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SCO Files for Chapter 11 Bankruptcy
Can you say "the SCO, the" in German? writes "Trading of SCO's stock has been halted on news that SCO has filed for Chapter 11 Bankruptcy. This move just so happens to fall on the eve of SCO's trial with Novell. One would think that their prior boasts were mostly bluster, that they believe they have almost no chance of prevailing at trial, and that they're now desperate to protect their executives from SCO's creditors while seeking yet another delay. From the release: 'The SCO Group intends to maintain all normal business operations throughout the bankruptcy proceedings. Subject to court approval, SCO and its subsidiaries will use the cash flow from their consolidated operations to meet their capital needs during the reorganization process. "We want to assure our customers and partners that they can continue to rely on SCO products, support and services for their business critical operations," said Darl McBride, President and CEO, The SCO Group. "Chapter 11 reorganization provides the Company with an opportunity to protect its assets during this time while focusing on building our future plans."'"
I know I'm going to be crying myself to sleep tonight.
And tell the fat lady to start warming up.
It's been a long time coming, but still they had to know this day would arrive. If shareholders weren't really in it for the crapshoot of beating IBM and Novell for $Billion$ they'd have a case against Darl and his lot for running the business into the ground pursuing frivolous lawsuits.
SCO's income from normal opperations must be down to a trickle with Linux and Windows Server vying for most of the market.
Emerge from Chapter 11? I can't see how, unless somehow there was a reversal of court decisions and they're doing nothing to grow their product market.
A feeling of having made the same mistake before: Deja Foobar
I think PJ needs to send the red dress to the cleaners, so it will be ready when she needs it!
General Relativity: Space-time tells matter where to go; Matter tells space-time what shape to be.
Where's my tiny violin?
Can you say Schadenfreude in English?
For those of you who bought SCOX stock in hopes that they would win this case, you had better sell it. In the past 20 minutes, it has dropped from $0.66 to $0.37 cents (and still is dropping). We want to assure our customers and partners that they can continue to rely on SCO products, support and services for their business critical operations. Would you care to list those products, support & services?
According to your market data your net income was a $16.6 million loss. And when your total revenue was under $30 million, you really shouldn't even try to keep operating. Why is this Chapter 11? I guess it's going to come down to one unkillable lawyer with SCO tattooed on his chest. At that point, we'll have to call an exorcist.
My work here is dung.
I seem to recall[*] that SCO told the court that there was no need for a constructive trust to protect Novell's money, since they (SCO) were in no danger of bankruptcy.
;-)
Now SCO is facing the exact same judge on Monday morning over the issue of how much money they owe Novell. I predict an interesting day in court
* OK, I was reminded of it by something someone (anonymous, so I can't give credit) said on Groklaw.
Don't Fuck With Tux
Free the Quark 3 from asymptotic confinement! Bring your charm! Don't get down! All colours and flavours welcome!
Aside from the lawyers for whom SCO is a source of billable hours, who relies on SCO for any products, support, or services? Are these the same folks looking to George W. for stategic planning? The masses going to Michael Vick for pet care tips? OJ for public relations?
even if SCO emerges from Chp 11 with a nice updated product line, they've already lost their credibility, good will, and confidence of customers. Who wants to buy anything from a company who might ending up suing you for no particular reason?
There are tons of good Unix and Linux distributors out there... no reason to choose SCO anymore.
You want free and good? Linux and BSD. You want enterprise level? IBM and Sun. You want Windows-based? Dell and HP. You wanna convert your entire revenue stream into attorney fees billed at $400/hr? Take SCO.
This is the internet...you can say "FUCK" here. In fact, when discussing SCO, I believe it's mandatory.
Momentarily, the need for the construction of new light will no longer exist.
From the point of view of SCO's execs, this has been a pump-and-dump scheme: they filed the IBM (and Novell) lawsuits, got the stock to soar on the hype and in the years since have been quietly selling their stock. But there are others with a stake here (remember all the cash infusions MS arranged?), who probably want the lawsuits to continue. I wonder what the judge thinks now about Novell's motion for a constructive trust?
Now he's available for the Head of FEMA position.
Actually, it plummeted as the insiders and people with inside knowledge traded out- trading is halted as soon as chapter 11 is filed. It might be interesting to see who actually sold today in the minutes prior to the announcement. The SEC has been known to take a close look at that in the past.
What a strange bird is the pelican, his beak can hold more than his belly can.
I don't want to rain on anyone's parade, but this is not good. Bankruptcy is like a protective cocoon that keeps businesses with cash problems safe from creditors. It is a way for SCO to stall further.
Bankruptcy prevents an entity's creditors from forcing liquidation of the entity's assets. If Novell won it's case against SCO, Novell could enforce it's judgment against SCO and force SCO to dissolve. If SCO was dissolved the case against IBM would disappear. Now that SCO has filed for bankruptcy it is protected from its creditors. Therefore Novell cannot get the licensing fees SCO owes it, and SCO can continue to exist.
Filing for bankruptcy is not SCO tossing in the towel, it is more like SCO knows it is going to lose, and is now trying to bite off Novell's ear to get Disqualified instead of Knocked Out.
No, it's not. Chapter 11 is reorganization of credit, usually done by businesses or individuals with large assets. It's in no way a preamble to chapter 7. If you can't prove that you will be able to reorganize your credit / business and keep your financial obligations, you cannot file chapter 11. It's not like you pick chapter 11, give it a shot, and when you fail, liquidate. It's one or the other. The only thing you said that makes any sense is the word protection - chapter 11 is commonly referred to as protection because you are being protected from involuntary bankruptcy (i.e. your creditor initiated the proceedings after non-payment) while you determine a strategy for payment / growth.
For those that don't get the reference to "the SCO, the" in German, it comes from Episode 9F22 "Cape Feare" of the Simpsons.
Sideshow Bob is applying for parole claiming that he wouldn't pose a danger to Bart:
Lawyer: "Don't you have a tattoo that says 'die, Bart, die' on your chest?"
Sideshow Bob: "No! That's German. It means 'the Bart, the'".
Parole Officer 1: "No one who speaks German could be an evil man!"
Parole Officer 2: "Parole granted!"
"There is no knowledge that is not power"
This is because Novell recently claimed that it should recieve 100% of the Sun & MSFT Sco Source deals plus 7% interest. The APA SCOX loves so much says Novell recieves 100% with Novell refunding 5% back as adminstrative fees.
Either way 95% is roughly 5 million dollars more than all of SCO's value Liquidated. I wonder if the bankruptcy trustee can declare Darl Mcbride's million dollar bonus for those two sales as invalid and ask for it back? I do hope so.
i thought once I was found, but it was only a dream.
The press release http://ir.sco.com/releasedetail.cfm?ReleaseID=264124 says:
"SCO owns the core UNIX operating system, originally developed by AT&T/Bell Labs and is the exclusive licensor to UNIX-based system software providers."
Those SCO guys are a real pantload! Hahahahah
Lacking <sarcasm> tags,
That in their press release, they say "SCO owns the core UNIX operating system..." ? Maybe they missed what happened in August? Link to the article on Groklaw
And in unrelated news, SCO has filed to trademark any portrayal of water swirling around in a toilet bowl, as that is their new corporate logo.
"G2 Computer Intelligence" is listed as a debtor by SCOX in their filings, so now we know she's the paided little whore we always suspected her to be.
That's right Maureen, you're fucking out of the fucking closet.
"Do you think we should drive a stake through his heart just in case?" — Peter Lorre to Vincent Price at Bela Lugosi's funeral
//Information does not want to be free; it wants to breed.
The problem with this theory is that Novell is not a creditor.
The court ruled that the money *belongs* to Novell. That's a far different legal issue than SCO owing money to Novell.
It's like a burglar trying to claim bankruptcy in order to keep the stuff he stole. Since the stuff isn't actually his (and in this case has been declared so in a court of law), bankruptcy doesn't protect it.
Bankruptcy judges and trustees have carte blanche to deal with creditors, and limit the effects of ongoing litigation. On Monday, everything changes in front of Judge Kimball, who will put the suit into stasis, and give at least a 60 day cooling off period to everything.
It might turn into a Chapter 7 filing afterwards, and SCO might be forced to liquidate. This is unlikely, however. In the interim, they'll try to convince a judge or referee that they have IP assets that need protecting, along with their agreements with various companies, and will produce a lot of smoke in their quest to simply survive.
Much attorneys fees will be spent by many companies. Much continued incivility and plain poo will continue to be the hallmark of SCO's perhaps brief existence. Like others, they don't quit until they're just dead. Don't look for much come-uppance. This ends badly, just as it began badly.
---- Teach Peace. It's Cheaper Than War.
'If SCO was dissolved the case against IBM would disappear.'
That would be a bad thing, we don't want the IBM case to disappear, we want IBM have a very strong favorable ruling. Any other outcome means this was all a waste of time with no precedents set.
Even if SCO loses for good, there is Novell. While it's great that Novell will get the rights to Unix, in the meantime, Microsoft has a vested interest with the company. There may be a day when Microsoft will just buy out/absorb Novell, and MS will own the Unix rights. And MS being a company with really deep pockets and ever more resources, may actually pull off lawsuits ala RIAA against any Unix/Linux user. MS funded SCO indirectly to "help" with the lawsuit. It seems that MS knew SCO was going to lose. Thus, a partnership with Novell with a sweet deal it could not refuse was made. MS does not lose here. MS wins either way. I don't believe this is over by a long shot.
"Happily lived Mankind in the peaceful Valley of Ignorance." -- Hendrik Willem Van Loon
They are literally filing for bankruptcy and assuring their customers that they are fine and can rely on them at the same time... AT THE SAME TIME!
That's what Chapter 11 bankruptcy is all about. It allows you to reorganize your business and liabilities so you can stay in business.
FalconShould there be a Law?
By Daniel Lyons, 06.18.03, 12:00 PM ET
[ ... ]
In other words, like many religious folk, the Linux-loving crunchies in the open-source movement are a) convinced of their own righteousness, and b) sure the whole world, including judges, will agree.
They should wake up. SCO may not be very good at making a profit by selling software. But it is very good at getting what it wants from other companies. And it has a tight circle of friends.
[ ... ]
MOD THE CHILD UP!
Cross-post from Groklaw... I did a quick Google of "bad faith" in regards to bankruptcy filings, and there is apparently precident regarding exactly the same situation as SCO is in. Using bankruptcy just as a tool to thwart other litigation is apparently a BIG no-no. From a non-authoritative source: http://touchngo.com/lglcntr/usdc/bnkrptcy/briefs/bnk45.htm "One area ripe for a bad faith dismissal is when the debtor is using a bankruptcy filing as a litigation tactic to either forestall litigation or seek a forum perceived to be more friendly. In Marsch, the court upheld a 'bad faith' dismissal where the chapter 11 petition was filed solely to delay collection of a judgment and avoid posting an appeal bond where the debtor had the financial means to pay the judgment." Also, in addition to dismissing the bankruptcy case, the bankruptcy courts may well impose the "nuclear" sanction - barring SCO from asserting another bankruptcy claim in the future. This would leave them totally exposed to the full wieght of any other judgements, with no way out at all - not even Chapter 7 liquidation. In other words... "you're on your own, Darl..." Is anyone with any expertise in bankruptcy proceedings around to help the community figure out exactly how this works? Something tells me the bankruptcy filing is not going to fly for long, but may expose SCO's legal team to some serious malpractice liability. And... maybe after this little road bump is resolved we'll finally see Kimball bring some real sacnctions down on the SCO side too. This is just getting beyond ridiculous.