from the almost dead soon, with new owners and ... is also preparing to appeal the summary judgments in the cases against Novell and IBM.

This time please use holy water and lawyers made of silver.

Re:Dear Novel and IBM

The logistics problem with that is lawyers can't survive exposure to the holy water either.

Doesn't the sale have to be approved first?

Doesn't the bankruptcy trustee have to approve the sale first? The article sounds like this is already a done deal.. Dang, I need to start reading Groklaw again.

Bad summary

They won't be emerging from the almost dead, and they won't have $100M, and it's not 17%

They're still almost dead - this deal doesn't change anything about the fact that they owe a ton of cash to Novell, and will soon owe more to IBM.

The $100M is really $5M, plus a LOAN of *up to* $100M.

And the loan's interest rate is 17% plus prime (so closer to 21%.)

This is like you claiming that MBNA invested $50,000 in you when you signed up for a new credit card.

I can live with that

Using this 21% loan to file appeals is a lot like using your credit card to buy lottery tickets.

They're that desperate, and I can live with that.

Re:I can live with that

At least with a lottery ticket you have some odds of winning...

Inaccurate subject

First of all this is at least a few weeks old. Check Groklaw. Second they are not giving SCO $100 mil outright. They are giving $5 mil with an option to loan another $95 mil over 5 years.

Re:Inaccurate subject

First of all this is at least a few weeks old. Check Groklaw. Second they are not giving SCO $100 mil outright. They are giving $5 mil with an option to loan another $95 mil over 5 years.

... and they're even backtracking on the whole deal now, saying it depends on due diligence, etc ...

It's YASPS - "Yet Another Stock Pump Scheme". Darl, contrary to his public protests, is VERY happy to be getting out/cashing out.

poetic justice

In a way, it's kind of poetic that these trolls are going to get raped by a loan shark (SNCP) at 17% interest. 95 million times 17% times 5 years is 80.75 million dollars, not compounded. That's an ass raping if I ever heard of it. Plus, they're going to have to pay 37 million to Novell, if they lose their appeal. It feels like something much deeper and more sinister is going on here, and it stinks. I just can't put my finger on it yet.

Re:poetic justice

Don't forget that the loan shark gets a controlling interest in the company. What are the chances the shark (acting as SCO) is going to ask itself (SNCP) for millions of dollars to pay a judgment to Novell? If/when that happens, the shark needs to ask itself whether its worth the risk, even at 21%. It only makes sense if SNCP really believes that SCO can get the Novell judgment reversed on appeal and win some money from IBM. That could be a big, risky bet.

The deal appears to be that SNCP is committed to loaning SCO $95 million, but only once. If the SNCP loans SCO $95 million on Monday and SCO repays the loan on Tuesday, it appears that the commitment has been fulfilled.

Re:poetic justice

I think the deeper and sinister bit is that Darl created a corporate train wreck and funneled a lot of the legal fees directly to his brother. IMHO that was the plan all along - IBM was the wall to audaciously run into and linux was the excuse, and whatever cash fell off SCO was the goal. I think it's worth paying attention to where he goes next and what happens there. To some people he would look like the underdog that got the share price up, took on IBM and he would have beat them too if it wasn't for those darn educated communist geeks and their penguin. He'll have an opportunity for a bigger scam next time.

SCO doesn't have anything yet

They don't have squat until the BK court approves it. Even then they only get 5 million and 95 million in flash cash. If the trustee tells them to put the money in escrow against potential judgments from IBM and Novell, that will flush this deal. This is all show but I haven't figured out who the audience is supposed to be. The BK court isn't going to be impressed.

I'm not sure what they're going to appeal. SCO dug themselves a really deep hole, an appeal is a long shot.

No one with a brain would loan SCO a nickel. It would take a cash cow like Microsoft to convince anyone to get in bed with SCO. Maybe that answers who the audience is supposed to be. Like there are serious players who think SCO's IP claims have merit. Ooooo, scary. If that's the case this is to business strategy what the Zune is to Apple.

Penny Arcade

I think this [penny-arcade.com] comic applies here too...

Put SCO down

SCO is a penny stock now. Somewhere between $0.17 and $0.20 [pinksheets.com] a share. Market cap is $4.3 million.

How many of you would contribute $50 to take a controlling interest in this festering pimple of an "IP" company? If the next ~80,000 /. regulars that read this were willing the company could be taken over and put down, permanently.

Create a non-profit (name it SLASHX, perhaps) or some other legal entity, raise funds and buy shares. The percent of ownership remaining appears on a sidebar with a link to some collection agency. Make Stallman or some other credible figure chairman and just keep buying shares till "we" hold 51%.

I'm no financial guru. Perhaps the idea is naive. However, you can damn well bet I'd contribute.

Re:Put SCO down

IBM could have bought them out at a couple of points cheap--when they started this lawsuit they weren't trading for that much more than they are now. They didn't because it's more important to make an example of these idiots, and therefore to the larger group of potential future intellectual property trolls, as to what happens when you mess with companies because you think using Linux makes them vulnerable. No one should even consider spending a penny to buy them out, they need to die the hard way to make that lesson stick.

Also, it's quite possible Novell will own them anyway before this has finished playing out, because of the $37M SCO owes them. This shell game with loans won't necessarily change that. While they're posturing hard now, I have my doubts as to whether these "angels" will really cough up all that money when the courts force the company to do that.

Won't stick

I had the impression that in both cases the judges have been extremely scrupulous in framing their judgments to rule out successful appeals. It's not as if SCO had any facts to present for consideration, let alone new ones. Appeals to clearly shut cases get dismissed, right?

Will they even get an appeal

I don't care how slick the lawyer is, SCO had a summary judgment against them. Provided the judge in the case dotted all the i's and crossed all the t's those things are damn near impossible to successfully appeal. I'd put the odds against successful appeal at 20 to 1. More likely than not the appeals court will simply say, 'No' and that will be the final whimper of SCO.

who cares yet? this is not factual.

Just a FYI, this deal has not been approved. So all this "SCO is going to be saved" stuff, has no factual basis whatsoever. Bankruptcy court would have to approve of it, and that is not likely at all. So the slashdot article here = incorrect.

The Wizard of Oz

Who keeps giving/lending these clowns money?

Pay no attention to the largest proprietary software company in the world behind the curtain.

Re:What the hell?

Serious answer: Apparently this is Saudi money.
However the jury is still out on weather this is another Microsoft thing like BayStar
http://www.eweek.com/c/a/Desktops-and-Notebooks/Whats-Behind-the-SCO-Buyout/ [eweek.com] SJVN's oppinion incase you are interested

Re:What the hell?

Undead clown lawyers... I'm not gonna be able to sleep tonight.

Re:Why? I just wanna know why?

I think it's Plan 11 from Outer SCO.

Re:PJ must be relieved...

Actually, Groklaw [groklaw.com] has begun to deal with other cases of dubious IP claims and attacks on free software, open standards, and so forth, so it will still have a reason for existence once SCO is kaput. The current top article, for example, is about the ISO BRM on OOXML.