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Half of SCO's Accountants Quit
Groklaw Reader writes "Apparently, SCO's lawyers were working overtime last Sunday, because they wrote a quick plea to the bankruptcy court for permission to hire accounting temps. Why? Approximately half of SCO's finance department has resigned or been fired. Two who resigned had over ten years of experience each. One can only assume that they know what's about to happen to SCO."
Good!
Half the accountants? How about some of the lawyers too?
I guess the rats are leaving the ship.
Heck, the accountants probably know that there is no money to pay themselves. So, why work?
"A government is a body of people, usually notably ungoverned." - Shepard Book Quoting Malcolm Reynolds
I think the biggest worry I have now... which may actually be moot- is who ends up with SCO's assets and IP?
Once they hit chapter 7, as the money runs out, the court will dismember them. Hopefully, the assets they do have end up with IBM.
I'm not so sure about Novell's alignment in the open source world yet.
But even better is this:
If one of their accounting people was a CPA- they could be in deep do do if
there are problems found.
I know this, I'm watching a corporation pull the bond out from under a CPA right
now. The liabilities are incredible and the end game is scary.
Maybe an accountant will have damaging information heh?
Another consultant who stuck it out.
"We are the Priests, of the Temples of Syrinx..."
Something I have not seen mentioned yet is whether SCO needs to accrue an estimate of what they should be paying Novell - whether they have the cash or not, it needs to go on the books. Their current balance sheet does not reflect it, which is probably one reason why the company is still grossly overvalued at $4.72M.
SCO sued Novell, IBM, and Anderson Consulting, declaring that SCO owned the intellectual property entitled "Accountant" and that their proposed licensing scheme of $699 per day, per "accountant", had been rebuffed by said companies. Details to follow.
Rhymes that keep their secrets will unfold behind the clouds.There upon the rainbow is the answer to a neverending story
Seriously, what about the other half? Do they have some sort of personal reality distortion field?
The two accountants with the longest experience immediately took a weekend break in Switzerland, to do some skiing (and visiting friends in the banking sector).
For the perfect anti-Unix, write an OS that thinks it knows what you're doing better than you do and let it be wrong.
Darl can totally turn this thing around. Just you watch. It's just another minor setback. They'll be vindicated - just you see. Soon as they get over this small bump, they'll start raking in the cash from all those UNIX licenses that they're going to get from every single Linux user out there. Just as soon as...
Ok, a joke's a joke but I can't type anymore. My fingers started spontaneously bleeding.
Weaselmancer
rediculous.
Groklaw says they started with seven accountants. "Approximately half" is either 3 or 4, and I'd wager that they would have said "more than half" if it were 4. Two of them were the 10-year veterans who resigned, leaving just one guy who was fired.
Well the fact is, the accountants aren't liable for any of SCO's sins.
They would be if any of those sins included some creative accounting, which is certainly a possibility.
The higher the technology, the sharper that two-edged sword.
What's there to account at SCO besides the wages? Do they even still sell something?
I think the biggest worry I have now... which may actually be moot- is who ends up with SCO's assets and IP?
What assets and ip?
FalconShould there be a Law?
In the wake of Enron, etc., accountants are looking over their shoulders whenever they are asked to do something unethical. I am betting that not only are the accountants seeing that they might not be paid on time or at all, but they are also seeing that they are being called upon to do something unethical, something that would be a blight on their careers.
You can bet that these accountants were not working for SCO because they loved Daryl. So late or non-existent pay + ethical lapses = hasta la vista, baby.
In my experience, when the accountants pack up their stuff, then you should trample them on the way out, cause you are likely not going to get paid for that month - Better to start your job search early than wait for the bouncing salary cheque...
Excuse me, but please get off my Pennisetum Clandestinum, eh!
I just happened to pick up other traits geeks don't seem to have.
Sanctimoniousness, for one.
-- Alastair
They will probably be trying for two things:
- SCO's attempt at chapter 11 gets rejected on the grounds of bad faith. groklaw post
- Even if they don't get chapter 11 pitched, they want the trial in Utah un-stayed.
Given SCO's record, it seems likely that Novell will succeed. Given a checklist for bad faith in bankruptcy, SCO meets most of the criteria.It seems to me that SCO's bankruptcy petition is a bit of a Hail Mary pass attempt. I'm not sure what else they were supposed to do though. Their goose has been cooked for quite a while and they have been doing a masterful job of putting off the final resolution as long as possible.
as proven by the court and who the hell wants a bunch of 2nd hand SCO servers?
Excuse me, but please get off my Pennisetum Clandestinum, eh!
No, I'm simply saying that while sure, in a perfect world where everyone is lawful good and all is sunshine and bunnies, it might be reasonable to expect the victim to be better than the aggressor, to show mercy even when they know none would have been shown them.
But here, in this world, it is far more likely that the many enemies SCO has made for itself will be lining up to tear bits out of them in any way they can, and while I personally take no joy in the fight now that it's over, I'm not going to start throwing moral judgments at the victors when they start doing as victors will.
It's just the way of the world.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Anybody who invests in a company without doing some basic research (I'm not talking hard stuff here, just the first page of google results) is asking to lose their investment.
And SCO is a penny stock at this point, nobody who is sane and worried about their life savings invests in those.
Remember, the correct response is not "Gee, I bet that's a nice ship now that all the rats have left".
--Joe
Who counted them?
... not all accountants are rats.
Yes, we understand these tags always apply: fud, dupe, typo, slashdotted, topic name
SCOX had seven people in the accounting department. 3 were terminated or resigned. SCOx's problems are obvious enough not to blow this all out of reason and make it sound like a thundering cavalcade ran for the door. The truth about SCOx and Darl is quite bad enough without inflating the facts. That's a SCOx tactic, and one we need not indulge in since SCOx does it so well.
Not that I am a SCOx supporter. Far from it. I think Novel should go after Darl in his own natural person to recover court costs. And if Darl dies while I'm still able to get around, count on it that I'll fly to his grave site to relieve myself on it. Twice. If it's worth doing, it's worth doing well.
A more damming metric would be to quote how many engineers SCO had on staff, vs. how many SCOx retained. Answer: Not many! SCOx has allowed their product to lag behind hardware to the point that the OS is irrelevant on modern hardware. It simply doesn't work on the new stuff, and doesn't support many current technologies. That's a death knell for any OS.
SCOx concentrated on a niche market, and they didn't pick it any too carefully. That SCOx finds themselves bypassed and disfavored is a mark of just how badly they chose to grow. It's never pretty when a technology company chooses to become a litigation company, it's even worse when they choose the wrong technology to litigate against.
Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.
Let's say you work for a business that used creative accounting and it's going down in a month or so, are you (an accountant) going to wait till the news breaks and then look for another accounting job or are you going to go out and get a job using your current reputation before the public learns the facts.
Not sure if this is the case but even if the accountants had nothing at all to do with it, they'd be Mudd by association of any bad accounting news came out of this.
"Enjoy what you're doing! If it becomes drudgery, you're doing it wrong!" - Jim Butterfield
Maybe this image that I saw on Groklaw will be an indication of things to come....
http://www.yourfilehost.com/media.php?cat=image&file=Darl.jpg
Banjo - The more I know about Windoze, the more I love *nix
I guess a company can still be listed on NASDAQ even though it's bankrupt!
Years ago I worked for a law firm that specialised in things like mergers and acquisitions. They also did a lot of bankruptcy work.
One of their clients was a large company that was mired in Chapter 11 proceedings and was, from the perspective of the general public, doomed to extinction. The attorneys came up with a plan for the company to raise money (and expand their business) by issuing new stock which, unsurprisingly, sounds as bizarre as it is illegal. A few months later (and many letters back and forth from the SEC), the company did just that. They ended up raising just under $40 million, and the law firm earned not only their own extravant fees, but bonuses for arranging that deal and the ones that followed.
The company no longer exists today, but if there's any lesson to be learned from this, it's that the subjects of law and finance are more complex than what you read in the newspapers. If there's money to be made, you can be sure someone will be walking away with some of it, even in SCO's case.
Rampant carbon sequestration destroyed the Dinosaurs' tropical paradise. I'm here to help repair the damage.
There is no legal downside to owing the stock, but getting it in the form of certificates would cost more than the 22 cents each share is worth. Normally, shareholders leave the shares on deposit with a broker. A year or two ago someone on the Yahoo board itemized the cost of having stock certificates issued, and I seem to remember it being something like $40/certificate. If you had 100 shares, you would normally receive one certificate for the shares, although you could request multiple certificates for a total of the 100 shares.
These shares are not worth the paper they are printed on.
When a company goes into bankruptcy, the ticker symbol has a "Q" added at the end. So "SCOX" will change to "SCOXQ" shortly, probably on Wednesday.
They only ever had three accountants, but they all counted each other twice*
*I know it doesn't add up. That's accountancy.
First, the "millions" that Darl was paid were bonuses for good performance - but it turns out that the money they counted didn't actually belong to SCOX, so it wasn't profit... meaning that the bankruptcy trustee will ask for it back.
Second, as the money is part of the converted funds (ie., it belongs to Novell) the bankruptcy court can (and probably will) order Darl to turn it over. (If you rob a bank, then give the money to someone else, do they get to keep it?)
There is a very real possibility that Darl and Kevin will be personally on the hook for money owed to Novell.
Back in the day, my accounting 410 prof told us that it is a common tactic in troubled financial times to fire your accountants, and then have your lawyer hire them back. That way, management's interactions with them become privileged communication, and not admissible in court. Perhaps the Country Lawyer could weigh in on this.
I was taught to respect my elders. The trouble is, it's getting harder and harder to find some.
'm living in Texas at the moment, and I'm quite glad that a significant number of my fellow homeowners are well-armed (and that local laws -- and juries -- are generally conducive to defensive use of deadly force).
Ah yes, Texas. What's the bag limit on trick-or-treaters this year?
"While we're waiting, help yourself to some more stock options"
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
If you steal a car and then go bankrupt, your creditors can't fight over who gets the car: it's not yours, so it's not an asset in bankruptcy, and it goes to whoever holds title. Same here.
ian
A very smart accountant I knew once deliberately left a good job in a successful company to go and work for a company that was in the UK equivalent of Chapter 11 (voluntary arrangement with creditors.) He reckoned that the experience would accelerate his career. How many companies do you think get into trouble every year? How much of a premium do you think they are prepared to pay to accountants who know how to deal with that stuff? When the shit is really deep, that's when you are prepared to pay a lot of money to the guy with big rubber boots and a large pump.
Pining for the fjords
The best bet here is that the Novell monies (per the court judgement, this is money belonging to Novell and illegally "converted" [i.e., stolen] by SCO) are not subject to the bankruptcy process; instead, Novell gets to recover that amount before the Chapter 11 reorganization. It seems logical for the bankruptcy judge to either allow the Utah court to establish the amount of that judgement, or simply declare "It all belongs to Novell," before proceeding with a reorganization, given that the Novell judgement is what tips SCO into the bin.
So, my $.02 is on Novell being unconditionally awarded the judgement in the amount determined Real Soon Now by one of the two courts ahead of the Chapter 11 process, and there being nothing left for SCO and its other creditors but scorchmarks.
"My strength is as the strength of ten men, for I am wired to the eyeballs on espresso."
Basic business or accounting classes will teach you that accountants are only liable if they are cooking the books on their own volition, rather than on the instruction of their superiors. This is why many accountants keep a separate and private ledger - that way if something like this hits the fan they have a record of, "This is what it should have been, but when I told so-and-so, they told me to do it this other way."
And in that situation, the CPA is actually fine; it's the corporate execs who decide to fudge it or 'ignore problems' who are in trouble. That is what happened with Enron - the accountants knew the problems, but were instructed to obfuscate it. I suspect, given that the accountants were alternately 'fired' or 'resigning' that some accountant hit a legal wall, wouldn't go any further, was fired, and the rest knew that was the straw that broke the camels back and took off. Given the severe risk an accountant carries by being a CPA, and their significantly lessened protection (compared to an exec), I doubt many would actually put their neck out that far for a company unless they were already somehow complicit.
[Ego]out
Whatever ledger to think that?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."