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SCO Preps Appeals Against Novell and IBM 163

Posted by samzenpus
from the harder-to-kill-that-the-tarrasque dept.
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)."
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SCO Preps Appeals Against Novell and IBM

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  • What the hell? (Score:2, Interesting)

    by ctishman (545856) <ctishman@@@mac...com> on Thursday March 06, 2008 @12:12AM (#22659474)
    Who keeps giving/lending these clowns money?
  • by belmolis (702863) <billposer@@@alum...mit...edu> on Thursday March 06, 2008 @12:53AM (#22659754) Homepage

    Even a large infusion of cash is unlikely to do SCO any good. They have no income to speak of and no product likely to generate any. Their lawsuits have no chance of succeeding given the ruling that they never acquired the Unix copyrights from Novell. Even in the extremely unlikely event that this is overturned on appeal, they still have to prove infringement of their copyrights, which, with discovery complete, they have still been unable to do, and they have to overcome the problem that they themselves distributed Linux under the GPL, which is a huge problem for them. Finally, no matter what happens, they are going to have to pay millions to Novell since they failed to pass on to Novell the income from their franchise to sell Novell's Unix property, for which they (SCO) were merely to receive a 5% fee. Money will pay the lawyers a little bit longer, but it isn't likely the lawyers can postpone the end very much.

  • Put SCO down (Score:5, Interesting)

    by TopSpin (753) * on Thursday March 06, 2008 @01:04AM (#22659836) Journal
    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:poetic justice (Score:5, Interesting)

    by clem.dickey (102292) on Thursday March 06, 2008 @01:12AM (#22659878)

    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.

  • by YaroMan86 (1180585) on Thursday March 06, 2008 @01:17AM (#22659908) Journal
    Sure is. I couldn't imagine a more ideal time:

    1. Take control of a second-rate UNIX distributor 2. Squander all the products that were being made to the point there is no actual product development taking place. 3. Hire your lawyer brother and go after giant technology companies *and* customer companies simultaneously for copyrights you *know* you don't have. 4. Tie up the court system for more than five years. 5. Go bankrupt. 6. Get bought out. 7. ??? 8. Profit!!!

    Step seven might multiply into numerous more steps for Darl. Only an idiot would stick around after nearly killing a company and letting it get bailed out of a shithole he dug it into. Joking aside, for me, I only see up as a direction for SCO with a moron like Darl out of the picture. With the UNIX copyright clearly not in their hands, I don't see any way they can make much more out of the FUD they've been doing. So yeah, Darl has made an ass of himself in the industry, but I doubt he's anywhere near penniless because of it.
  • Re:poetic justice (Score:5, Interesting)

    by dbIII (701233) on Thursday March 06, 2008 @01:19AM (#22659918)
    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.
  • Won't stick (Score:5, Interesting)

    by Frantactical Fruke (226841) <renekitaNO@SPAMdlc.fi> on Thursday March 06, 2008 @01:42AM (#22660048) Homepage
    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?
  • by Anonymous Coward on Thursday March 06, 2008 @01:53AM (#22660108)
    I wonder if there's any way to find out who else this firm has invested in? I'd like to contact those companies and explain that I'm boycotting them and their products out of spite.
  • Re:Put SCO down (Score:5, Interesting)

    by greg1104 (461138) <gsmith@gregsmith.com> on Thursday March 06, 2008 @02:12AM (#22660198) Homepage
    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.
  • by SanityInAnarchy (655584) <ninja@slaphack.com> on Thursday March 06, 2008 @03:42AM (#22660618) Journal

    In my opinion, SCO is no longer a software company, but a litigation company.

    They have been for years. Did you just now notice this? Or are you stating this for the benefit of the few people who don't know? (Obviously, that would include some fairly wealthy people... or people with ulterior motives.)

  • Re:What the hell? (Score:4, Interesting)

    by CmdrGravy (645153) on Thursday March 06, 2008 @04:26AM (#22660754) Homepage
    This seems like the most sensible way of funding them to me, I'm not an expert on these matters at all but it seems to me that by loaning SCO the money as and when they request it they have ensured that when SCO loses ( first of all to Novell ) in court and has to pay massive damages the only money Novell will be able to claim is that 1st 5 Million because SCO would not then request any more loan money.

  • by TropicalCoder (898500) on Thursday March 06, 2008 @06:56AM (#22661338) Homepage Journal

    The current top article, for example, is about the ISO BRM on OOXML.

    I am really amazed that Slashdot hasn't picked up this story yet. I mean, I just can't believe it! This is the story of the week. This is a huge thing, as those who have been following it are well aware. The process at the BRM was so flawed as to bring into serious question the integrity of the ISO/IEC JTC-1. I won't add to the tens of thousands of lines of text that have been written about it here, in fear of being ruled off-topic. I only want to question why this hasn't been aired on Slashdot.

    Beginning on Friday, I was scanning the news anxiously to see how the BRM went, and shortly the first reports began to emerge. By Monday, the first report from an actual BRM participant [robweir.com] came out. By Tuesday, the available information was growing exponentially. I was following all this on Groklaw, and kept flipping back and forth from Groklaw to Slashdot to see if they had picked it up yet. When a second blog by Andy Updegrove [consortiuminfo.org] became a resource of links to every report by BRM participants, I could wait no longer. I wanted to see how this story was viewed by my fellow Slashdotters, naturally. I was so concerned that this still hadn't reached Slashdot that I reluctantly submitted the story myself. Then I started backtracking on the Firehose and discovered that there had already been 6 submissions at that point, and that was on Monday. I'll bet there have been dozens by now, besides thousands of people people clicking on those "Submit to Slashdot buttons all over the place". I just can't imagine why the editors haven't put this important story in front of Slashdot readers yet.

    Please forgive me for interrupting the current story. I just had to get this off my chest.

  • Re:Put SCO down (Score:4, Interesting)

    by KokorHekkus (986906) on Thursday March 06, 2008 @07:39AM (#22661496)
    Guess I'll answer this question again: it can't be done. The value of the common stock has nothing to do with how much it will cost to take over the company since they have had a so called "poison pill"-plan in place for years exactly for that reason. It's all in the hands of the board of directors. If you take a look at their 10-K you'll see the following under "Risk Factors"):

    We have adopted a stockholder rights plan. The power given to the Board of Directors by the stockholder rights plan may make it more difficult for a change of control of our company to occur or for our company to be acquired if the acquisition is opposed by our Board of Directors.
    And the following from the 10-K clearly illustrates exactly how little control the common stock owners have over the company:

    Our Board of Directors currently has the right, with respect to the 5,000,000 shares of our preferred stock, to authorize the issuance of one or more additional series of our preferred stock with such voting, dividend and other rights as our directors determine. The Board of Directors can designate new series of preferred stock without the approval of the holders of our common stock. The rights of holders of our common stock may be adversely affected by the rights of any holders of additional shares of preferred stock that may be issued in the future, including without limitation, further dilution of the equity ownership percentage of our holders of common stock and their voting power if we issue preferred stock with voting rights. Additionally, the issuance of preferred stock could make it more difficult for a third party to acquire a majority of our outstanding voting stock.
    Bold is my added emphasis.
    So as soon as anyone acquires anywhere close to enough stock to make a voting difference the board of directors will just issue more voting stock which they will control. Source:http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?dcn=0000891020-07-000020&Type=HTML [edgar-online.com]
  • Re:Put SCO down (Score:3, Interesting)

    by lysse (516445) on Thursday March 06, 2008 @08:08AM (#22661572)
    In fact, as I understand it it's not so much "SCO owes Novell $37m", more "SCO is holding Novell's $37m hostage".
  • Re:The Wizard of Oz (Score:4, Interesting)

    by A nonymous Coward (7548) * on Thursday March 06, 2008 @08:46AM (#22661766)
    My theory is that there is only one reason for this bailout, and that is to keep SCO assets from falling into the hands of Novell or IBM. What assets, you ask? Interesting memos and email archives, say I, such as links back to the mystery investor. I can think of no other reason to pump any more money into SCO. They will take it private, pass out golden parachutes, and evaporate like toilet water in hell.
  • Re:What the hell? (Score:3, Interesting)

    by Dogtanian (588974) on Thursday March 06, 2008 @08:54AM (#22661814) Homepage
    Now that SCO actually have $100 million, doesn't this mean that Novell (or whoever) can actually claim the money they're owed but had until now been unlikely to see due to SCO's impending bankruptcy?
  • Re:What the hell? (Score:3, Interesting)

    by cHiphead (17854) on Thursday March 06, 2008 @09:17AM (#22661970)
    Check out the research done on groklaw, the additional 95 million dollar loan might not even really be available. HA.
  • by tomhudson (43916) <barbara.hudsonNO@SPAMbarbara-hudson.com> on Thursday March 06, 2008 @09:29AM (#22662058) Journal

    They're still trading in the pink slips. Tht's why they issued some shares with a strike price of 8 cents when they were around a nickel, then went on this latest crusade to pump the price back up. Nice way to double your money without spending a penny.

  • by Anonymous Coward on Thursday March 06, 2008 @09:39AM (#22662132)
    Groklaw hasn't reported that the sale has been approved by the Trustee. Therefore, as far as I know, this isn't a done deal.
  • by yuna49 (905461) on Thursday March 06, 2008 @10:03AM (#22662360)
    This is probably a question only a bankruptcy attorney can answer, but where would SNCP stand in the ranking of SCO's creditors? Would loan repayments to SNCP take precedence over payments to Novell and IBM?

    BTW, is there anybody here who believes that crap about SCO and mobile markets? They have about the same ability to compete in the global mobile marketplace as I do.
  • by EmbeddedJanitor (597831) on Thursday March 06, 2008 @02:35PM (#22665822)
    Kevin McBride, Darl's brother, is one of SCO's lawyer. Lots of legal work means more money gets shunted out of SCO into the McBride family.

    If they've got their mitts on some more money then more legal work is a good way to pump some of that cash into a safe place. No point in them leaving cash in a sinking ship.

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