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IT SCO Files Chapter 11
Tom Corelis (Blog) - September 16, 2007 3:30 PM
Print 24 comment(s) - last by Gul Westfale.. on Sep 17 at 10:32 PM
Guess what happens when you pick fights with giants?

The SCO Group Inc, greatly maligned due to an expensive and unsuccessful campaign of litigation against the Linux world, announced on Friday that they have filed for Chapter 11 bankruptcy protection. The announcement comes one month after a U.S. District court ruled that UNIX copyrights belonged to Novell, and not SCO.

In a letter sent out to SCO customers and partners, SCO president Darl McBride wrote, “This afternoon we took the extraordinary step of filing for Chapter 11 protection in U.S. Bankruptcy Court … this decision was not taken without extensive consultation with the board of directors, and many outside experts and legal counsel.”

SCO stated that it will continue “business as normal” and follow the lead of other companies that have emerged successfully from Chapter 11. Citing the cases of Delta Airlines, Texaco, Macy’s, and others, McBride wrote that SCO “intend[s] to do the same.”

A Chapter 11 bankruptcy protects a company’s assets while it undergoes internal restructuring. “[SCO] believes it is poised for rapid growth,” said McBride in a declaration (PDF) in the company’s initial petition.

The filing means that all of SCO’s other domestic lawsuits are put on hold, including a court session scheduled for Monday to determine how much of the licensing revenues it collected must go to Novell.

In its bankruptcy filings, SCO listed that it had liquid assets worth $14.8 million and $7.5 million of debt. Previously trading at over $3 on the NASDAQ in the past year, the company’s stock price closed at 38 cents a share last Friday.

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so one of the bad guys goes down
By Gul Westfale on 9/16/2007 10:12:23 PM , Rating: 5
let's buy cake and celebrate.

for those of you who don't know of SCO: the company started out trying to sell linux distros but was never able to achieve any kind of success next to heavyweights like red hat or SUSE (or even mandrake), so they renamed themselves into "the SCO group" and then sued other linux companies for patent infringement. they wre a bunch of sore losers and deserved to go down. good riddance.




By Ringold on 9/16/2007 11:02:57 PM , Rating: 4
The real winner? No, not Linux. No, not UNIX; not even Novell.

That would be the small army of lawyers employed by all sides.

If I didn't want to view myself as a leech I swear I'd go to law school.


RE: so one of the bad guys goes down
By RW on 9/17/2007 4:47:55 AM , Rating: 4
quote:
[SCO] believes it is poised for rapid growth
LOOOOOOOL


By colonelclaw on 9/17/2007 6:08:56 AM , Rating: 2
all together now...

HURRAH!

go screw yourself Darl!

what an asshole


RE: so one of the bad guys goes down
By notbobutah on 9/17/2007 11:54:47 AM , Rating: 4
For those of you who dont have a long memory or no exerience in the UNIX world before 2000, SCO was one of the earliest PC unix variants based on the original AT&T builds. They produced, distributed and supported UNIX and ZENIX before Torval ever went to the University of Helsinki.

I worked for the Santa Cruz Operation (SCO) back in the early 80's and the product was solid, successful and professional. Once SCO sold their interest in UNIX to Caldera (who combined it with Unixware - the original AT&T licensed core) the end of the road was obvious for the original SCO. Then add Linux to the mix and the whole UNIX world was thrown into a state of confusion.

The SCO that has been attacking the Linux world is not the same company, they have changed so many times and technically are the SCO Group which is not the same company but anybody in the tech world knows how this works. Investors looking at how to recover an unwise investment looked at their IP and decided to sue - foolish move.

Linux owes its heritage to the original UNIX, the open source community movement started with the concepts of Dennis Richie the original UNIX platforms in the early 70's.
Read: A Quarter Century of UNIX (Addison-Wesley UNIX and Open Systems Series) for a good history lesson.


By Oregonian2 on 9/17/2007 3:02:59 PM , Rating: 2
And as I recall, the original SCO was partially owned by Microsoft when Microsoft transferred their version of Unix (Zenix) to SCO (which was really ironic that Microsoft tried to sell Unix such a very very long time ago with people failing to buy it, when later they have been lambasted for not selling something as good as Unix -- which of course they had tried doing). Admittedly, unix in those days ran slug slow on PC's of the day. Hardware wasn't there yet for that level of OS (other than on spendy mini's and bigger).


By Gul Westfale on 9/17/2007 10:32:57 PM , Rating: 2
i though SCO was caldera before they changed their name?


Am I missing something here?
By C'DaleRider on 9/17/2007 4:12:38 AM , Rating: 4
quote:
In its bankruptcy filings, SCO listed that it had liquid assets worth $14.8 million and $7.5 million of debt.


From that portion of the article, that's doesn't quite fit the definition of bankruptcy....their assets are double their debt....so they are in quite fine financial shape, as of now anyway.

quote:
The filing means that all of SCO’s other domestic lawsuits are put on hold, including a court session scheduled for Monday to determine how much of the licensing revenues it collected must go to Novell.


To me, that portion of the article says it all as to why SCO is really filing for bankruptcy......

Call me a conspiracy nut, but it sure seems suspicious that a company with twice as much in assets vs. their debt is now suddenly bankrupt....just before a hearing to determine how much $$$ Novell is going to take from SCO.

I hope the bankruptcy judge is on the ball and toss the application out and forces SCO to face Novell in that hearing. Then SCO can file for bankruptcy after Novell takes all their remaining liquid assets.




RE: Am I missing something here?
By masher2 (blog) on 9/17/2007 10:20:48 AM , Rating: 4
> "From that portion of the article, that's doesn't quite fit the definition of bankruptcy."

The article above is slightly in error. SCO listed $14.8M in total assets, not liquid assets. And they filed Chapter 11 protection-- not Chapter 7. Chap11 is simply a reorganization, done to keep a business in operation, and to prevent liquidation of assets when you're unable to service your debt load.

So there's nothing unusual here. You can easily have assets 10X or even 100X your debt and still file for Chapter 11, if those assets aren't sufficiently liquid.


RE: Am I missing something here?
By borowki on 9/17/2007 1:07:23 PM , Rating: 2
And part of that reorganization is likely going to be selling off the IP in dispute to some holding company. Clearly, all this litigation is a major distraction, to company that still ostensibly sells software. Or the other way around: the pretending to be a software company is distracting their real line of business. In any event, separating patent-trolling and software-development should improve the efficiency of both.


linux world?
By geeg on 9/16/2007 10:03:07 PM , Rating: 2
I dont think anything was against the linux world. The SCO claims were against the UNIX world.




RE: linux world?
By porkpie on 9/16/2007 11:46:16 PM , Rating: 3
No, Linux was involved. Read here for details:

http://en.wikipedia.org/wiki/SCO_v._IBM


Other companies
By Azsen on 9/17/2007 12:58:36 AM , Rating: 3
Lets hope other companies fall like this too: Rambus, RIAA etc




RE: Other companies
By mirarissl on 9/17/2007 7:46:19 AM , Rating: 2
what about Media Defender and Sound Exchange.. all we can do is hope and wait!!!


Good news... not good enough!
By Schadenfroh on 9/16/2007 10:53:38 PM , Rating: 2
I will break out the cake when SCO enters the liquidation phase of their demise.




RE: Good news... not good enough!
By Dactyl on 9/17/2007 12:04:48 AM , Rating: 2
Cut me a big slice of SCOdenfreude, please. Mmmmm.


[SCO] believes it is poised for rapid growth
By RogueSpear on 9/16/2007 11:36:10 PM , Rating: 2
So they've been holding back on something great just long enough to file for chapter 11?




By viperpa on 9/17/2007 8:29:38 PM , Rating: 2
You mess with the big boys and you get burned. SCO knew they never had a case in the first place but went ahead with it anyways. The funny thing is, instead of waiting till the litigation ended, companies signed million dollar contracts with SCO for fear of getting sued.

Wonder if those same companies will ask for there money back?


It couldn't have happened to a better company
By Quiksel on 9/16/2007 11:42:58 PM , Rating: 2
I mean, Chapter 11 is bad. Not a death sentence, but it's BAD.

But is it BAD that SCO is hitting the 11th Chapter? Hell no. We all hope and pray to our little PC's that SCO will continue to spiral downward to dissolution. McBride is such a *great* exec, too... I wonder what he'll do after SCO... maybe send some apology letters to all the companies he's caused financial strain and burden, weakening the industry for his own selfish gain?

God, quicken the day of this news. Please little PC, tell God to smite SCO like a mofo.

signed,
~q




RE: It couldn't have happened to a better company
By Treckin on 9/17/07, Rating: -1
RE: It couldn't have happened to a better company
By Alpha4 on 9/17/07, Rating: 0
By Gul Westfale on 9/17/2007 9:32:05 AM , Rating: 2
yup.

signed,
the lord of all creation, intergalactic field marshal, and sandra bullocks secret boyfriend, Gul westfale.

and yes, i'm being sacrastic. i'm not really a field marshal.


LOL
By oldman42 on 9/17/2007 2:13:14 AM , Rating: 3
SCO stated that it will continue “business as normal”
...Same thing we do every night Pinky, try to take over the world!

“[SCO] believes it is poised for rapid growth”
Nowhere to go but up.

The filing means that all of SCO’s other domestic lawsuits are put on hold, including a court session scheduled for Monday to determine how much of the licensing revenues it collected must go to Novell.
I'll gladly pay you tuesday for a hamburger today.




By Creig on 9/17/2007 8:05:52 AM , Rating: 3
in finding a job in the IT world after the SCO shuts it doors for good. He's managed to piss off nearly every person in the computer industry whether they received one of his 1,500 SCO "linux love letters" or not.

Hey Darl, remember that phrase about not burning your bridges?




"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser









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