SCO's "Least Supported Idea Yet"

I Don't Believe in Imaginary Property writes "Unsurprisingly, all of SCO's creditors have objected to the plan to reimburse York for the failed 'emergency' deal. Novell's tiny seven page objection (PDF) is hilarious and very readable. They don't hold back at all, saying that 'all that happened is that the Debtors spent money needlessly on a proceeding that was, to all intents and purposes, stillborn had it not been for the stubbornness of the Debtors' management and the avarice of York,' and that it was 'another really bad deal they have chased in ceaseless pursuit of their dreams of a litigation bonanza.' They top it off by concluding with the line, 'for the reasons explained above, the Court should deny the Motion as the Debtors' worst and least supported idea yet in these cases.' One can only wonder how SCO will respond to this."

Re:kill -9

[timster]

I don't know, maybe it's nit-picking, but any kill signal (including -9) will have no effect on a zombie process, pretty much by definition. A "zombie" process is just an entry in the process table that can't be removed for some reason (usually because the parent process hasn't read its exit code). There isn't any actual process associated with it, so no signals have any effect.

150,000K

[esocid]

From TFM:

the Debtors nevertheless now seek an expense reimbursement for York of $150,000 (or $50,000, as an alternative) as a "business and moral matter."

So SCO is trying to pay off York because they want to entice them again at a later date? It also states that this is in violation of bankruptcy laws since it wasn't an approved as what they call a "breakup fee" meant to preserve the value of the estate to the other party or other potential buyers. No one actually signed any contract, and in this case they argue that the "contract" didn't even list any specifics as to what York would be purchasing.

What exactly the Debtors proposed to sell to York was not entirely clear - which was one of the fatal defects of the Sale Motion in the end - because the Sale Motion attached only a nonbinding term sheet rather than a definitive sale agreement.

I'm not sure what SCO is trying to do here, but it sure smells fishy.
As a side not the motion really is pretty readable and worth it.

Quick Summary

[UnknowingFool]

After Novell won partial summary judgement against SCO that SCO owed them money for the MS and Sun deals, SCO declared Chapter 13 Bankruptcy. Chapter 13 bankruptcy means that the debtor (SCO) needs time to reorganize and some temporary protection from creditors (Novell, etc) while they figure a way to get back to solvency. This was Sept. 2007 and, the bankruptcy stopped the Novell trial.

SCO then tried to broker an emergency sale of assets to York Management. Well, under bankruptcy, all deals must be approved by a bankruptcy court. Novell and other parties objected because SCO failed to disclose (like usual) exactly what assets were being sold and how it would help SCO recover and get out of Chapter 13. The court agreed and SCO withdrew the proposed sale motion in Nov. 2007 without really disclosing what were the terms of the sale. So now SCO wants to pay York $150,000 for their less than 2 months worth of work for a failed deal.

IANAL but Novell had a reason to object to the sale. Among the things that SCO alluded to selling (but never fully disclosed) were obligations and assets that it owed to Novell in their case. If the deal would have gone through, Novell might have to battle it out for years between York and SCO to determine which one owed them the money. SCO could point to York and vice versa. It appears the SCO tried to scam their way out of paying by using a shifty sale.

Re:Quick Summary

[UnknowingFool]

I was a bit mistaken. SCO filed for Chapter 11. Chapter 13 is for individuals. Chapter 11 is for business. Both have the same purpose: Time for reorganization and temporary protection from creditors.

The proposed buyer, SNCP, has no money

[Animats]

That's a very funny collection of filings. It doesn't stop with the comments about SCO, either. Remember, the proposed deal now is that Steven Norris Capital Partners (SNCP) proposes to buy SCO's assets for $5 million plus a "loan guarantee" of $95 million at somewhere around 20% interest to cover future claims by IBM, Novell, Red Hat, SuSE, etc. So who is SNCP? The filings tell us.

In filing 412, Novell says "The Disclosure Statement says that SNCP was founded by Steven Norris and & Co. Capital Partners for the purposes of this transaction". So SNCP is a shell corporation. "It has a brief statement about SNCC's partners, Steven Norris and Mark Robbins, and sweeps breezily through a short statement of some of their past activities, making some very general grand claims about their past successes."

In filing 408, IBM points out, "the Partnership (SNCP) does not seem to have any operational or investment history."

Filing 414 points out, "Also, SNACCPLP failed to pay its annual tax assessments, and it thereby allowed its status to lapse to "CEASED GOOD STANDING" back in June 2006 (see Ex. 7). Thus, it is unlikely that the Florida LLC, formed in July 2007 (see Ex. 7), was truly "formed by Stephen Norris & Co. Capital Partners, L.P. for the purposes of this transaction." (Incomplete Disclosure Statement at (V)(B), p. 18)."

This is not looking good.

Steven Norris himself had a great reputation in finance until this month. His big claim to fame was the Carlyle Group. They created Carlyle Capital, which just went spectacularly broke, [carlylecapitalcorp.com] losing about $21 billion. If the main asset of SNCC is the reputation of Steven Norris, it's worth far less than it was a month ago.

And the Novell trial is approaching

[Animats]

For those of you not following the SCO debacle, the SNCP deal was being pushed as a last desperate attempt to head off what's coming next month:

U.S. District Court - District of Utah Court Calendar
Honorable Dale A. Kimball
Room 220. Tuesday, 04/29/2008 08:30 am. SCO Grp v. Novell Inc 2:04-cv-00139-DAK-BCW Bench Trial

This is SCO's upcoming Really Bad Day. The issue of whether SCO owns the UNIX copyright has already been decided - they lost on that issue. The only issue for trial is how much money SCO owes Novell. Which may be more than SCO has left.

SCO went into bankruptcy late last year to stall that trial, the Friday before the trial was to start on Monday. That didn't work; the bankruptcy court un-stayed the Novell trial. SCO tried the York deal to transfer their assets to York. That didn't work. Now they're trying the SNCP deal, which looks very unlikely at this point.

Re:The proposed buyer, SNCP, has no money

[sconeu]

Parent was lifted verbatim from this post [groklaw.net].

Maybe Animats is the Anonymous, but give credit where credit is due.

Re:What's Left?

[MightyMartian]

The problem is that SCO, as it stands, doesn't have much of a product. It's got some customers (mainly Point-of-sales) who would continue to feed it relatively small amounts of cash in support, but other than that, its product line is past prime. Instead of trying to improve and innovate, to actually compete, they pretty much gave up and formulated a new plan to litigate themselves into some sort of pot of eternal gold.

What's there to come back to now? Have they even get any developers and engineers left? Even if they could manage to survive bankruptcy, how would they attract anyone?

Perhaps not a good idea

[edremy]

I got a kick out of reading that, then looked the judge up [wikipedia.org] on Wikipedia to see if he had any more gems.

He's not exactly who we want on the bench

1. Complaints about bullying lawyers
2. Many complaints about favoritism towards certain lawyers, especially his best friend. Has been removed from cases involving this lawyer
3. Suspension from the bench following sexual harrassment claims that apparently have been ongoing for years.
4. Ongoing DOJ investigation that may lead to his impeachment over the harrassment claims.

Acid toungue, funny as hell, complete jackass in RL.

Re:What's Left?

[rkhalloran]

With the ruling that Novell owns what copyrights are left in UNIX, all SCOX has left are some x86-based drivers and utilities for Unixware, that still need the SysV base to be useful. The only other useful item might be the customer lists for The Next Guy to use to promote their migrate-to-Linux consultancy...

They also "own" the liabilities of IBM & Novell's countersuits, and the Red Hat Lanham Act suit for interfering in its doing business by casting doubt on Linux' legitimacy. Potential amount of these, especially in the IBM case, dwarfs the budget of many developing countries.

SCOX DELENDA EST!!

Re:The proposed buyer, SNCP, has no money

[Animats]

give credit where credit is due.

Yes, I posted that on Groklaw too, in slightly different form.

Re:kill -9

[bheekling]

/me shakes head. Kids these days.

You need: `kill -9 -1`
`kill -9 1` won't work because killing init would cause kill to kill itself. And kill doesn't have suicidal tendencies
Unless of course you're using Mac OS X