SCO Puts a Cap on its Legal Expenses

prostoalex writes "The SCO Group reached an agreement with the lawyers to limit the litigation expenses to $31 million until the IBM lawsuit is resolved. The company already paid $12 million to Boies Schiller & Flexner LLP, Kevin McBride and Berger Singerman, which provide legal services to the company."

Comments

Until Microsoft slides more money under the door

[justanyone]

Enough for now...
Until Microsoft slides more money under the door...

goodbye CS... hello law school

[xannik]

I need to get me a piece of that. :-)

Re:goodbye CS... hello law school

[elid]

But then there's this little issue of morals that you might need to deal with.... :-)

Re:goodbye CS... hello law school

[Anonymous Coward]

Lawyers have morals? Since when?

Re:goodbye CS... hello law school

[tomhudson]

Lawyers have morals? Since when?

Q. Why do they use lawyers for testing instead of lab rats. A. 1. PETA won't bomb your lab if you use lawyers
2. Lab assistants won't get attached to them
3. There are some things lab rats just won't do.

Now, having said all that, some lawyers are ok - just look at the ones working for IBM.

Mind you, you have to wonder just how far a lawyer can stretch things before he's a willing participant in misleading the court. They MUST know that some of the arguments they (SCO) have made are outright lies and legal fiction. . .

Re:goodbye CS... hello law school

[Anonymous Coward]

Most lawyers hold themselves to the highest of ethical standards. If they didn't, they'd get a swift kick in the groin by the bar.

That said, lawyers swear an oath (example from S.C.).

Re:goodbye CS... hello law school

[Anonymous Coward]

You think the lawyers working for IBM are somehow "better," "ok," or more "moral" than those working for SCO?

Puh-leeze, they are all in it for the money.

Re:goodbye CS... hello law school

[tomhudson]

You think the lawyers working for IBM are somehow "better," "ok," or more "moral" than those working for SCO?

Lets look at it:

"better"

Judging from the reports posted by eye-witnesses on groklaw, point awarded to IBM;

"ok"

Again, judging by the quality of their filings, I would have to award the point to IBM.

"moral"

If you consider that the claims SCO made were an attempt at extortion ("we're going to sue you -buy us out or else"), again, on the question of morals, point awarded to IBM.

That they expect to get paid doesn't make them less moral. I expect to get paid for my work. *Not* paying me would be immoral.

Re:goodbye CS... hello law school

[EvanED]

Unfortunately, one of the ethical standards is that lawyers must represent their clients to the best of their ability without stepping across legality lines (misleading the judge/jury/opposing council, breaking the law, etc).

Much of the time, this involves working technicalities in the law and other things that many people would consider immoral.

Like many people view defense lawyers as scum because they routinely put together defenses that work because the evidence was poisonous or another reason and not because their client is innocent, and thus get even murderers off scott-free. I don't view those types of things as necessarily bad, but a lot of people will put justice for that individual's acts above justice in the process.

Re:goodbye CS... hello law school

[Anonymous Coward]

You have to admit that even if it is unintentionally, Boies has changed the computing landscape over the past five years as much as Linus or Billy G has. He almost took out Microsoft, he botched P2P's chances with Napster (which ironically, will actually hurt the RIAA a lot more over the long run than it if he had won), and now he sucked the cash out of SCO while convincing anyone with a working brain cell that Linux is for real. Give that man a metal and unleash him on some spammers.

Re:goodbye CS... hello law school

[pgpckt]

For a long time

The American Bar Association's Model Rules of Professional Conduct

http://www.abanet.org/cpr/mrpc/mrpc_toc.html

Re:goodbye CS... hello law school

[metlin]

I consider good lawyers to be the equivalent of hackers --> they hack the legal code that this society was built to, to make their point.

Morals and ethics are relative, but hats off to anyone who can tackle the finer points of law to get things their way.

They're the real hackers of the society's fundamental principle - the law.

Re:goodbye CS... hello law school

[Bros]

Oldie but goldie:

Q: What are 100 lawyers chained together at the bottom of the sea?

A: A good start!

Re:goodbye CS... hello law school

[jimicus]

They MUST know that some of the arguments they (SCO) have made are outright lies and legal fiction. . .

If you squint hard enough in the right light, they can probably get away with what they're saying quite easily:

1. Our client told us to sue. And told us what they thought were the facts. We were acting in good faith.
   
2. No of course we didn't check on those facts. We are paid to put across the client's case, not to confirm whether or not there is a case to answer.
   
3. We didn't lie - we just repeated what we were told. It's hardly our fault we were fed a pack of lies.
   

Wait and see. If anyone gets into trouble over this, you can bet it won't be the lawyers. After all, a judge has to preside over a court case, and a judge is just a lawyer who's been promoted.

Re:goodbye CS... hello law school

[mpcooke3]

Do you think the lawyers working for IBM are better people than the onces working for SCO?

I suspect they just work for the highest bidder.

Re:goodbye CS... hello law school

[mpe]

Most lawyers hold themselves to the highest of ethical standards. If they didn't, they'd get a swift kick in the groin by the bar.

However these ethics are those decided by lawyers and their professional associations. These may or may not be the same ethics that a member of the public would accept.

Re:goodbye CS... hello law school

[Paleomacus]

I suspect they just work for the highest bidder.

That or they're working for a high paying bidder on a huge career/reputation/prestige building case so that they can easily get higher paying clients for likely simpler cases.

Re:goodbye CS... hello law school

[Goo.cc]

Money has a way of helping one deal with that.

Re:goodbye CS... hello law school

[Anonymous Coward]

But then there's this little issue of morals that you might need to deal with.... :-)

Given the amount of piracy against other geeks that most geeks participate in... lawyers have a higher level of ethics (called "professional courtesy").

Re:goodbye CS... hello law school

[stanmann]

IBM lawyers are IBM employees, on a salary(ok a big one), but IBM doesn't go out and hire lawyers every time they need something done, they have them on staff. So SCO is just making sure that the IBM lawyers earn their paychecks this year. Next year it will be someone else.

Re:goodbye CS... hello law school

[Shakrai]

Puh-leeze, they are all in it for the money.

And you are working for free right? Almost everybody in our country is "in it for the money". Everybody thinks lawyers are bad and evil until they are sued or charged with a crime they didn't commit.

Re:goodbye CS... hello law school

[Facekhan]

"Lawyers are like nuclear weapons. They've got theirs so I've got mine but, once you use them, they fuck up everything"--Danny Devito, Other Peoples Money

Re:goodbye CS... hello law school

[angle_slam]

Do you think the lawyers working for IBM are better people than the onces working for SCO?

He thinks that now. But when IBM tries to enforce one of the 3000 patents it gets each year, /. will be calling those lawyers evil.

Re:goodbye CS... hello law school

[thelaw]

Or they're trying to put the kids through super-duper-expensive college.

Jon

Re:goodbye CS... hello law school

[angle_slam]

IBM lawyers are IBM employees, on a salary(ok a big one), but IBM doesn't go out and hire lawyers every time they need something done, they have them on staff.

Actually, IBM is using two law firms on this case: Cravath, Swaine & Moore and Snell & Wilmer. While IBM does have a legal staff, most of its litigation is done by outside firms.

Re:goodbye CS... hello law school

[PMuse]

What happened to the guys who had a CS degree in 1996? They could have (a) moved to California and joined a start-up or (b) gone to law school for 3 years. Road (a) leads to being either rich or broke by 2000. Road (b) leads to being massive ly in debt in 1999, but more predicatble prospects afterwards.

Now, you're considering starting lawschool in fall 2005. California is still flooded with ex-startup people looking for the next rush. Where do you want to be in 2008?

(BTW, CS is actually excellent preparation for getting into law school -- you'll rock the entrance exams).

Re:goodbye CS... hello law school

[hackwrench]

IBM, or IBM's lawyers?

Re:goodbye CS... hello law school

[megarich]

exactly, in cases like these (and oj) the only true winners are the blood sucking lawyers.

Re:goodbye CS... hello law school

[tomhudson]

... deserves a follow-up:

Q. What do you have with 100 lawyers buried up to their necks in sand?
A. Not enough sand.

Another poster responded that the missing $6M might be for expert witnesses. More of those "MIT Dumpster Divers" that didn't exist?

Re:goodbye CS... hello law school

[sootman]

"Now, having said all that, some lawyers are ok - just look at the ones working for IBM."

Exactly. It's just another case of the bad 99% giving the other 1% a bad name. :-)

Re:goodbye CS... hello law school

[tomhudson]

They've had access to the same witnesses, the same documents, the same "lack of evidence".

Our client told us to sue. And told us what they thought were the facts. We were acting in good faith.

So you didn't do any work to prepare for the case? Didn't ask any questions to try to put together the evidence needed to make a case? Didn't review the facts of the case? Makes for very poor lawyering.

No of course we didn't check on those facts. We are paid to put across the client's case, not to confirm whether or not there is a case to answer.

What "facts" didn't you check? Oh, there were no facts to check... ergo no reason to take on the case. D'uh!

We didn't lie - we just repeated what we were told. It's hardly our fault we were fed a pack of lies.

Wilfull ignorance is never a defence.

They know their client has no evidence.

They know their client has continually made false representations to the media (finally gaggind Darl).

They know their client has no case.

But money talks...

Re:goodbye CS... hello law school

[tomhudson]

IBM, or IBM's lawyers?

Both.

When it comes to the quality of their lawyering, IBM and SCO remind me of that old adage -

First-class people surround themselves with first-class people.

Second-class people surround themselves with third-class people.

SCO and Boies deserve each other.

Re:goodbye CS... hello law school

[tomhudson]

exactly, in cases like these (and oj) the only true winners are the blood sucking lawyer

Actually, I think it's s/going to be/already is/g; a big win for the F/OSS movement as well.

It's already been a huge black eye for the following:

1. SCO
2. The McBrides
3. BayStar
4. Microsoft
5. Boies

Re:goodbye CS... hello law school

[meme_police]

That's for sure. But the only reason we need lawyers like the IBM ones is because of the overly litigious environment created by the other 99%.

Re:goodbye CS... hello law school

[jimicus]

So you didn't do any work to prepare for the case? Didn't ask any questions to try to put together the evidence needed to make a case? Didn't review the facts of the case? Makes for very poor lawyering.

And exactly what evidence do you have that SCO have hired good lawyers?!

Seriously, I never said these were particularly good arguments. Just that if you squint hard enough in the right light they may just be adequate arguments. IANAL.

Re:goodbye CS... hello law school

[mink]

I think, if you look closely, you will notice IBM publicaly stationg they have no intention in engaging in IP extortion like so many other companies inthe world.
At least under current managament I trust them on this statement.
Things may change, but we will have plenty of warning.

Re:goodbye CS... hello law school

[hicksw]

Lawyers and other professionals have 'professional ethics'.

These are to regular ethics as televsion wrestling is to beating up people Saturday nights -

A pale imitation for those who have never felt the real thing.

God Bless The Laywers

[NETHED]

You know, I think the Lawyers are on our side FOR ONCE. They are milking SCO dry. Anyway I could contact them so they would have to bill SCO? I know, lets SLASHDOT the Lawyer office, and make sure that they bill SCO.

Better be quiet, FBI might come knocking (*AGAIN*)

Re:God Bless The Laywers

[WindBourne]

Well, they are not really hurting SCO. That was money from elsewhere. But the lawsuit and McBrides antics have killed SCO.

But I wonder, are there groups here that might wish to do some lawsuits against SCO? That will drain this money faster, even though I think they only have to last until MS comes out with Longhorn

Re:God Bless The Laywers

[antifoidulus]

Which McBride? There seems to be one on the legal team too.....hmmmm not exactly a common name either...

Re:God Bless The Laywers

[kbranch]

That will drain this money faster, even though I think they only have to last until MS comes out with Longhorn

Only until Longhorn comes out?

I guess that's not quite as bad as saying they only have to last until Duke Nukem Forever comes out...

Re:God Bless The Laywers

[Donoho]

even though I think they only have to last until MS comes out with Longhorn

ROFLMAO Sweet, then they're as good as dead.

Re:God Bless The Laywers

[yog]

I know you're kidding but it's still a sad commentary on the way the legal profession has undermined the economy.

Those lawyers have done nothing for SCO and yet they have greatly enriched themselves from shareholders' money. Granted some of that money came from outfits with questionable morals themselves, like The Canopy Group, but that's also money that could have been invested in hiring software people to help improve their products and their competitive position in the market. SCO was once a reputable company, after all.

Here's a question for some legal expert. Since Boies et al were paid in stock a while back, they are now a major stockholder in SCO, 25% as I recall. I wonder if they can therefore be sued by any parties who have a grievance against SCO? Like practically the entire open source development community, IBM, Redhat, Novell, etc.

I have personal experience with the damage they have caused; I have dealt with people in the embedded market who were avoiding embedded Linux because of "the lawsuit". The very lawyers who represent this rogue company are its owners; they are purely and openly in it for the profit regardless of right and wrong.

Re:God Bless The Laywers

[WindBourne]

Kevin is a lawyer who is Daryl's little brother. But it is Daryl's words that are killing SCO. Kevin is simply a minion.

Re:God Bless The Laywers

[Anonymous Coward]

Since Boies et al were paid in stock a while back, they are now a major stockholder in SCO, 25% as I recall. I wonder if they can therefore be sued by any parties who have a grievance against SCO?

No, they can't, at least not as a result of being stockholders. One of the cornerstones of the corporation is that you are only liable to the point you invest into the company. A stockholder cannot be sued for the actions of the corporation, since the corporation is considered another "person" in the eyes of the law, and they are thus no more liable than you would be if your brother stole something.

Re:God Bless The Laywers

[antifoidulus]

It could just be that this is the easiest way for Darl to cipher what funds SCO had left to his brother then get out much richer than if he would have just let SCO die it's inevetible death.

Re:God Bless The Laywers

[Aneurysm9]

Generally true, yes. However, there is also a concept known as "piercing the corporate veil" which allows a stakeholder, usually a director or officer, but potentially a dominant shareholder, especially in closely held corporations, to be held liable for misdeeds of the company on the theory that the stakeholder and the company were indistinguishable in the eyes of the law.

Re:God Bless The Laywers

[Anonymous Coward]

While there is no doubt that kevin will make some good money, Kevin does not work for Bois. But it may be a scheme to keep more of it in the family. Utah is well known for "keep it in the family" approach esp. in Colorado City.

Re:God Bless The Laywers

[superpulpsicle]

How the hell do you turn all this legal negativity into a product or service to sell? Amazingly SCO lawyers did it! Go to http://www.sco.com, under product & services you see

"SCO vs. IBM"
"SCO vs. Autozone"
"SCO vs. Novell"

You know your lawyers are good when they have convinced the webmaster to advertise their lawsuits just like any other products.

Re:God Bless The Laywers

[rkent]

I know you're kidding but it's still a sad commentary on the way the legal profession has undermined the economy. Those lawyers have done nothing for SCO and yet they have greatly enriched themselves from shareholders' money.

And who do you blame for this? The first response to jump to mind should be "whatever jackass decided to pay the lawyers so much for such a hopeless lawsuit". An old saw in the legal profession is that the reason lawyers are such assholes, is that clients are such assholes (see my profile for more about my stake in the whole debate). A lawyer is the agent of his client's interests in the legal realm; simply that and nothing more.

Here's a question for some legal expert. Since Boies et al were paid in stock a while back, they are now a major stockholder in SCO, 25% as I recall. I wonder if they can therefore be sued by any parties who have a grievance against SCO?

No. As another poster said in this thread, the very point of setting up a corporation is to establish a firewall for legal liability. There are a couple of recourses, though:

1) If you think the lawsuit is truly malicious and has no plausible basis in fact, you could sue SCO et al for bringing a frivolous suit, but you would have to have standing (i.e., actually be injured yourself). You could accomplish that several ways, but being an IBM principal or employee, or someone else whose livelihood "depends" on Linux would be a good start.

2) If you are a shareholder of SCO, you could bring an action against the board of directors, personally as individuals and in their role as directors, and probably McBride and other "wayward" executives. The basis for this would be that the management of SCO is doing things that are actually against its shareholders' best interests (as confirmed by the miserable performance of SCO stock), and thus violating securities regulations.

See how it always comes back to the company, not the lawyers? It's because they can only be as mean as SCO tells them to be. Actually, I'm kind of surprised that someone hasn't tried #2 yet; I guess there's always the hypothetical possibility they'll prevail and make some money, but it seems much more likely that they're tilting at windmills and wasting money that would be much better spent on, oh, R&D or something.

Re:God Bless The Laywers

[nomadic]

I know you're kidding but it's still a sad commentary on the way the legal profession has undermined the economy.

Typical anti-lawyer propaganda. What evidence do you have that the economy has been "undermined"?

Re:God Bless The Laywers

[Anonymous Coward]

Your kinda creepy.

Re:God Bless The Laywers

[FFFish]

It's all part of the strategy.

It's obvious to everyone that the lawyers have done nothing for SCO. There's been claim after ludicrous claim, sure, but sweet zombie jesus, they are insane claims!

If the legal system actually, amazingly, stupidily buys-in to these insane claims, then SCO wins bigtime.

And if the legal system rejects those claims, saying in effect, "sweet zombie jesus, those claims are insane, guys!" then SCO turns around and sues its lawyers, claiming that SCO was an unfit client, obviously not of sound mental state, or it would have fired its lawyers for making such insane claims!

And so it's a risk-free gamble for SCO. If their insane lawyers succeed with insane claims, then SCO is in for the big clams. If not, they get their money back.

In the end, some lawyers may get hurt, but no one cares about that. :-)

Re:God Bless The Laywers

[Lord_Dweomer]

"2) If you are a shareholder of SCO, you could bring an action against the board of directors, personally as individuals and in their role as directors, and probably McBride and other "wayward" executives. The basis for this would be that the management of SCO is doing things that are actually against its shareholders' best interests (as confirmed by the miserable performance of SCO stock), and thus violating securities regulations."

So let me get this straight, all you would need to do to fit this category is buy a single share of SCO stock? Hmmm......lets see.....

One share of SCOX - $3.50
Price of litigation - $0.00 (contingency basis)
Going down in history as the geek who finally called SCO on their shit, and got its execs put behind bars? Priceless.

Re:God Bless The Laywers

[dasunt]

Those lawyers have done nothing for SCO and yet they have greatly enriched themselves from shareholders' money. Granted some of that money came from outfits with questionable morals themselves, like The Canopy Group, but that's also money that could have been invested in hiring software people to help improve their products and their competitive position in the market. SCO was once a reputable company, after all.

I'm guessing the lawyers are in the same position a coder or a webmaster is in when their client suggests something highly stupid, highly bass-ackwards.

You tell them the straight dope.

If they refuse to listen, you do it their way, and bill them.

Its a professional's responsibility to give their expert advice to a client. But if the client refuses to listen to that advice, then bill the client for doing it their way. Its the client's responsibility to listen to the advice and make the decision.

To use an analogy -- if you are a broker and your client wants to buy SCOX tomorrow, you might explain the potential problems with that purchase (mainly, IBM will crush them, resulting in plummeting stock prices). If your client still wants to buy SCOX, then you take your commission on the trade, and wait for the inevitable phone call from your client asking you how you could have let them do something like that (unless SCOX shoots back up, then the phone call will be about how much brighter they are than you).

Re:God Bless The Laywers

[Ohreally_factor]

Good reply. I couldn't have explained it better.

As far as #2 goes, Actually, I'm kind of surprised that someone hasn't tried #2 yet

the share price of SCOX is still higher than it was pre-litigation. So Darl has actually increased shareholder value since the days before litigation. Anyone who bought after the start of litigation was buying into "litigation as business model", and has no leg to stand on, regardless of whether they got in early and cheap or too late and when the stock was at it's peak.

What needs to happen, and probably won't (due to an underfunded SEC and a look-the-other-way Justice Dept.), is an investigation of stock manipulation by Canopy Group as well as an investigation of the Microsoft connection.

SCOG was already a soon-to-be dead company, before they took on IBM. If anything, Darl has managed to keep SCOG alive, and for a while, with an impressive stock price. I'm sure he has made Ralph Yarro very happy, and that's the only shareholder he need ever answer to.

Re:God Bless The Laywers

[Surazal]

Sure the lawyers may be competent to some degree. However, there's some issues with the abilities of the CEO, the software engineers, the managers, and the rest of the disillusioned employees of the poor company.

Good lawyers. Yup. That's about all there is to SCO.

*Ahem* maybe

Re:God Bless The Laywers

[Anonymous Coward]

So being paid absolves the lawyers of any responsibility? Bullshit.

Its the same as companies who think they are entitled to do anything at all if they can make money in it. Amoral assholes. The fact that we have an archaic legal system that can not cope with the vast majority high-tech and IP shenanigans does not absolve those companies of moral responsibility.

Re:God Bless The Laywers

[Ohreally_factor]

I highly doubt that you can find an attorney to take your case on contingency on the basis of one share for which you paid $3.50. I'm not sure what sort of damages you're expecting to collect, but if the stock dropped to $0.00, you'd at best be able to collect $3.50.

That's even if you actually had a legitimate case. See this post as to why I think you wouldn't.

Re:God Bless The Laywers

[doodlelogic]

Why not? They could package up the lwasuits into a separate company and flog them off. Why they haven't done this? Maybe there isn't a market for them...

Re:God Bless The Laywers

[tod_miller]

I agree, this is what is happening, i wish larger new sources would make connections like this, but, oh wait, they would probbaly be sued because of the stupid US laws.

Hang on, didn't SCO say something about limiting legals costs? :-)

Re:God Bless The Laywers

[MosesJones]

I used SCO in about 1993... it sucked as a product, total and utter rubbish. It was worse that the NT Beta we had.

It will take alot for me to believe that, apart from Tarentella, SCO were a decent software company.

Re:God Bless The Laywers

[Eggplant62]

You obviously have read little of SCO's legal filings. From what I've read of the documents put forth by SCO's legal team, my 14-y/o son could have done a better job.

Poor grammar, typographical errors, baseless conclusions made in error, and outright lies seem to be the hallmark of a Boies et al legal filing.

Re:God Bless The Laywers

[Zak3056]

the share price of SCOX is still higher than it was pre-litigation. So Darl has actually increased shareholder value since the days before litigation.

Are you sure about that? There's more to the value of a company than its share price--like the number of shares outstanding, for example. What happens when you factor in the dilution from Baystar and RBC? I'm guessing that SCO is likely worth less now than it was.

Re:God Bless The Laywers

[Uzziel]

SCO was once a reputable company, yes. It still is - it's called Tarantella.

The current SCO Group came into being when they purchased a bunch of "intellectual property" from the old SCO. That's not exactly the foundation of a reputable company. They didn't put any sweat into UNIX, just marketing. When that didn't make them enough money, they decided to start an extortion campaign.

Re:God Bless The Laywers

[GeorgeAWithersJr]

Amazing! I had to visit sco.com to not believe this was not a little hyperbole but there it was -- we make UNIX, do professional services, and sue people.

Technically they should be sued by RedHat though since "RedHat vs. SCO" was listed a "Product" or "Service" as well and it seems that could violate copyright since as the instigator you'd think this particular suit was a "RedHat Product".

Just when you think you think nothing of SCO, they find a way to make you dig-deep and feel less ..

Re:God Bless The Laywers

[PMuse]

You know, I think the Lawyers are on our side FOR ONCE. They are milking SCO dry. Anyway I could contact them so they would have to bill SCO?

That's silly. The lawyers are on their own side. Kind of like the Ents, actually . . . well, then again, no -- not really.

Re:God Bless The Laywers

[Technician]

Don't blame the lawyers..

Those lawyers have done nothing for SCO and yet they have greatly enriched themselves from shareholders' money.

If the board decided to blow the money on Vegas showgirls or a cruise to the Bahamas, the expense was the board's fault. Nobody unleashed a horde of hungry lawyers on SCO that took the money. Just like a cruise or Vegas showgirls, the lawyers set their rates and provided a service. They do not promise a favorable outcome.

The blame belongs strictly on the board of directors that squandered SCO's funds on expensive lawyers. SCO just underestimated the fight given by those under attack. The tip of the dragon's tail doesn't look that bad, but attacking it will wake up the dragon. It's bad judgement by the board and nothing else. They made the mistake of staying in the game when the dragon woke up.

Re:God Bless The Laywers

[megarich]

sco still makes products?

Re:God Bless The Laywers

[rkent]

So let me get this straight, all you would need to do to fit this category is buy a single share of SCO stock? Hmmm......lets see.....

Technically yes, but the action you would seek would be called a "shareholder derivative" suit (google for more info), which is kind of a class action, and you'd be representing the interests of all shareholders (assuming your complaint is valid, and the actions of management really are hurting the stock value). So the concern about only recovering $3.50 or whatever, brought up by another poster in this thread, is probably not such a big deal. I don't know exactly how the calculus goes, but I think the damages would be the total amount knocked off the stock price for ALL shareholders, and the firm would take a cut of that. Consult your lawyer though.

It is true that derivative actions are usually pursued by the biggest shareholders, and I can imagine a judge tossing out your suit on the basis that you're not a "genuine" investor, but only bought a share in order to have standing to sue.

A recent example of a shareholder derivative action, by the way, was when a major investor sued Sinclair Broadcasting for planning to run that anti-Kerry documentary, on the premise that it cost them a lot of advertising. The next day Sinclair responded that they weren't showing the documentary, but only a "news feature" based on it, so draw your own conclusion about whether the suit worked.

Re:God Bless The Laywers

[rkent]

the share price of SCOX [fool.com] is still higher than it was pre-litigation. So Darl has actually increased shareholder value since the days before litigation.

Yikes! Well, countersuit for frivolous litigation, then. I wonder why IBM et al haven't tried that yet?

Re:God Bless The Laywers

[16K Ram Pack]

Never blame the lawyers is my rule. It's like blaming the soldiers in Iraq for starting the war there.

As for companies who are avoiding Linux... more fool them. Plenty of other people are doing business as usual. Those other companies will be the ones who get to market first and reap the rewards.

Re:God Bless The Laywers

[jumpingfred]

You would have had to own the stock before they made their extremely public lawsuits. If you bought the stock now, knowing the sco business plan I don't think you would find your law suit gets anywhere.

Re:God Bless The Laywers

[druxton]

"shareholder derivative" suit (google for more info), which is kind of a class action

Shareholders already had a class action against Nortel and some of its current and former executives, and this morning I heard on CBC radio that one is now being brought against members of the board (it doesn't seem to have made the web site yet).

Re:God Bless The Laywers

[Wybaar]

I'd imagine (though IANAL) that until or unless the suit SCO filed against IBM has been thrown out with some comment to the effect that the judge thought this was a frivolous lawsuit, they wouldn't be able to proceed very far. I think they'd have a MUCH better chance at winning such a countersuit after the judge in the original suit gives his decision -- the judge's opinion should have a very high weight with the judge who would be ruling on the countersuit.

Now when/if SCO loses, of course, IBM will come back and hit them like a freight train. It's a little too early for that right now, though.

Re:God Bless The Laywers

[Alsee]

and a look-the-other-way Justice Dept... an investigation of the Microsoft connection.

I know it's old news, but let's not forget to thank our beloved President. Our the changes at the Justice department, and the rollover after the Microsoft conviction, were all God's will because God speaks through Bush.

-

Re:God Bless The Laywers

[wnissen]

Everyone who owned a share before now has a share that is worth more. Have the original shares been diluted? Yes. But more shares times the same or slightly increased value means a bigger market capitalization. In no sense is SCO worth less.

Walt

Re:God Bless The Laywers

[Jumper99]

I have personal experience with the damage they have caused; I have dealt with people in the embedded market who were avoiding embedded Linux because of "the lawsuit".

So I have a case against GM because I was thinking about buying one of their cars, but with the recalls, I just don't know...

I know there are a lot of Linux zealots here, but isn't this taking a bit far?

So where's the rest going?

[tomhudson]

From the article:

SCO Group said it paid its attorneys roughly $12.6 million under the agreement for outstanding legal fees and expenses. For future legal fees, the company is to pay a total of $12 million plus contingency fees, it said.

Okay, that gives a total of $24.6 million. Which leaves $6.4 million unaccounted for. Or is this what McBride is going to have SCO pay Kevin?

Re:So where's the rest going?

[chesapeake]

$6.4 million probably isn't all that much in the scale of things. You can't sue IBM and expect to get off cheaply.

I wonder, is the main impetus behind this decision coming from the lawyers or SCO? If it's the lawyers, are they scared of not being paid and having their costs balloon out - the risk being too high?

I can't really see SCO being the main push behind this. If they lose, they're going to lose all anyway, aren't they? Destroyed reputation, enormous legal bills - not a company success story really.

Re:So where's the rest going?

[tomhudson]

If it's the lawyers, are they scared of not being paid and having their costs balloon out - the risk being too high?

Maybe they know something we don't ... maybe SCO is going to be running into a much higher burn rate as their income contnues to dwindle ... which means that the whole thing will come to an end much sooner, so might as well get as much money up-front as soon as possible.

Re:So where's the rest going?

[BrynM]

Which leaves $6.4 million unaccounted for.

I bet it's set aside for things like filing fees, court costs, contempt fines, brib... er, inversigations. Don't forget that The State always gets it's share.

Re:So where's the rest going?

[Anonymous Coward]

If they lose, they're going to lose all anyway

Umm, you misspelled when

Re:So where's the rest going?

[vondo]

Something else I saw had mention of $5M for expert witnesses. With contingency, that might come to $6.4M (or court fees as another poster mentions).

Re:So where's the rest going?

[hashish]

They will have to pay IBM's legal fees when they lose.

Re:So where's the rest going?

[killjoe]

"If it's the lawyers, are they scared of not being paid and having their costs balloon out - the risk being too high?"

That's basically it. Originally they probably thought IBM would buy SCO to make them go away and everybody would be rolling in dough. Now that the stock is tanking and the case looks doomed the lawyers want to make sure they get paid. They can wipe their assess with the SCO stock they got but they want to make sure the gold toilet seats are paid for in cash.

Re:Until Microsoft slides more money under the doo

[Anonymous Coward]

Using bold kinda provokes a creepyness from beyond the grave!

Kevin McBride, WTF?

[mr.henry]

Is he related to Darl?

Re:Kevin McBride, WTF?

[Anonymous Coward]

Yes, it's his brother.

Re:Kevin McBride, WTF?

[aweraw]

Yes. His brother.

Shady...

Re:Kevin McBride, WTF?

[tuxter]

It's good to see nepotism alive and well in the corporate world. So how much does darl make from all this then?

Re:Kevin McBride, WTF?

[Anonymous Coward]

Yes they a breeding.

Soon there will be a whole army of McBrides. Then all your Linux are belong to SCO

Re:Kevin McBride, WTF?

[gl4ss]

* It's good to see nepotism alive and well in the corporate world. So how much does darl make from all this then?*

probably already made.. the stock was quite up in the middle.

on a more serious note.. WHO ELSE WOULD WORK FOR HIM????

Re:Kevin McBride, WTF?

[cgenman]

Would that be the evil twin or the good twin?

I'm so confused.

Re:Kevin McBride, WTF?

[Jeff DeMaagd]

Either that or the state of Utah is more inbred than one would have expected.

Cap

[tuxter]

Executioner puts cap on Darl McBride's head before throwing the switch......

Re:Cap

[PornMaster]

With a dry sponge, a la Green Mile?

Re:Cap

[tuxter]

Why would you put a dry lawyer on his head?

Re:Cap

[PornMaster]

I was about to say that dry lawyer is redundant, but there are too many that are like runny shit.

Re:Cap

[magefile]

Why a dry sponge? Wouldn't you want a wet one, preferably with a saline solution so it conducts electricity?

Re:Cap

[tuxter]

You haven't seen green mile have you. It's like cutting someones heart out with a spoon.... Why? Because it hurts more you idiot!

Re:Cap

[PornMaster]

A wet sponge would make for a more effective killing machine, a dry sponge (at least as presented theatrically in The Green Mile) makes it less efficient at killing, so there's a lot more pain/torture.

Re:Cap

[Anonymous Coward]

hopefully they forgot to wet the sponge...

Planning for the Countersuit

[Magickcat]

After all, they need to save their cash for the money they'll loose when it comes to the countersuits after they loose. All in all, it's great to see SCO planning ahead.

I want first dibs on an official SCO ergonomic chair when the sell off comes around.

Re:Planning for the Countersuit

[tuxter]

First dibs on a genuine Darl McBride head-on-a-stick when it becomes available....

Re:Planning for the Countersuit

[tomhudson]

I want first dibs on an official SCO ergonomic chair ...

I hear they're made out of wood, with arm and leg straps, and a metal cap with a hood, all connected to some big dynamo.

Don't you mean you want first dibs on throwing the switch?

Re:Planning for the Countersuit

[spir0]

After all, they need to save their cash for the money they'll loose when it comes to the countersuits after they loose

I think you mean lose, not loose.

Both words are quite different.

That sheep you share with your friends is loose, but Kerry is a loser. You see? Why the words aren't Looze and Loose is beyond me. It would have save a lot of confusion. Mind you, American's have changed a great many words like Realise to Realize for the sake of correct pronunciation.

Re:Planning for the Countersuit

[dmaxwell]

Replace the switch with a dial. It can last longer that way and much fun can be had if the 40mA point is marked on the dial so you don't roast your party favor too quickly.

Re:Planning for the Countersuit

[Magickcat]

I think you mean lose, not loose.

Both words are quite different.

Please excuse my error. Shakespeare of course was a terrible speller, so my mistake is merely a humble tribute to the great bard.

Re:Planning for the Countersuit

[Ohreally_factor]

Mind you, American's have changed a great many words like Realise to Realize for the sake of correct pronunciation.

Could you give us some more divers examples.

Re:Planning for the Countersuit

[Ohreally_factor]

What have they got to lose? They were dead meat before the litigation. There is no need for them to set aside a prudent reserve, because the company has no future.

Re:Planning for the Countersuit

[spir0]

sure. neighbour was changed to neighbor, colour was changed to color. oh man, it's monday morning and my brain isn't working at full capacity. I'll try and remember more and let you know. hell, I could spend hours looking through my dictionary...if only I had brought it to work.

what was the topic here? I'm sure I've lost the plot.

at this burn rate

[Anonymous Coward]

does this mean another 2 years of SCO?

Re:at this burn rate

[Anonymous Coward]

does this mean another 2 years of SCO?

You wish, it's four more years. Four more friggin years! Oh wait, that's a different American nightmare...

like deja vu al over again

[Fishstick]

SCO Caps Legal Expenses At $31 Million
Posted by timothy on Wednesday September 01, @10:08AM
from the nice-prime-number-of-millions dept.

Re:like deja vu al over again

[Anonymous Coward]

Wow, they're two months apart. The iWon Money article states it like it's today's news, even though CNet reported the same news two months ago. So the dupe isn't slashdot editors reporting the same URL, but it's the same news reported from different websites. So either SCO made an announcement today that repeated something they said from two months ago, or iWon Money lied about this being today's news.

Re:like deja vu al over again

[Ohreally_factor]

I'm not sure that the distinction is important to you, but a letter of intent is not the same as a signed contract. The contract was just signed. The previous story was about the letter of intent.

Re:like deja vu al over again

[Fishstick]

Yep I get that and actually pointed that out in a subsequent post.

Although technically it is a development in the story, it is not really new or interesting (to me, anyway). I've given up on expecting /. editors to to check on duplicate stories -- in a (more) perfect world the summary would have pointed out that this was originally a story in September and this is a development.

Then again, guys like me wouldn't get +5 informative for pointing out the story was a "dupe". ;-)

Re:like deja vu al over again

[vsprintf]

I'm not sure that the distinction is important to you, but a letter of intent is not the same as a signed contract. The contract was just signed. The previous story was about the letter of intent.

Okay, thanks for clearing that up -- I thought it was a dupe, too. The fact that lawyers agreed to accept more money is certainly newsworthy.

Welcome to September

[pez]

News.com story

Re:Welcome to September

[Anonymous Coward]

It has been pointed below that while September story talks about intent, this is an actual agreement.

Re:Dupe

[WindBourne]

I do not think so. There was some time ago that the agreement was signed and it was annouced (including on /.), but this is further clarification that just came out today (or yesterday).

Math time!

[Lord_Slepnir]

Alright, so this crap has been going on for about 18 months now. A bit longer, but let's just say 18 for a round number. That has cost them $12 million. Thier cap is $31 million. 31 / 12 = 2.58. Now we multiply that by how long they've done this, so 2.58 * 18 = 46.5 months, or a little over 2 more years, assuming they keep spending the way they are now

This is less than encouraging

Re:Math time!

[apok04]

Interesting is right! But I don't like 12... Since you seem to have just pulled that number out of the blue, can I arbitrarily pick another number? How about pi? By your logic: 31/pi = 10. 10*18 = 180 months. My math is even less encouraging! ;)

Re:Math time!

[InfiniteWisdom]

Not quite....they have reached an agreement with the lawfrm to cap their bill at 31m. Not that they will fire their attorneys and call it quits once the bill hits 31m. Their attorneys may get a little less enthusiastic once they hit the cap, but the litigation itself will continue.

Re:Math time!

[twiddlingbits]

I don't think SCO has the cash flow to drag this out much longer. Remember they have the Novell case and the RedHat case pending as well. I seem to recall over at Groklaw (http://www.groklaw.net)that somone did the math which showed at the rate they are going with NEGATIVE net income, plus legal expenses they could hold out around 16 months with the cash they have on the books. And that was about 4 months ago. Even when they go "tits up" the legal cases will continue. If you really want deep insight into SCO vs. The World read Groklaw.

Re:Math time!

[RodeoBoy]

Considering that the last time this was posted here 2 months ago they had spent 7.1 mil and now it is 12 mil that is about 5 mil in two months. I give them 6 months tops, but then again I am an optimist.

Re:Math time!

[toby]

I'm sure the stockholders won't let them fritter and waste all their dough in such an offhand way... One way or another, this nonsense will stop.

Re:Math time!

[CmdrPorno]

Exactly. This looks really great for the attorneys right now, because they're practically guaranteed the $31m (wonder how many of them are billing close to 24 hours per day?), but once they realize they've hit the cap, they will pretty much stop trying, because at that point they're working for free.

It sucks to be Boies

[GQuon]

It really sucks to be Boies. He, and the snide side of my personality was looking forward to weeks and weeks of election litigation. And now this SCO deal is failing.
Oh, well. At least the lawyers got paid.

Re:Dupe

[Fishstick]

Sory on ./ in September

http://yro.slashdot.org/article.pl?sid=04/09/01/15 16246&tid=123&tid=88&tid=106

Re:Dupe

[Saeed al-Sahaf]

There is no way this could be a dupe since the agreement was only reached YESTERDAY.

There WAS "talk" about the cap a month or two ago, but agreement was never reached.

umm...

[Anonymous Coward]

This has been posted here before, right?

Jesus christ, for a second there I thought I'd gone back in time...

Re:Dupe

[Fishstick]

then, letter of intent

The company has signed a letter of intent with its law firm, Boies, Schiller & Flexner, to restructure its fee agreement, Chief Financial Officer Bert Young said in a conference call announcing financial results for SCO's third quarter of fiscal 2004, which ended July 31. In the quarter, SCO had a net loss of $7.4 million on revenue of $11.2 million.

now, signed an agreement

WASHINGTON -(Dow Jones)- SCO Group Inc. (SCOX) said Thursday that it signed an agreement with its attorneys to limit cash expenditures in litigation with several corporations, including International Business Machines Corp. (IBM).

I guess it makes a difference to the lawyers and SEC, but not a real bunch of new info, really.

Linux is not relevant to this - two man scam

[dbIII]

It may as well have been some secret snake oil formula at stake. I see the whole thing of the CEO of a small company setting up an unwinnable court case against IBM as a way to funnel funds into the family pockets. Stay tuned for SCO to implode and Darl to sue for what he can get from it's smoking corpse. If legal dogs chase, Darl will simply funnel the funds somewhere inaccessable, pretend he is bankrupt, and blame it all on those kids and their darn penguin destroying the American way.

Re:Linux is not relevant to this - two man scam

[Anonymous Coward]

Stay tuned for SCO to implode and Darl to sue for what he can get from it's smoking corpse. If legal dogs chase, Darl will simply funnel the funds somewhere inaccessable, pretend he is bankrupt, and blame it all on those kids and their darn penguin destroying the American way.

Yea, I bet next Darl will sue the stockholders for running out of money during such an important "transaction". You see, Darl was told the money was there, but because the stockholders were actually sane and bailed out and the stock price tanked, the stock holders are responsible! Must be! Only a twisted mind could think... Oh yea, we are talking about Darl arn't we?

Too bad

[Camel Pilot]

SCO does not put a cap on crap!

Oh Well Darl McBride in his role as the Snidely Whiplash of the tech world has provided hours of entertainment. Can't wait for the ending....

For those of you keeping track at home...

[Anonymous Coward]

Insider trades at SCOX:

10/12/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 88,580 Open Market Sale proceeds of $314,280.59

10/05/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 59,865 Open Market Sale proceeds of $215,714.00

10/04/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 90,135 Open Market Sale proceeds of $326,372.70

9/29/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 42,110 Open Market Sale proceeds of $141,174.00

9/27/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 69,800 Open Market Sale proceeds of $237,810.00

9/23/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 55,000 Open Market Sale proceeds of $194,300.00

9/22/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 45,000 Open Market Sale proceeds of $155,250.00

9/21/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 16,000 Open Market Sale proceeds of $57,580.00

Sell, sell, sell!

And today's stock spike...

Re:For those of you keeping track at home...

[Anonymous Coward]

SCOX? SuxCOX? How very odd (and apropos)...

Re:For those of you keeping track at home...

[MsGeek]

Check out the YTD view...very, very instructive.

Wow.

[philovivero]

I thought SCO were a bunch of scam artists. Looks like the lawyers are the ones running the scam. $31 million for a clearly fraudulent case. Nice.

Surely it must be hard for these guys to go home and sleep at night?

Re:Wow.

[philovivero]

Oh! Ha ha. Silly me. The SCO scammers *ARE* the lawyer scammers!

The company already paid $12 million to Boies Schiller & Flexner LLP, Kevin McBride and Berger Singerman, which provide legal services to the company.

No, no. It could be coincidence. If it was Korl McBride or Keveryl McBride then it'd be undeniable proof. But Kevin McBride may be a perfectly scummy non-SCO-related lawyer.

Re:Wow.

[Anonymous Coward]

>>.....Looks like the lawyers are the ones running the scam. $31 million for a clearly fraudulent case. Nice. Surely it must be hard for these guys to go home and sleep at night?

We are talking about LAWYERS. Do sharks have trouble sleeping after they devour a tuna, a seal, or a penguin? (SORRY, could not resist the example.)

Re:Wow.

[mlyle]

No, Kevin McBride is Darl's brother:

CRN's top 25 execs of 2003:

His brother, Kevin McBride, says the boys were also taught how to shoot. "We were taught to protect ourselves and what was ours at a very early age and started carrying guns for hunting when we were very young," Kevin says.

Re:Wow.

[evilroot]

Are you kidding? I know if it were me I wouldn't lose a minute of sleep for taking large amounts of money from SCO! And I have MORALS!

Re:Wow.

[ATomkins]

Surely it must be hard for these guys to go home and sleep at night?

I doubt it; not while being cushioned by huge piles of money, surrounded by many beautiful women.

Re:Wow.

[CliffH]

Yeah, all that money stuff in their matresses must not be good for the back, huh. :)

Re:Wow.

[Anonymous Coward]

A bed of cash isn't as comfortable as it sounds. Every morning you wake up with a few Ben Franklins in your butt crack. There's just some places Ben Franklin doesn't belong.

Sincerely,
Boies Schiller

Re:Wow.

[Anonymous Coward]

Surely it must be hard for these guys to go home and sleep at night?
No.
Kevin

Re:Wow.

[Anonymous Coward]

Surely it must be hard for these guys to go home and sleep at night?

For $31 million, you could buy a *really* comfortable bed, Natalie Portman to tire you out, and Britney Spears to sing you to sleep.

Re:Wow.

[Mr Rohan]

Looks like the lawyers are the ones running the scam.

Don't the lawyers always couch their actions as "acting under the client's directions" - so even if they know it is a scam they have the client as scapegoat?

Re:Wow.

[Anonymous Coward]

Of course not! it's the AMERICAN WAY, as proved by the recent elections

Re:Wow.

[Anonymous Coward]

The most moral thing to do is take any money you can through any legal means from SCO. Furthering their demise is the moral thing to do.

In Other News...

[Kurt Wall]

Darl McBride announced today that he would sell licenses to use his face on Halloween masks. The licenses will reportedly be available for $695.00 and come with a guarantee that you won't be sued.

...until he changes his mind.

Re:Dupe

[Anonymous Coward]

RTFA, numbnuts

They signed a letter of intent in September.

The only "news" is they actually signed an agreement now.

The story, from a /. perspective, did not substantially change since it was originally posted MONTHS ago.

Yikes

[Anonymous Coward]

Why do I keep seeing the Disney logo in that caldera logo? why doesnt Mickey Mouse sue them into oblivion?

Re:Yikes

[Anonymous Coward]

Why do I keep seeing the Disney logo in that caldera logo?

Because they are a Mickey Mouse operation?

Hard to sleep at night?

[Anonymous Coward]

They're lawyers. Lawyers who knowingly took a sketchy case with a sketchy company. May the fleas of 1000 camels infest their loins....

Re:Dupe

[Anonymous Coward]

No,perhaps you should read more about this, since you have your head up your ass.

Yeah right..

[Anonymous Coward]

And I'm gonna quit drinking coke and smoking cigarettes.

Suing IBM is 'patently' insane

[gelfling]

IBM has over 400 people on the payroll who do nothing but look at other companies to sue for possible intellectual property infringement.

IBM fought the United States government for more than 20 fucking years to a stalemate in their antitrust case.

Taking on IBM is a little more crazy than taking on entire Chinese Army.

Re:Suing IBM is 'patently' insane

[Anonymous Coward]

Taking on IBM is a little more crazy than taking on entire Chinese Army.

Yeah, no kidding.

The Chinese army has nukes, but nobody will use nukes because they destroy so many lives and businesses, wipe out economies, and make areas uninhabitable for decades.

IBM has lawyers, and everyone uses lawyers as a first strike, despite the fact that they destroy so many lives and businesses, wipe out economies, and make areas uninhabitable for decades.

The question is, is it better to elect a rich businessman from a large multinational, or a lawyer? I would have rather voted for a plumber, they take all your money, but at least leave you with a working shitter.

Re:Suing IBM is 'patently' insane

[bhima]

"Taking on IBM is a little more crazy than taking on entire Chinese Army", with a plastic spoon!

Re:Suing IBM is 'patently' insane

[johnw]

The problem is, if you want to sue someone for $3 billion, you have to pick someone who's got $3 billion.

The fact that they also have a legal department which covers the land masses of three major planets is just an unfortunate side effect.

John

Re:Suing IBM is 'patently' insane

[Anonymous Coward]

IBM has lawyers, and everyone uses lawyers as a first strike, because they destroy so many lives and businesses, wipe out economies, and make areas uninhabitable for decades.

Fixed :)

No, you didn't go back in time

[3770]

No, you didn't. But just in case, if you do, don't step on anything.

I saw what can happen on the Simpsons.

Capping the fees means Novell/SuSE wins

[postbigbang]

If SCOG can't get adequate representation because their counsel is distracted now that their fees aren't going to be paid, then an avalanche happens. The SCOG v Novell litigation surrounding copyright title slander goes in favor of Novell. Novell, ostensible owner of the copyright can then get sued by SCO, but there's a cap now and Novell has lots of cash remaining to burn on litigation. It also sets a precedent that Novell owns Unix copyrights. They manifest themselves through a fairly loyal GPL/FOSS follower, SuSE. Ipso facto, Novell faces down SCOG, Microsoft and Sun. Then they roll out the serious Microsoft busters in the form of ways to do FOSS-based services from the top down. Noorda will finally smile.

31 million eh?

[deek]

And afterwards, Boies et al will be able to buy SCO outright, for all it will be worth. With plenty of change left over.

Re:31 million eh?

[jimicus]

Why would he want to buy a company which has no products, no services, has alienated an entire industry and has several nice big fines outstanding?

Maths time!

[Anonymous Coward]

let the flames begin!

easy way out

[sPaKr]

Any one else wonder if SCO is just setting themselfs an easy out later? I mean when this doesnt go SCOs way and they hit the cap all Darl has to say is 'We would have won if we had more time and money' then he keeps the shadow over linux serving his Micky$oft masters. Since this was never about making money only hurting linux, I suspect this is a winning stratgy in the end. All MS has to say is point to some shlep that buys up the reminants of SCO and say they can sue you, this was never settled. Lets hope SCO implodes and someone like IBM or Novell buys them for pennies on the dollar and kills this lawsuit business.

Re:easy way out

[Trailer Trash]

I mean when this doesnt go SCOs way and they hit the cap all Darl has to say is 'We would have won if we had more time and money' then he keeps the shadow over linux serving his Micky$oft masters.

Hence IBM's countersuit. SCO can drop their own lawsuit when they run out of money, but it's not like IBM is going to let up on them.

on top of it all, SCO is nepotistic

[MMHere]

To top it all off, SCO is nepotistic.

The above mentioned, Kevin McBride, is brother to Darl McBride acording to this Computer Shopper News article.

So even if Darl fails in his quest to sue every sentient being (and SCO dies), he will have kept lots of money in the family.

Re:on top of it all, SCO is nepotistic

[killjoe]

Think about it.

SCO takes money from canopy, MS, Sun, and the shareholders and transfers it into the brother of the CEO. Why is that even legal?

Kevin McBride. Darl's family?

[EmbeddedJanitor]

I wonder if this is a neat way of siphoning dollars into the Darl Family Trust? It has been obvious for a while that Darl has no interest in making money from selling software, so what angle are they playing?

Re:Kevin McBride. Darl's family?

[mykepredko]

I've always asked that question, since I found out that Kevin is Darl's brother. It seems to me that no matter what happens, there's going to be a (large) supply of money in the family.

Personally, I always thought it was an incredible strategic mistake to have Darl's brother as a lead attorney in the case - it really damages the credibility of SCO's case and actions.

myke

Time == $$$$

[hwestiii]

So this can go on approximately 1 1/2 times as long as it has so far? That's good news?

A cap? Don't they mean a cork?

[AndroidCat]

"I'll never forget the look on that poor monkey's face as it tried to put that cork back in." (from that pig joke)

Re:A cap? Don't they mean a cork?

[Anonymous Coward]

WHAT JOKE?

i dont know any joke

Re:A cap? Don't they mean a cork?

[AndroidCat]

Google on pig monkey cork and you'll find many versions. None come close to the true and awful tale, of course. There was a cover-up, in the end, and the government was behind it.

Re:A cap? Don't they mean a cork?

[jedinite]

Three agricultural scientists were determined to discover how much a pig could eat before it just had to take a shit. To this end they procured a Yorkshire sow and pushed a large cork into her butt.

After six weeks of force feeding, the sow was the size of the Goodyear airship and threatening to burst. Being humane types, the scientists agreed that the cork must now be removed.

No-one wished to volunteer for the job, however, so in true scientific tradition, they decided to train a monkey for the task and swiftly put a small gibbon through a crash course in cork-pulling.

The day came and the pig was air-lifted out to the desert for safety's sake. Special equipment was set up to monitor the event. Picture the scene: In the middle of the desert, the pig. Behind the pig, the monkey. One mile behind him, the first scientists with a video camera. One mile behind that scientist are the other two scientists with a seismometer. Finally, the monkey reaches up and pulls out the cork. SPLAT!

When the massive geyser has subsided, the two scientists find themselves knee-deep in pigshit. Grabbing shovels they wade forward and dig out the first man who has been buried up to his neck. When they free him they find that he is laughing hysterically.

"What's so funny?" they ask.

"You should have seen the monkey trying to get the cork back in!"

Cent of Blood in the Water

[iamlucky13]

I am continuously amazed at the ability of lawyers to run up huge bills. I've heard $200/hour quoted somewhere as an average, so I'll run with that, even though I know many charge way more. Someone else quoted 18 months of activity in the discussion above. I skipped a lot of assumptions, but that translates to about 60000 hours, which means 19 lawyers working 40 hour weeks, raking in about $600000 each ($400 K/year).

Does anyone know the actual number of lawyers involved or their rates and can anyone enlighten me about what other costs SCO is likely including in their figure of $12 million spent so far?

Re:Cent of Blood in the Water

[dasunt]

I am continuously amazed at the ability of lawyers to run up huge bills. I've heard $200/hour quoted somewhere as an average, so I'll run with that, even though I know many charge way more.

For criminal law, the average fee seems to be about $125/hour [1,2]

For civil law, the average fee seems to be higher, about $150/hour [3]

You are off by at least $50/hour for a fee.

Now consider -- in many of the high-priced cases, you aren't paying for a lawyer to sit around all day playing golf. That fee goes for research and for expert testimony. In SCO's case, they'll need an expert on patent law, researching of all the patents in question, researching any prior art of the patents, and researching any decisions relating to similar patent cases. They will also need a research about the code in question, an expert on unix code, reviewing all unix code snippets in question and comparing their similarity to other code snippets, researching the origin of the code in question, and researching decisions about any similar code cases.

That requires specialisation, and specialisation in any field gets expensive. That also requires a huge support staff, which eats up the cost as well. In big cases, companies tend to go with the best legal advice they can find, the best lawyers, the best track records, the best education, etc, and that raises their average cost of lawyers.

Combine this with SCO's weak case, which will require more shoring up, thus resulting in more billable hours.

The legal fees seem more realistic now, don't they?

Re:Cent of Blood in the Water

[killjoe]

In a big time law firm starting salary is around 120-150K. You have to be graduating from a bigtime law school to even work there. For the first few years you work like a dog doing mundane work and research. You typically put 12 hours or more every day. Later on you may get to actually act like layer rather then a paralegal and make even more money. At that time you don't work nearly as hard because you have underlings. If you are lucky you get to eventually make partner. At that point you are making at least one million more like tens of millions a year.

Again this is in a big time law firm in NY or LA or something. In your local town the lawyers also work 12 hours a day but they don't make as much. No matter where you are though unless you are a prosecutor or a public defender or something you are in the top 5% of earners.

It's a lot of work but every lawyer I know ( and I know quie a few) likes it. I would not want to do it but I guess somebody has got to.

Re:Cent of Blood in the Water

[litac]

Your calculations aren't quite correct. Billable hours and working hours are not equivalent. Associates in a law firm generally need to bill 2000 hours per year, which is about 38.5 hours a week. However, rarely can an attorney bill for every minute of a work day. The average attorney will be able to bill about 2/3's of the day, which means that most associates work about 60-80 hours a week. Walk into any major law firm around 8 - 10 pm - and it's often just as busy as it is at 3 - 5 pm. I know it's fun to bash lawyers, but consider these facts: Without lawyers, there would be no Constitution or Bill of Rights. The Southern Poverty Law Center is staffed by, gasp!, lawyers - who have risked their very lives to ensure voting rights, enforce desegregation laws, and obtain civil remedies for those whose lives have been damaged or destroyed by hate. Without lawyers, there would have been no justice at Nuremburg, or at The Hague, or in Praetoria. Without lawyers, there would be no freedom of the press, no right to privacy, and basically very limited personal liberty. Yes - of course there are many lawyers who abuse the system for the sake of the all mighty Dollar, but then again - there are many who spend their lives defending the poor or prosecuting criminals for very little money (the average salary for a Public Defender in NY is $35k a year, a District Attorney does a little better).

Re:Cent of Blood in the Water

[Anonymous Coward]

[i]For criminal law, the average fee seems to be about $125/hour [1,2]
For civil law, the average fee seems to be higher, about $150/hour [3]
You are off by at least $50/hour for a fee. [/i]

No he's not. At big law firms, like the firms involved in this case, the fee for brand new attorneys is at least $125/hr. IBM's attorneys are based in New York, so I wouldn't be surprised if their brand new attorneys billed $200/hr, with the partners billing at least $400/hr.

And don't forget travel expenses. Boies is based in Florida, but the case involves parties in NY and UT. There's a lot of plane tickets and hotel bills.

Obligatory stock price comment

[shanen]

Actually, SCOX was in the $2 territory, but they've miraculously bounced back up to $3.50 over the last couple of days. No, I can't understand it. Makes as much sense as the recent election.

40% "none of the above"
30% Dubya
15% Not-Bush
14% Kerry

(Okay, guessing on the split, but "none of the above" definitely won again.)

Re:Obligatory stock price comment

[killjoe]

Mmm. The exit polls were very pro kerry and yet the vote tally didn't turn out that way.

How odd.

That is really bad

[Anonymous Coward]

I really want to see SCOX got drained. They are pure evil. We must give some credits to IBM

I bet they wish

[Anonymous Coward]

they could cap their stock losses

oh wait, some are hedging bets on those. right

Oh, please mod the parent up...

[mark-t]

It's too priceless to ignore... mod this down as OT if you wish, but mod the parent up.

Re:Oh, please mod the parent up...

[rco3]

If I had mod points today...

Boies, Schiller & Flexner Limerick

[Anonymous Coward]

The Yahoo! SCOX financial message board's daily limerick was on the topic of The SCO Group's poor handling by Brent Hatch, esq. (son of Orrin) and BS&F (Boies Schiller & Flexner).

When SCO implicated the theft
from UNIX to GNU copyleft,
the plot was dispatched
only partially Hatched,
but totally B.S. & F'd.

SCO Limerick of the day archive is here.

Re:McBride?

[Anonymous Coward]

That's Darl's brother looting the shareholder value. Come on, you had some assumptions that SCO was a decent operation?

Re:Dupe

[Anonymous Coward]

./
You probably mean /.

Very Misleading Statements From SCO

[linuxguy]

[From Yahoo Finance Posting by stdsoft0]:

Investors need to be very, very careful. The wording of the legal fee "cap" announcement is highly deceptive.

While it may sound good to the uninformed, the legal fee "cap" does nothing practical to help SCO with the legal expense problem. Taken together, the following statements from the 8-K filing are HIGHLY misleading:

Statement 1:
"For future legal fees, the Engagement Agreement will require SCO to pay to the Law Firms $2.0 million per quarter for each successive quarter beginning September 1, 2004 and ending December 1, 2005..."

Statement 2:
"SCO's purpose in entering into the Engagement Agreement was to limit the cash expenditures needed to pursue the SCO Litigation to approximately $31 million, until the litigation with IBM concludes."

Taken together, SCO is saying that the litigation with IBM will end by December 2005. The problem, though, is that only the FIRST round of court action with IBM will have concluded by 12/2005. For the sake of argument, consider the highly unlikely event that SCO wins some sort of favorable decision. The appellate process will have only just begun. The odds of a decision being sufficiently favorable to warrant additional equity investment is highly unlikely, and SCO will be out of cash. Further, SCO is likely to still be defending against counter-claims.

Scam

[attobyte]

I bet they had this planned from the beginning. The banks that loaned them the money must feel like a a$$.

Re:Until Microsoft slides more money under the doo

[Anonymous Coward]

I can't decide which would be funnier... should the expected amount be $699 or one of those sideways 8 thingies...

Effects on share price

[siskbc]

So anyone know why this puts their share price http://finance.yahoo.com/q/bc?s=SCOX&t=3m&l=off&z= m&q=l&c= up 15% on the day and it looks like 25% on the week? Seems to me someone out there thinks they could still make money if they'd just sell some of their great software instead of wasting their money on this lawsuit. *snicker*

no honor among theives

[twitter]

And afterwards, Boies et al will be able to buy SCO outright, for all it will be worth. With plenty of change left over.

Do you really think anyone is going to be paid? Well, the unlimited Linux license perk will work. Works for me.

Re:Dupe

[innosent]

No, ./ is Slashdot in the parallel universe where stories are always fresh and there are never any dupes. Our universe is much more cruel, so we get /.

SCO Puts a Cap on its Legal Expenses

[whitespacedout]

If SCO had any sense they'd put a cap in their lawyers.

Re:SCO Puts a Cap on its Legal Expenses

[frkiii]

No, they'd put a cap in Darl, then in their lawyers.

Don't be a fool, stay in school.

[twitter]

I need to get me a piece of that. :-)

What makes you think McBride has got it? linuxguy seems to have the scoop and McBride has nothing.

Stay is school. The job market is terrible, thanks in part to lawsuit happy wipes like SCO. Still, it looks like the bad guys are losing. In a few years, you might emerge onto a better market. If you get out now and whore like McBride, you might end up in jail.

Does it matter anymore?

[theolein]

I've noticed this SCO litigation story not even making major news headlines anymore, and even here on slashdot the interest is tailing off. SCO is not going to win their case. That is fairly certain by now unless certain, uhm, vested interests *cough*new reelected friends of microsoft*cough* bring their weight to bare on the legal system. But I don't think that's going to happen, and if it does happen, expect many tech companies to simply pull up stakes and move outside the US.

In the time being, Linux is continuing to gain corporate and government mindshare all over the world. I don't think that all that many people really listen to MS paid for FUD tactics. The rate of Linux uptake speaks for itself.

Re:Does it matter anymore?

[Anonymous Coward]

SCO is done for even if the case is a draw. They've proven that you're far more likely to be sued if you're already a customer of theirs than if you're not. So the easiest way to limit your liability with them is to never become a customer. Nice work, Darl.

Re:Does it matter anymore?

[16K Ram Pack]

And IIRC, IBM are unleashing their patent portfolio on SCO as well.

It's being given away

[dbIII]

Those lawyers have done nothing for SCO and yet they have greatly enriched themselves from shareholders' money.

They have been asked to do things and given money for it. It may not be in the intrests of the shareholders at all - but the CEO and not the legal team he has hired (including giving vast amounts of SCO money to his brother) is fully responsible. If you instigate silly court actions, you need to pay someone to carry them out. Personally I think it is all a con - share pumping and funnelling as much cash as possible out to his own brother for as little work as possible. Incidents like the evidence not being ready beacuse they all had to take holidays should be a bit of a clue.

SCO is being fleeced, and linux is just the excuse.

I call bullshit

[rsilvergun]

A lawyer is the agent of his client's interests in the legal realm; simply that and nothing more.

That's akin to saying soldiers who commit war crimes are just agents of the Gov't. Sure, legally that may be true, but doing something morally reprehensible just because someone's paying you/ordering you still makes you morally bankrupt. More so for Lawyers, since they don't face face anything worse than losing a client by saying no.

Better example: Doctors who perform dangerous and unnecessary surgery at the patient's behest. Take Micheal Jackson for example. Ignoring the fact that he looks hideous (subjective, I know), from what I've heard he's got serious medical problems from all the surgery (i.e. like his nose is largely ornimental now).

Just because you want to do something boneheaded or evil doesn't mean you should be allowed to. That's what professional ethics is all about: telling you no.

Re:I call bullshit

[Ohreally_factor]

I take it you've never needed a lawyer. Consider yourself lucky that you've gone through life without an insurance company or other big business trying to screw you over.

Re:I call bullshit

[rkent]

That's akin to saying soldiers who commit war crimes are just agents of the Gov't. Sure, legally that may be true, but doing something morally reprehensible just because someone's paying you/ordering you still makes you morally bankrupt.

Perhaps I should clarify. The standard to which lawyers are held is that they must practice "zealous advocacy" of their clients' interests (both in the civil and criminal areas, by the way). So once they've told you what their goals are, you have to pursue them to the extent possible within the law. That's the code of legal ethics. You HAVE to. Now, if you want to say the American system of legal ethics is morally bankrupt, you might have a point, but that's a whole other argument; the system what we've got right now.

Even within that standard, though, you have to be a zealous advocate "to the extent the law allows", which rules out things like purjury and participation in ongoing crimes. And frivolous litigation is forbidden, so I think someone might have a claim against these guys. But there's probably enough of a chance for them to win, that the litigation itself isn't "frivolous", so maybe we're just stuck with Darl McBride's lawsuits until his $31M runs out.

SCO is having legal issues with their website

[siliconarrow]

It is known that the SCO Group has planned November 1 launch of its legal information site to counter the popular Groklaw.net site. Apparently, this wouldn't happen any time soon. Read here: http://rumorbits.com/phpbb2/viewtopic.php?t=36/

I don't think the banks care

[dusanv]

They gave them our money (in my case literally since I'm a RBC customer). SCO didn't scam anything our of IBM, big deal - the loss is the cost of doing business. Seriously, did you ever think about the type of jackass in the bank who approved investing in SCO? Talk about gross incompetence.

Spoilers!!!

[Ohreally_factor]

Spoilers!!

Darl ties Richard Stallman (wearing a dress and a wig with long blonde braids) to a train track, but Linus Torvalds (wearing the uniform of the Royal Finnish Mounted Police), arrives and frees Stallman just in the nick of time. They race back to town in time to stop Darl from presenting the ill gotten "Deed to Linux" to the town judge.

Newhart

[soloport]

"And this is my other brother, Darl."

Reminds me of Newhart :-D

Instead of putting a cap on legal expenses....

[Radiantal]

Maybe someone should put a "cap" in SCO's ass instead!

Re:Instead of putting a cap on legal expenses....

[Alsee]

And the best part is that they wouldn't be able to talk anymore.

-

Source of cash: Baystar, MS and Sun

[linuxguy]

> but that's also money that could have been invested in hiring software people to help improve their products

Most of the new money came to SCO from Baystar, Microsoft and Sun. I believe all 3 of these wanted SCO to put the hurt on IBM and Linux. None of these companies wanted SCO to develop any products. Baystar actually said it in no uncertain terms in several interviews they did.

> Here's a question for some legal expert. Since Boies et al were paid in stock a while back, they are now a major stockholder in SCO...

This was the plan but it never did happen this way. SCO ended up paying ~ $8mil. cash. We dont know why the lawyers did not want stock anymore. Maybe because they realized it was worth less than toilet paper in the end.

Funny thing is last year when Boies agreed to be paid in stock (it was flying high then) he said in the investor conference call that getting paid in stock is a bit unusual but they do it when they are confident of the direction of the company.

I wonder what changed?

What does that have to do with anything?

[rsilvergun]

it has nothing to do with the original point, which was that lawyers do horrible things only because their clients tell them, and are thus blameless. I may even at some point employe a lawyer for less than perfectly moral reasons. This would still not make the lawyer blameless (or me, for that matter). We're talking broad principles and ideas, and regardless of my personal circumstances it is still ideally wrong for lawyers to take on cases they know to be morally wrong or baseless.

Now before you get your panties in a bunch, this doesn't apply to criminal defense. The very moral doctorine of Inocent Until Proven Guilty means that a lawyer defending someone up on charges is _never_ doing something morally wrong, because he knows his client is innocent until proven guilty. In a civil matter, it is a lawyers job to advise a client on the likelyhood of them winning a case and to make a value judgement about whether the client even has a case. Failure to do so is morally reprehensible.

Oh, and most of those big businesses screwing me are doing it with the help of lawyers, thank you very much.

Re:What does that have to do with anything?

[Ohreally_factor]

Now before you get your panties in a bunch

Thanks! Now if I could get some help untwisting my knickers. . .

But seriously, I take your point. I just thought your comparing unethical acts with war crimes was too extreme. It sounds like the sort of hyperbole that certain tort reformers make. You know, the ones who want to reform the medical system by making it harder to hold HMOs responsible for bad acts.

It _is_ a service

[KiloByte]

Their lawyers are right here: the legal activity is a service. And they do have a big, paying customer.
Even more, this service is their primary purpose these days.

Re:Until Microsoft slides more money under the doo

[Anonymous Coward]

Hey! Them lawyers got it covered. Licensing fees for SCOsource? 33% goes to the lawyers. Big win in the lawsuits (yeah, right), 33% goes to the lawyers. Oh yeah, and SCOX gets bought out, merged or sold, 33% to the lawyers.

Other than that, the lawyers just get to collect millions until just about forever for SCOX (Dec. 2005), and after that, it's time to renegotiate the deal, just in case SCOX has any money left

Not Theoretical

[JamieKitson]

I believe there was a case of a cop killer (who's innocence has always been protested) who was put through a deliberatly painful death by the exercusioners by keeping the voltage down and using a dry sponge.

Darl IS the Evil Twin...

[Anonymous Coward]

...The other brother Darryl had nothing to do with SCO.

Lawyers are just corporate soldiers

[panurge]

Indeed, don't blame the lawyers, blame the legal system and the clients. Agreed, many lawyers are well paid (but not all) but in a way they have an impossible job. They have to represent the interests of rampant egomaniacs who are born liars, in a legal system produced ultimately by politicians with the attention span of a gnat and a desire to stay in power. It's a bit like being a soldier with the main risk being heart attack, nervous breakdown, marital breakdown, rather than getting shot in the head.

Before deciding to become a lawyer, ask yourself the question: given how I feel about _users_, how would I feel about working with clients who are the kind of people who end up in expensive lawsuits and so, for the most part, are not friendly, cooperative individuals who get on well with other people. And demand that you listen to their idiotic ramblings and read their pathetic documents and, instead of laughing at them, take them seriously because they are paying? Because, don't forget, to be a hotshot lawyer you have big outgoings and you have to keep the cash flowing. And telling Mr. Moneybags to anglo saxon sexual intercourse(1) off because his case is piss(2) poor will soon result in a negative cashflow situation. So please, focus your ire on the honest businessmen of SCO who are spending the company funds on this stuff.

(1) Now the Christian Right is in charge, I think we need to be careful about using naughty words.
(2)But not when it comes to words from the Bible, of course.

Sue Sco

[Anonymous Coward]

OK, everyone using Linux should file a frivilous... er rather a lawsuit of merrit against SCO. This will require SCO to answer lawsuits in virtually every county in the nation and perhaps abroad. Sue for say 5 million apiece. Just the lawyer power requied to even begin to answer those would kill them. If they don't answer it, you get a 5 million default judgement against them. Claim they messed up your chances of starting a business using Linux.

I spoke with David Boies yesterday

[tuxlove]

Yesterday David Boies (SCO's lead attorney) was on the Ronn Owens show on KGO-AM, taking calls from listeners. The topic was supposed to be his new book, but I couldn't pass up the opportunity to hear his justification for his horrible work with SCO. So I called and asked him.

He seemed a little daunted by my opening, in which I told him I had lost all respect for him. When faced with the question of "Why!?", he predictably said "everyone's entitled to a defense". Never mind that SCO's on the *offense*... His justification basically boiled down to the simple, "the courts will decide if SCO's claims are legitimate". In other words, he doesn't give a shit. He just wants the money, win or lose.

I have worked with attorneys before, more than once, and the ones I worked with didn't want a case unless it seemed somewhat meaningful, and definitely very winnable. The money was important, but reputation was moreso. Bad reputation translates to less money for the shortsighted, quite often.

I guess this simply shows he's a whore, moreso than most attorneys.

Gee...how generous

[Schwing84]

Now I can wait for them to jack it up after they lose the IBM lawsuit.

I read that wrong...

[Anonymous Coward]

SCO Puts a Crap in its Legal Expenses...oh wait, that's IBM putting the crap in SCO's stew... :)

at least 10 million more to get rid of

[Anonymous Coward]

So they've managed to sell some 800000 shares in two months, while sinking the stock price.

It would take 18 more months to get rid of the rest. I wonder if sco lasts that long.

Re:Dupe

[Anonymous Coward]

No you're the stupid head, no you are! NA na na na! Poopy face!

Misread headline

[jonasw]

I first read that as "SCO Busts a Cap in its Legal Expenses" and thought McBrizzy had gone gangsta on our collective ass.

Thats real funny....SCO..IS..Microsoft!!

[Anonymous Coward]

You read it sports fans. SCO IS Microsoft. Paul Allen, the silent partner who holds 50 percent of Microsoft Stock and who has been with 'ole Bill' since forever, is a part owner of SCO.
So why should'nt ole Paul just kick a little in
to shore up his financial trojan horse in the open source movement. Allen has been a part of SCO since it was Caldera and had not thought about buying the old Santa Cruz Operation. That last phrase is what
SCO used to stand for before it fell into the clutches of Microsoft.

Good news/Bad news

[Ohreally_factor]

The good news is that there are rumors that Ashcroft will get the sack.

The bad news is Rudy G. aka Skeletor.