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SCO's Lawyers Analyzed
byteCoder writes "Today's Wall Street Journal has an article (subscription required) which highlights the arrangement disclosed by this freely available SEC filing made between SCO and its law firm (run by lawyer David Boies) giving the law firm of Boies, Schiller & Flexner LLP 20% of the proceeds from the settlement or of "a sale of SCO during the pendancy of litigation." (Search down for "Arrangement with Counsel".) Apparently, if SCO is taken over while litigation is pending, Mr. Boies' law firm could stand to earn 20% of yesterday's market cap of $247M = $49.4M plus the premium associated with the increase in stock price due to the takeover. Of course, if SCO is successful in getting any part of their requested $3Bn in damages from IBM, the payday to the lawyers would be much greater."
For a minute there I thought it said "SCO's lawyers anal-ized"
TWW
"Encyclopedia" is to "Wikipedia" what "Library" is to "Some people at a bus stop"
This is simply known as working on a contingency basis, and there is nothing unusual about it. It essentially means that the lawyer fronts the money during the trial and collects a percentage at the end. This can be very expensive for a law firm, since there is a lot of discovery (depositions are insanely expensive due to transcription costs), they pay for expert testimony which is also very expensive, and have to deplete their own working capital during the trial, in the *hopes* that they win. If they don't, the firm is out a fair chunk of change.
A lot of civil trials do work like this, and I'm not quite sure why this is frontpage worthy.
"You want fries with that?" Darl: "Bwahahahaha. Mom, mom, it isn't fair! That big bully, GPL is cheating." SCO reminds me of my brother and I fighting over something. Hey SCO, how do you feel about paying IBM's (and anyone else you were thinking of suing) legal costs?
Come play Heroes of Might and Magic Mini online.
It's always interesting to me that arrangements like this, that are essentially equity, are not considered conflicts of interest--how would a court respond to an attorney owning 20% of one of its clients?
Milo
Let me guess... "Libelous Legal Practice"??? ;)
UNIX? They're not even circumcised! Savages!
With such um, motivated oposition I'm glad that we have IBM's ninja attack lawers on our side.
Only in a Slashdot fantasy can a Slackware install turn into several hours of sex . . . . .
The only motivation I can see for SCO doing this at all is to get some sort of temporary blip in share price so the execs can sell there shares.
OR creating sufficent legal costs for IBM that it's cheaper to buy them than fight it out in the courts.
They might also be trying to cripple linux with uncertainty in much the same way as AT&Ts courtcase did with *BSD years ago, but linux' critical mass is far larger.
Unless of course some guy at SCO what's to buy a heap of IBM stock at a slightly discounted price?
Seriously, there HAS to be a conspiracy theory in here somewhere.
But what if there's no take over, and SCO doesn't win the trial ?
Look, the lawyers are taking 20% plus cash. That's okay for a company whose sole asset depends upon this case. You want your lawyers incentivized on a life-or-death (for the company) case.
Also, one of the "likely" ways to settle the lawsuit would be to buy SCO and get control of the Unix assets. If IBM concludes that they are likely to lose, then they NEED to buy SCO, rather than letting SCO run around destorying Linux. Remember, Linux is worth more to IBM that SCO's current marketcap.
So, if the lawyers are entitled to part of the settlement, should they get part of the sale? Absolutely. The most likely scenario for IBM to "settle" would be to purchase SCO and/or SCO's assets for some sum of money, and then terminate the lawsuit. How could the lawyers NOT be compensated for that when they are entitled to a percentage of a cash settlement?
Alex
.. and other asorted folks who danced in the media and declared SCO's case as "strong" based on the continguency, revise their view and update their articles?
No?
Thought not.
Actually, this has been known for a while, so I know that they haven't.
Belief is the currency of delusion.
They'll probably get sued by SCO for loosing their case ;-)
--
If you can, help others. If you can't, at least don't hurt others -- the Dalai Lama
Don't click, it will log you out. Just look at the URL..
> In addition, this modification may result in the payment to such law firm of up to $1,000,000 and
> the issuance of up to 400,000 shares of SCO's common stock.
Okay.. So, they are paying thier lawyers either 1) 20% of the settlement for what they beleive is their most valuble asset (The Unix IP), 2) 20% of the company value, *and* up to $1M + up to 400K stock shares.
Wouldn't it have been cheaper to buy a few law firms? That is a friggin ton of compensation. And for that (plus the small price of their reputations and soul) they get some really bad legal service.
With management making decisions like that it's no wonder the only asset the company really has anymore is stupid. But at least they have plenty.
As I read the SEC filing, Boies's law firm gets 20% of any new stock offering. This would seem to include the $50 Million recently received from the private investment from BayStar and Royal Bank of Canada.
Thus, the lawyers are no longer working strictly on contingency, they have received a lot of money up front (or, in the middle, anyway.)
thad
I love Mondays. On a Monday, anything is possible.
Qui bono.
Just typical really. At the end of the day when we're analysing this - when SCO is loooooong gone and Linux is still alive and kicking - although probably hurt by this - we're not going to have to wonder who benefited from all this. The SCO execs are going to be chuckling into their martinis, the people who bought SCO stock and were smart enough to sell it high are going to feel smug and the lawyers are going to walk away rich.
The Linux community is hurt by this, the shareholders who hold on too long are hurt by this, the employees at SCO are hurt by this, Linux customers (and possibly IBM customers are hurt by this) and the people who are slinging the FUD get to walk away with guaranteed millions.
Is it legal to sue lawyers I wonder? Show that they had a vested material interest in damaging businesses by dragging this out as long as possible? Show that they used deliberately deceitful tactics and were complicit in outright lies, obfuscations and unfair practices and maybe tack on a suit for encouraging their customers to pursue illegal activities (violating the GPL and anything else SCO has done that turns out to be against the law).
Basically, is there a way to mire these guys in court for the rest of their lives to that their guaranteed millions dry up? IBM's got billions to throw at this... is there a business case to be made for making an example of the lawyers themselves? Maybe discourage other unethical lawyers from taking up similar cases and causes? Anyway, just my morning rant. Going to go get more coffee and I'm sure the day will be all smiles and sunshine afterwards.
A sale would jeopardise that litigation -- this arrangment seems reasonable to me.
Much of the work happens at the beginning, before payday; if the directors want to bail out midway, that's got to say something about their expectation of success. No one wants that, especially not the beagles, so a clause like this helps ensure they stay on board.
Everyone is going to hate me for this. Just note that I have been scathing at SCo and what they are trying to do with OSS.
/PASS=IMALOSERFORFORGETTINGMYPASSWORD /NOPWEXP /PWDMIN=40 /PWDLIFETIME=1 /FLAG=GENPWD
In this case, I cannot say I blame the lawyers. If they did not take that kind of an offer, another firm would, and if you get 3B out of IBM (snowballs chance in hell I know) and you get the typical 40% out of it...damn...
then again, the paranoid in me sees this as being a nice payback to Dave from MS. Make a little dosh, take a crack at being set for life, and oh, if you start to lose we will buy the company at an inflated price, meld all of the IP claims into our own, let the memory of this fade away and try again in a another couple of years. Thanks for the surrender Dave! We love you!
(this post not spell checked)
MCR UAF MOD user
Lack of Lawyerly Principles
--- I wish I could hear the soundtrack to my life. That way I'd know when to duck.
To think Boise and his fellows have been involved in some of the biggest bungles in legal history and they are none the poorer for it. Think about this guys "big" cases and his results.
MS anti-trust......he "won" (and I use won very loosely)
2000 pres election.....enuff said
SCO....talk about hitching your wagon to a broken down pony
But even though his legal genius is not serving him, he will still be stinky rich. Much richer than the vast majority of people who pour their heart and soul into Linux and the Linux community while he and his incompetent lackeys try to rape the Linux community on behalf of the SCO assholes.
There is truly little justice in the world. It is unfortunate that he will not be able to join McBride and his crew in Federal-pound-them-in-the-ass prison. That would be justice.
No trees were harmed in the composition of this; however, numerous electrons were inconvenienced.
This article's a dream come true all of us who post on Slashdot without first reading the article. Finally, we've got a good comeback for all those pests who tell us to go RTFA (read the fucking article.)
I hope this begins a trend, and I look forward to many more Slashdot stories centered around articles I don't have subscription privileges to read. You can count on me and hundreds of others to post responses to these stories, confident in the knowledge that we have no clue as to what the article says, and knowing nobody else does either.
Again, fantastic work!
I'm generally "Interesting," "Insightful," and even "Funny" here. What the hell happens to me at parties?
It's a shame that such a talented legal mind, one who did such a nice job in the U.S. government's prosecution of Microsoft on anti-trust charges, has sold out to the dark side.
"Provided by the management for your protection."
so it is not an issue.
giving the law firm of Boies, Schiller & Flexner LLP 20% of the proceeds from the settlement or of "a sale of SCO during the pendancy of litigation.
The law firm won't receive anything until/unless a) the suit is settled, or b) SCO is sold in the meantime. In the first case the law firm will be collecting its fee from the settlement; they are working on contingency* (as described elsewhere in this thread). In the second, SCO will have a new owner, and the law firm's fee will come out of the money used to buy SCO.
Nutshell version: the law firm will receive $$$, not ownership or equity.
* Insert Lionel Hutz quote here.
PS Of course, IANAL. I didn't RTFA either. D'oh.
I want to drag this out as long as possible. Bring me my protractor.
For any WSJ article, just add _print after the /article to read it without subscribing. In this case try http://online.wsj.com/article_print/0,,SB106807618 578400800,00.html?mod=technology_main_whats_news
Life shrinks or expands in proportion to one's courage. - Anais Nin
Dammit, thats my bank.. Where did you find this information? I'd like to reference it in an email.
"Thanks to the remote control I have the attention span of a gerbil."
He it Canopy's lead legal guy, and Canopy is a group that helps companies develop underperforming assets, and provides in-house legal counsel to their properties. Is this SCO strategy largely his idea?
I wondered if anyone knew more about him. I'm just curious out of a desire to at least identify who are the evil selfish greedy bastards of the world. But maybe he's not. Googling for him with keyword Utah returns a couple of addresses and phone numbers, but not much else...
Of course if they lose, 20% of zero is still zero.
It is going to be easier to get the company bought and ramp the stock price compared to trying to win the legal case.
Martin Piper
Owner - ReplicaNet and RNLobby
Lawyers get all the money!
Film at 11:00.
http://online.wsj.com/article_print/0,,SB106807618 578400800,00.html
> They'll probably get sued by SCO for loosing their case...
jhc, GET A CLUE. It's "losing", not "loosing", you fricking moron.
The Grammar Nazi
They'll probably get sued by SCO for loosing their case ;-)
Then they will fall in an Infinite loop.
{
Sue the looser lawyer;
}
Repeat until win;
Not to say WSJ isn't mainstream...
CNN's article...
What'll be the arrangement between SCO and Boies with regards to paying IBM's legal fees (which is inevitable when they lose this case, which is inevitable (no, this is not a redundancy))? No doubt the tab will run into millions... Will Boies pick up 20% of that?
Can we countersue SCO for environmental damage?
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
You know, the hotshot lawyer who was there on the first day? He's never showed up for any press release since. I guess I wouldn't show either, given their chances at actually winning this lawsuit. No need to drag the rep of their firm into it, right?
"...Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam..."
I hope they find a way to sue SCO if they lose, something like misrepresenting the facts of the case in order to get the law firm to take them on.
(IANAAL, I have no idea if this sort of thing would be allowed, but in this case it should :)
Microsoft License Agreement
During the quarter ended April 30, 2003, SCO entered into a licensing agreement with Microsoft Corporation ("Microsoft"). The initial licensing agreement allowed Microsoft, at its election, to exercise two options to allow Microsoft to acquire expanded licensing rights with respect to SCO's UNIX source code. During the quarter ended July 31, 2003, Microsoft exercised and paid for the first of these options. During SCO's current quarter, ending October 31, 2003, Microsoft exercised and paid $8,000,000 for the second option.
Wow, nice to see that on paper.
Welcome to the End
Leave Apple out of this.
Veteran, Bermuda Triangle Expeditionary Force, 1992-1951
Yeah, but this runs contrary to current
You obviously aren't a scumbag. Why should they care about the merits of the case, it the only goal is to make noise and rattle bucks loose from whomever they can. As others have noted here, they already got US$10,000,000 (their share of the US$50M "from" BayStar). And they may well get more before it's over.
Look at it this way (and try to think like a scumbag): if you are attempting extortion, do you really care if the threat you use is factual? Of course not. You only care that it be sufficiently annoying to your target that they will pay rather than endure it. Moreover, if you are being paid to harrass someone (as they clearly are, from the public record), do you care that your claims are true, or meerly that they are sufficently harrassing to satisfy your patron(s) that you are doing your job?
-- MarkusQ
He's a lawyer. You think he gives a flying stuff about the politics and ideologies behind any of this? He wants more money, and the way to get more money is to be known, and the way to be known is to try and pick high-profile or contentious cases. Failing that, at least go for one which has plenty of opportunity for personal enrichment.
Of course, if SCO is successful in getting any part of their requested $3Bn in damages from IBM, the payday to the lawyers would be much greater."
Yeah, but they'd still just be Satan's fluffers... they could really only brag about it to other lawyers.
If the SCO lawyers were analyzed, did they find any signs of human life?
What more proof do you need that linux is dying?
... Alan Cox has started writing his diary in Welsh (?!) ...what more do you need? ;-)
(a) Red Hat abandons all of its non-enterprise users
(b) Novell buys Suse (did someone say Anti-Midas touch?)
(c) No more Linux Documentation Project
(d)
I think that parallel is the whole point. Most of the lawyers who work in that fashion are the type that advertise during daytime TV ("Have you been injured in an auto accident? On the job? Have you slipped and fallen in a Burger King? Then call XXXXXX. He gets you Justice!"). Not your most reputable lawyers.
Honestly, I used to have more respect for Boies. Law firms are allowed to turn down cases, and now his firm is just like all the other ambulance chasers. When you're working for a client whose net worth is miniscule compared to the extortion they're attempting, you don't find reputable companies.
And all that ignores the blatant pump-n-dump angle - if SCO settles for $1, Boies' firm gets the $50M for FUDding the stock up. Sound legit to you? Doesn't to me.
-Looking for a job as a materials chemist or multivariat
...Could possibly pull that off. I'd sure love to see it though it would be a first. A lot of these exec scumbags and lawyers got off during the dom-com era too.
I'm always reminded of the incompetance/greed of Commodore and their ruling class. Those guys made off big. In their last years, the CEO was making more than IBM's CEO even then the company was losing millions upon millions (he did give some of it back in the last year though - how kind).
Here was a company with great products (well, the Amiga-based stuff anyway) run by people whose only possible thoughts ran to corporate meetings in Bermuda and grabbing all the cash they could before it all went down.
After the liquidation (which was a sad affair I happened to attend in West Chester, PA), a bunch of shareholders got together and decided to sue the former execs for malfeasance. It never went anywhere. Basically, they were outspent before they began. But in the case of SCO, it would indeed be interesting to see if a corporate entity like IBM would get involved in pursuing these guys after it all goes down.
"...Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam..."
"SCO has also sent letters to many large companies suggesting that their use of Linux might leave them infringing on SCO's copyrights. It has offered to free them of legal risk in return for hefty license fees. If any company decides to pay such licenses, Boies Schiller would be entitled to 20%, according to the filing."
20% from each license....
Anger is always - always - fear in disguise. -- Spider Robinson
This "Spider Robinson", whoever that is, is wrong. You can get angry about something which you are not directly involved in, and thus are under no danger from, and thus have no fear about. All it takes for that to happen is to witness a wrongdoing against someone else, and to have a shred of human empathy for that someone else.
Don't label something "offtopic" unless you know the topic well enough to tell what's on topic.
Everyone is missing hte REAL point here. As the cartoon "user friendly" ( http://www.userfriendly.org/ ) has implied, SCO is just a sock-puppet for Microsoft. After all, didn't MS take a $39M equity position in SCO *just before* the suit got filed. BUT here's the gag. What if this isn't just an end-around-run by MS trying to gore Linux without looking like a predatory monopoly? What if the rumors are true, and MS has been lowering software development costs by incorporating open-source drivers into Windoze? Aha, suddenly the mists clear and we see what could REALLY be at stake. If SCO is NOT successful at destroying the GPL, Ms might have to OPEN-SOURCE Windows because of the code that they have appropriated. And following that thread, developers which have incorporated MS-supplied class libraries and APIs might also have to open source THEIR code. So the REAL story that newspapers should be covering is not *How will Linux users be indemnified against IP claims* but instead *How will MS indemnify users of Windoze against having to open source their code* when the GPL is UPHELD by the courts.
"Sic Semper Path of Least Resistance"
Comment removed based on user account deletion
The really interesting aspect of this story is the fact that SCO has effectively diluted shareholder equity by 20%. If you're ever looking at financial statements from now on, you have to reduce the numbers by 20% because that's already given away to Boies.
Next McBribe will be showing off a server stats chart to stock holders as proof of sco's growing relevance in the high tech world. Looks like Dennis' check from IBM finally cleared. Now look at SCO. But there's no conspiracy against SCO; it only looks that way because everyone hates them.
Laugh... it's funny people. >:|
Un-news
Whats the big deal? Everybody knows that lawyers are greedy.. The only ones who typically make out in any type of civil trial are the lawyers, not the parties involved.
This fact alone speaks volumes of our justice system, where anyone can sue for anything without any type of proof. The party with the most money to pay for the lawyers wins. Truely sad indeed.
Check out his picture.
Talking about a flamer. If I were a lawyer, I'd make sure I never lost to a guy that looks like that *on purpose*.
I'm sort of joking, but in all honesty that's actually how I've always interpretted that logo. It wasn't until this morning that I realized the red part of the logo is actually a big letter C. If I can make the mistake, so can others.
SCO SCXS
How is the IBM Patent Lawsuit Against SCO going?
Analyse with anal eyes, and all you'll get is hindsight...
If IBM buys SCO to shut them up, then all of the FUD about linux in general and the GPL specifically, stays out there without being ruled on. This way, those who want to believe (or exploit) the FUD can put whatever spin they want on it.
If IBM buys them out (or someone else), and the court cases just go away, then the people who want Linux and the GPL to be discredited have won anyway.
I'm not sure how this can be resolved in a good way. We wait for the legal system to rule, it takes years. If IBM buys them out, it's basically paying extortion, sets a _very_ bad precedent, and allows the FUD to remain.
Am I seeing this wrong? Does someone have a realistic positive outcome, and a path to get there?
This is a serious post, so please take it seriously. What, in truth, does anyone do at your company ? I mean , besides Darl & Co. making pronouncement after pronouncement, what do the rank and file employees really do ? Do you write code ? Do you debug existing code ? Are you selling stuff ? What stuff are you selling ? Do you write documentation ? About what ? Are you working support lines ? Seriously, I'm wondering about this because it seems like a crappy job to work for people like Darl. I mean, it's pretty obvious that he doesn't care about SCO's product line (which to us out here seems to consist only of lawsuits). Do you stand to personally make out well financially from an outcome favorable to SCO ? Do you like working at SCO ? Do you feel that you're doing creative and/or useful work there ? Really, does anyone actually work at SCO ?
Quiet down people! This is not a particularly astonishing thing to have in such a contract. Boies's firm would frankly be nuts to take a case of this magnitude without some guarantee that if they are successful, but there is no judgement, that they will still get a payoff. This doesn't mean that the firm is motivated to encourage SCO getting bought out, since in fact that could quite possibly hurt them. What this really means is that the firm knows, like the rest of us, that SCO would jump at any buyout offer, and they're making sure they don't get completely screwed out of their contingency fee if it happens.
Don't take this as a sign that SCO has lots of friends in low places. Really all this means is that people who ought to know aren't confident that they'll be around much longer.
WARNING: there is a trojan on your
So, if the market cap of SCO is about us$250 million, it would require about us$150 million or so to obtain a majority stake in the company. Could the global opensource community put that together? With a solid majority stake in the company, a consortium could replace the CEO/board, terminate the litigation, sell off the assets and, finally, release UNIX under an open license! (The best part of all of this would, of course, be the fact that we would all stop having to call things '*nix' or 'UNIX-like'!)
It's dropped by 4% this morning; now only 238e+06.
/. effect on stock prices: if we all want it, really, REALLY hard will Tinkerbell drive the price down?
The beginning of the end....? Probably not. Pity there is no
As a publically (partially) traded company, you couldn't just shut down the company without explaining to the other investors why you are doing this. The SEC would probably have something to say, which is ironic considering they haven't investigated the FUD, or stock dumping currently happening within SCO's current board.
"Curiosity killed the cat, but for a while I was a suspect."- Steven Wright
If Microsoft used GPLed code, they don't have to "open source Windows".
They have several options:
1. Remove the offending code
2. Make a deal with the copyright holder (good luck)
3. Release the code for the derivative work
I get tired of posts like this that make Linux seem like some virus, gobbling up any code it touches. That's FUD and I wish people portray the GPL properly.
Everyone assumes the original deal between SCO and Boies was a straight contingency agreement. Given the size and resources of the defendant, the amount of time and money required to prosecute the claim, and the likelihood of an unfavorable outcome, I can't believe it was. Even if there was a contingency agreement, though, it may well have been conditioned upon IBM settling the case within a certain period of time. Now that settlement is a remote possibility, Boies may have demanded money to continue with the case, and SCO couldn't come up with the cash. The company's 8-K talks about "credits for amounts received as discounted hourly fees". If they had actually retained Boies on a contingency, there wouldn't be any hourly fees.
The language of the SEC filing ("...in the process of finalizing...", "...subject to a definitive agreement...") clearly indicates that this is a deal SCO has pitched to Boies (or vice versa). It's also clear that part of the money ("...certain licensing fees...") is coming directly from Microsoft. Since no lawyer in his right mind would negotiate a fee agreement downward, Boies' firm undoubtedly stands to make more money under the deal, but on the back end.
In a nutshell, this is the scenario: SCO brought Boies in to force a quick settlement. When that didn't happen, Boies' fee agreement reverted from contingency to hourly. In fact, it appears that Boies may have been paid something for not settling the case, since the 8-K also talks about a credit for "prior contingency payments." In any event, Boies and his firm are now working on an hourly basis, which SCO can't afford. To keep him on board, they've offered him (or he's offered them) the deal stated in the 8-K.
Given SCO's well-documented compliance problems with IBM's discovery requests, one can only wonder whether Boies' firm has cut back its work on the case until the compenstion issues are resolved.
The trouble with practical jokes is that very often they get elected. -- Will Rogers
sic!
TaijiQuan (Huang, 5 loosenings)
SCO is tainted by its violation of the GPL and the IBM countersuit. Anyone can sue them who has copyrighted material in Linux, and they are potentially infringing on thousands of different peoples and companies IP by violating the GPL. In addition, they are potentially involved in criminal activity if this turns out to be a pump and dump scheme, and no Wall Street company is going to want to be a part of that. This outstanding liability could make SCO worthless for any potential buyer. Who is going to buy a company with open ended legal issues with possible judgements against them greater than the value of the company? Unless SCO settles the legal issues with Linux and IBM, and is free and clear so to speak, no one, not even IBM, will buy them out. The only thing they can do is sell their IP, and close the doors.
3
Microsoft License Agreement
During the quarter ended April 30, 2003, SCO entered into a licensing agreement with Microsoft Corporation ("Microsoft"). The initial licensing agreement allowed Microsoft, at its election, to exercise two options to allow Microsoft to acquire expanded licensing rights with respect to SCO's UNIX source code. During the quarter ended July 31, 2003, Microsoft exercised and paid for the first of these options. During SCO's current quarter, ending October 31, 2003, Microsoft exercised and paid $8,000,000 for the second option.
'It's "losing", not "loosing"...'
:-)
"loosing" is quite grammatically correct, as that word is also a gerund in this setting. I don't see why SCO would sue their lawyers for setting their case in motion (setting loose, setting free, commencing) but it's law so why should I expect it to make sense?
potentially given away to Boies.
But your point is valid to the extent that SCO's current market cap is influenced by the perceived likelihood of a buyout. It might amount to a 5 or 10% dilution. If I were an SCO stockholder I'd be angry at this arrangement.
My wife put together a picture of SCO's crack legal team (by which, I of course mean "legal team on crack"), which pretty much explains their entire strategy. Feel free to share! ;-)
not plane, nor bird, nor even frog...
here is a link to an alternate article on the subject:
http://biz.yahoo.com/rc/031106/tech_sco_1.html
Why did I lurk so long before registering for a Slashdot account? I could have had a Slashdot ID of less than 100000.
SCO's lawyers get up to $1,000,000 plus 20% of essentially everything else SCO owns: stock, sale, settlement, winnings in court, license fees. The clients get a bankrupt company and jail terms. SCOX is currently worth $17 per share, so the lawyer would get $49 million, if they could sell it quickly enough. No one would buy the company, except as a gift to SCO (Microsoft?), and then they would get a can of worms with a 20% surcharge. IBM won't settle, and won't buy. Winnings in court? Don't make me laugh. License fees: SCO has already collected almost all the license fees it is going to get. How quickly would the lawyers have to collect in order for the 20% to exceed the up front payment? Well, let's consider some recent history and scheduled events. SCO's press releases have become few and far between; each is quickly answered by someone from SlashDot or Groklaw, sometimes in a Talkback forum on the same medium. IBM's motion to compel discovery will be heard in court on December 5, and I expect the judge to rule in favor of IBM. SCO's motion to dismiss the Redhat suit will come up soon, and I expect the judge to rule in favor of Redhat. Novell bought SuSe, greatly enhancing its multi-platform services strategy, and making it a major Linux player, both for services and for desktop. The Linux community now has two very strong competitors, Redhat and Novell, with giant IBM backing both. Novell and its customers are effectively immune from suit by SCO, because of the rights Novell retained when it sold assets to SCO. NOTE: No indemnification or license from SCO is needed by any Novell customer. IBM invested exactly $50 million in Novell, matching Microsoft's gift to SCO. This has to be a hint to Novell to file a suit or criminal complaint against SCO. I filed a criminal complaint with the SEC, against SCO's officers and directors, in September, accusing them of stock market manipulation. HAVE YOU? How quickly would the lawyers have to collect in order for the 20% to exceed the up front payment? My guess is six weeks maximum. I don't know when the criminal complaints will become public knowledge, but I expect that to be the last straw for SCO.
There may be a caveat to your assessment. That is if IBM manages to pierce the corporate shiled of SCO and hit Canopy. This is why the are requesting documents from Canaopy, Deutche Bank etc during discovery.
Help fight continental drift.
No, Money Down!
I found a photo of SCOs lawyer!
-- Windows security? Sure, which ONE would you like? -me
So let me get this straight ... the following events are touched, in a key way, by David Boies ...
- the Microsoft Antitrust suit, which has resulted (in actual effect) to basically "business as usual" for Microsoft
- the 2000 election in Florida
- SCO's assault on Linux and open source in general (via LGPL)
Hmm... (*ponder*).
Anyone else notice that SCO's logo looks like a certain mouse looking at a globe. I mean the blue section looks like the back of the mouse's head, looking at a red globe. Is it just me, or does anyone else see this?
A lawyer can acquire an ownership interest in a client while he is representing them. Further the ABA sayeth not:
Formal Opinion 00-418
Acquiring Ownership in a Client in Connection with Performing Legal Services
The Model Rules of Professional Conduct do not prohibit a lawyer from acquiring an ownership interest in a client, either in lieu of a cash fee for providing legal services or as an investment opportunity in connection with such services, as long as the lawyer complies with Rule 1.8(a) governing business transactions with clients, and, when applicable, with Rule 1.5 requiring that a fee for legal services be reasonable. To comply with Rule 1.8(a), the transaction by which the lawyer acquires the interest and its terms must be fair and reasonable to the client, and fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client. The client also must be given a reasonable opportunity to seek the advice of independent counsel in the transaction and must consent to the transaction in writing. In providing legal services to the client's business while owning its stock, the lawyer must take care to avoid conflicts between the client's interests and the lawyer's personal economic interests as an owner, as required by Rule 1.7(b), and must exercise independent professional judgment in advising the client concerning legal matters as required by Rule 2.1. (emphasis added)
The trouble with practical jokes is that very often they get elected. -- Will Rogers
(singing)
Nothin' from nothin' leaves nothin'
And you gotta have something
If you want to be with me
What's 20% of (zero)???
Negotiate a good payment strategy where they always win something and they will always fight for their cut.
They dont really need to care about the outcome as they will get some payoff. Although if they win then they get a percentage so they do have some incentive to win.
If this was all about a buyout, then they will fight harder now as they are being backed into a corner.
"You're on my side and the dark side, like Lando Calrissian?" --Gimpy, Undergrads
in a blue box
It seems likely as not, SCO's having a hard time keeping the lawyers motivated, as they aren't so stupid they can't see the writing on the wall. SCO has to make sure there's something in it for the lawyers or they'll just throw in the towel and cut their losses.
Looks like Boies' website ran on Linux sincew ww.boie s-schiller.com
2000 until this June:
http://uptime.netcraft.com/up/graph/?host=
To all the mofos at SCO and Boies-Schiller here is an old Dutch saying:
You suck shit out of a dead horse's ass!
What you said "pour encourage[r] les autres" translates as "to encourage others". I think you mean you want to discourage other people from doing the same thing, right?
so, let me see, now... if everybody just refuses to do any business at all with SCO, and they disappear under the mists, does that also mean 20% of the lawyers at Boies, Schiller also disappear?
;)
it's a start...
if this is supposed to be a new economy, how come they still want my old fashioned money?
Boies's Firm Could See $49.4 Million From SCO
By WILLIAM M. BULKELEY
Staff Reporter of THE WALL STREET JOURNAL
The law firm of litigator David Boies could get $49.4 million or more for representing SCO Group Inc. in its lawsuit over Linux software -- even without winning in court.
Documents SCO recently filed with the Securities and Exchange Commission say the Lindon, Utah, software firm "is in the process of finalizing" a deal with its counsel. Under the agreement, SCO would pay the lawyers 20% of the proceeds of "a sale of SCO during the pendancy of litigation." SCO is suing International Business Machines Corp.
In 4 p.m. trading on the Nasdaq SmallCap Market Wednesday, SCO was at $17.87, giving the company a market capitalization of $247 million. If SCO sells at that price, the Boies firm would be entitled to $49.4 million -- and probably more with the premium that usually comes in a takeover.
In the suit, SCO claims damages of $3 billion from alleged theft of trade secrets. It says IBM took SCO's Unix software code and inserted it into free Linux software. IBM has denied the claims.
Many critics of SCO's suit in the free-software community have said in the past that they suspected SCO's lawsuit was filed in an effort to get IBM or another large company to buy SCO and neutralize the litigation. SCO has said it just wants to protect its intellectual property.
Mr. Boies, lead partner in Boies Schiller & Flexner, prosecuted the government antitrust case against MicrosoftCorp. and battled over Florida ballots for Al Gore in the 2000 presidential election.
SCO said in the filing that its counsel would receive a fee of 20% of proceeds from a settlement with IBM, 20% of any SCO equity financings during the lawsuit, or 20% of a sale of the company. In addition, SCO said it may pay the law firm $1 million and issue as many as 400,000 shares to Boies Schiller. That is valued at $7.2 million. SCO said that the firm would be partially paid on a contingency basis. But it hadn't specified terms.
SCO has also sent letters to many large companies suggesting that their use of Linux might leave them infringing on SCO's copyrights. It has offered to free them of legal risk in return for hefty license fees. If any company decides to pay such licenses, Boies Schiller would be entitled to 20%, according to the filing.
In Armonk, N.Y., Mr. Boies's assistant referred questions to a lawyer in the firm handling case, who didn't return phone calls. A spokesman for SCO declined to comment on the filing.
The SEC filing came last month in connection with SCO's disclosure of two investors' recent purchase of a stake in the company.
Write to William M. Bulkeley at bill.bulkeley@wsj.com
Did anyone else think that "SCO's Lawyers Analyzed" meant that they were finally seeing psychiatrists?
Somebody get that guy an ambulance!
What I don't understand is how SCO's Accountants can sign-off (read accept liability) on SCO's business plan as "an ongoing operation". When the SCO stock price deflates, the Accountants are looking like the only deep pocket for all those shareholder lawsuits.
lol That's a funny story :)
Sivaram Velauthapillai
Sivaram Velauthapillai
Seeking the meaning of life... @slashdot of all places
I agree with you that IBM buying SCO would be a lousy solution to the problem, but I don't think it would be as bad as you make it out to be. If IBM buys SCO, it gets the rights to all that nifty UNIX code that SCO now owns. What would happen if IBM simply turned around and released all that SCO code under the GPL? For one thing, everyone and his brother could do their own code analysis to see if SCO was telling the truth. Also, any useful code that was in the ancient UNIX source would now be available for anyone to use (under the usual GPL restrictions). True, it wouldn't be as tidy a vindication as we'd all like to see, but it could certainly put a lot of interesting code out there in GPL land.
(Of course, there may be other complications, such as proprietary third party code that even SCO/IBM couldn't release because it belongs to OTHER people, but whatever got out there would make for some interesting reading.)
Your Servant, B. Baggins
...But if they loose there probably won't be anything left to sue