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SCO Goes Private With $100 Million Backing
AmIAnAi writes "Just when you thought it was all over, the SCO story takes a new twist. SCO has received $100 million financing from Stephen Norris Capital Partners to get them out of Chapter 11 and go private 'The move gives Stephen Norris, whose namesake founder was a co-founder of private equity giant The Carlyle Group, a controlling interest in SCO, which now has a platform to continue its court battle with Novell Inc. over royalties from the Unix server operating system, SCO's main business ... According to a statement from the company, SNCP already has a business plan for SCO that includes pursuing its legal claims.'"
... the Stephen Norris group. When do the judges get sick of barratry?
Dog is my co-pilot.
Man oh man...
This news completely ruins my day.
I just know that tonight while my lady is receiving the annual ~Valentine Fisting~ my mind will be on SCO and their ridiculous lawsuits, not on the work at hand. She'll know something is bugging me, get pissed off and make me stop. I'll have KY to my elbows for nothing.
Thanks SCO.
Trolling is a art,
What kind of genius investment group thinks sueing IBM is a winning proposition?
Step 1. Pile money onto a sinking ship
Step 2. ???
Step 3. Profit!
I have a very poor financial outlook for the near future, why can't somebody give me $100 million? Hell, I'll use that to make legal claims about somebody else's IP! I can probably even develop an operating system nobody in their right mind would use.
Oh, a lesson in history from Mr. I'm my own grandpa.
Bruce
Bruce Perens.
When I mis-read it, I thought: "Chuck Norris can make SCO viable!".
I'm glad it's just *Stephen* Norris.
Lets take inventory.
* Taking a beating in court.
* Its only valid business is a dying operating system.
* Your customers and pretty the entire tech industry hates you.
* The company is in chapter 11.
* The company has a negative cash flow.
* The judge in your case appears to hate you because of your court practices.
* I hate you.
Yeah, lets throw $100 million at them...
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Thanks to spacelifeform on GL:
http://www.iht.com/articles/2007/02/12/bloomberg/bxfour.php
NEW YORK: Four Seasons Hotels, the manager of 74 luxury hotels, said Monday that it had agreed to be taken private by Bill Gates, Prince Alwaleed bin Talal and the chief executive for $3.8 billion, including debt.
Coincedence?
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Who is Stephen Norris,
http://www.snpartners.com/norris.html
Looks like there could very easily be some behind the curtain financing of this through foreign nationals.
---
Mr. Norris acted as a principal financial advisor to Prince Al-Waleed bin Talal Al Saud of Kingdom Holding Company, in structuring and negotiating the re-capitalization of Citibank, which returned over $15 billion in profits on about $590 million of equity invested. He also advised or played a key role in other Kingdom Holding Company investments. He was appointed by former president George H.W. Bush and confirmed by the U.S. Senate to serve as one of five governing members of the $100 billion Federal Retirement System Thrift Investment Board.
Since 1997, Mr. Norris, and certain members of his team, have worked on a number of investments including real estate investments in Europe and the United States. They were involved in amongst others the privatization of Thompson CSF, the recapitalization of Suez, the acquisition of portions of Credit Foncier's real estate portfolio in Paris by the German firm of IVG, the formation of Nomura's (London) bid for a Dutch mortgage bank, the offer by a major Saudia Arabian investment firm for Lamborgini in Italy, and the formation of a bid by Leucadia International's for the Labouchere Bank in Holland. He also negotiated and structured investments in Synxis Corporation, which was backed by George Soros and Mr. Norris, and MARC Global Holdings.
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Oh good, looks like Novell and IBM can acually get some money out of SCO now.
Victory or awesome!
Certiainly doesn't look like a winning product portfolio, well not in their hands at least.
I'm sick of following my dreams. I'm just going to ask where they're goin' and hook up with 'em later.
Novell is now assured of getting every penny they've got coming to them.
Disinfect the GNU General Public Virus!
When looking at companies, the products are important but only as indicators as to the people behind them. When Amazon was losing money hand over fist, its shares were still sky-high because people believed that Jeff Bezos and his team were a good bet. I can't imagine how anyone could feel that, after everything, SCO could possibly have assembled a $100M team. I don't know how to say this without offending the dozens of people left at SCO, but you'd have to have some form of brain damage, or be really, really desperate for gainful employment to still work there.
E pluribus unum
"The Big Guys Work For The Carlyle Group
What exactly does it do?
To find out, we peeked down the rabbit hole.
FORTUNE Monday, March 18, 2002
The Carlyle Group, a Washington, D.C., buyout firm, is one of the nation's largest defense contractors. It has billions of dollars at its disposal and employs a few important people. Maybe you've heard of them: former Secretary of State Jim Baker, former Secretary of Defense Frank Carlucci, and former White House budget director Dick Darman. Wait, we're just getting warmed up. William Kennard, who recently headed the FCC, and Arthur Levitt, who just left the SEC, also work for Carlyle. As do former British Prime Minister John Major and former Philippines President Fidel Ramos. Let's see, are we forgetting anyone? Oh, right, former President George Herbert Walker Bush is on the payroll too..."
http://www.carlylegroup.net/thebigguys.htm
So now the Bushes are going to send Jim Baker to court to steal Linux.
"Hahahaha. Maybe this is the key? That's code, I think, for 'this will enable the company to continue to attack Linux'."
http://www.groklaw.net/article.php?story=20080214125705140
Can't believe they forgot the Groklaw link!
Its like some really bad slasher flick where the bad guy just..... won't.... fucking.... die...., and the audience gets tired of all the inventive ways in which they are bought back to life....
After a nuclear holocost the only thing left will be cockroaches, twinkies and SCO. If you chop off the heads of SCO lawyers they continue to live for a week. Just when you think they're dead those tiny little litigating arms start moving again.
He'll just roundhouse kick them until they sue themselves.
Step into a huge movement. Don't Tread In Me.
Stupidity cannot adequately explain this move, which leaves...
Simple Unexpected Concrete Credible Emotional Stories
Hire your brother (Kevin McBride) as a lawer and pay him a pile of legal fees (thereby getting the money out of the sinking ship and back onto dry land, but out of reach of the investors).
Engineering is the art of compromise.
I don't know. I was talking to someone whose spouse still worked there. We mentioned the lawsuit (peripherally, not really wanting to bring it up since I figured it would be a sore subject).
They started talking about how IBM and Novel stole a whole bunch of their Intellectual Property and put it into Linux, and how Linux is nothing but a bunch a thieves.
I just sat there biting my tongue and changed the subject quickly, but it was really odd talking to someone "on the other side of the fence" who was a developer, and not in management.
SCO is proposing to go private.
Right now they can't buy paperclips without Judge Gross's permission (ok, I'm exaggerating, but only a little).
The US Trustee, Novell and IBM are all going to over the plan with a fine-tooth comb and the judge isn't going to approve it just on SCO's say-so. This could be like the York deal that SCO tried to push though last year, all smoke and mirrors.
So don't go getting your shorts in a bunch just yet.
Watching the shenanigans of SCO has turned into the geek equivalent of Dallas for geeks.
This week on SCO
Novel "oh my god!, Im sure I killed him"
SCO "Im baaaaack and I have 100 million dollars"
Red Hat "what crack monkey gave him money ?"
> SCO has received $100 million financing
SCO has received nothing except offer (which is probably contingent on many conditions). They cannot accept it without permission of the bankruptcy court. To read some actual facts go to Groklaw.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
And you can't do a deal like this without authorization from the Bankruptcy Court. This will probably all be part of a Chapter 11 plan of reorganization the details of which have yet to be filed by SCO. The devil is in the details with these things and you can be sure SCO will be out to screw all general unsecured creditors; that's pretty much par for the course in all Chapter 11 plans. Also, expect a lot of Bankruptcy Court litigation over the status of Novell's claim, i.e. SCO will attempt to lump them in with the other general unsecured creditors and Novell will assert its trust theory. At any rate the post petition funding here will not be available to SCO's pre-petition creditors, including Novell. All those claims are dealt with in the CH 11 Plan and are discharged by the approval of the Plan.
When I read such statements, I seriously consider stopping reading
A life of yatches, women, Lamborghinis, women, gulfstream jets, women, casinos and women is already hard enough without seeing such kind of king.
Your ad could be here!
None of SCO's claims in any of their lawsuits involve patents.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
This is not capitalism at work, it's predatory behavior and something anti-trust lawyers should sink their teeth into. There is no reasonable expectation of return on SCO's "business" because SCO is full of shit and every decision has been against them. This is just another $100 million that M$ does not mind pissing away. The "investment" harms the reputation of all involved.
I'm so poor, I've never even heard of yatches!
There are places where the networks are not touching,and there are places where they are-Boeing's Lori Gunter
maybe they want a tax credit for donating to a non-profit organization
Nobody running a successful LBO firm is stupid enough to make this ridiculous lawsuit the central part of an execution plan.
The Statements in the release are quite lawyerly indeed. The funding is in place, IN PART, to "see SCO's legal claims through to their full conclusion". PJ interprets this to mean "continue to attack Linux", and indeed the deal suggests that is something these investors would like to see returns from: the vast majority of this $100M is not hard cash to be handed over in one lump sum loan, it is a "line of credit" to fund continued operations and part of financing this line of credit would be, IIRC, 17% of any monetary judgments in SCO's favour.
However, I cannot believe that the smart people behind SNCP sincerely think they have a good chance of actually WINNING the lawsuit. I think it's more of a "lottery ticket"--lawyers make sure their butts are covered, and that they'll be able to screw ove...errr I mean "receive compensation" under all circumstances. "Continue to pursue" litigation "to their full conclusion" could very well be code words for "finally put it to rest". They apparently have a plan that includes the legal stuff but haven't released details (and taking SCO private would mean they don't ever have to do so). That plan very likely incorporates (or entirely consists of) a contingency plan. It looks pretty bleak to reverse the decision on copyright ownership, but they can appeal a judgment on royalties owed to Novell and get out of paying tens of millions. The same goes for any counter-suits from the likes of IBM or Red Hat. SNCP may think they have the ability to get SCO out of hot water without paying out as much (or any) money.
In short, their legal strategy might (wisely) be a defensive strategy to cut their losses and move on. To paraphrase that cute song "if I had a (hundred) million dollars", well, I'd "buy me a SCO" too actually, and that would almost be my legal plan, though I'd be more apt to not put too much effort in "cut the losses" and settle out of court. If I was some LBO billionaire dude I'd buy SCO, and when judgment came I'd say "here's your money Novell", and subsequently settle all other disputes quickly. Then I'd promptly GPL UNIXWare and OpenServer and use what's left of the technical people to refocus SCO as a "solutions provider" to target the thousands of SCO users around the world with UNIXWare/OpenServer-to-Linux migration plans. Anything of redeeming value in the newly-GPLed legacy OS products would then be incorporated into a "LinuxWare" distribution tailored to be as close as possible to a drop-in replacement for existing SCO customers.
The background of SNCP and their "middle eastern partners" really make me uncomfortable though. Those stated partners include the Saudi prince who is Bill Gates' investment partner in the Four Seasons hotel chain. These are legally-savvy business tycoons. I cannot see them taking the "Mark Shuttleworth act of benevolency" approach that I'd take. They are no doubt acting with convincing insider knowledge. I think that there might be a few motivators for this investment:
* They might have a convincing legal argument to overturn some of the judgements against them--for example they might be able to retain copyright to at least portions of UNIX, and that would at least allow the IBM lawsuit to move forward and keep the FUD coming for Microsoft.
* They are trying to stem customer migrations to Linux. I have no doubt that even if Microsoft isn't tied to this deal that BillG *is* in some capacity, and he obviously has the betterment of Microsoft in his self interest. The business plan outside the legal battle may be in fact to steer SCO customers towards Microsoft solutions, and perhaps to eventually have MSFT absorb SCO entirely. If you combine that with the first point, that would mean MSFT could end up with some UNIX copyright ownership--a great piece of IP to leverage if you wished to embrace, extend and extinguish *real* UNIX operating systems of all kinds (like
This doesn't do that much for SCO. It gives Novell, IBM and Red Hat cash to go after. Remember, there are substantial legal claims against SCO, and those claims are on much stronger grounds than SCO's claims against anybody.
SCO is headed for their day in court:
U.S. District Court - District of Utah - Court Calendar
Honorable Dale A. Kimball
Tuesday, 04/29/2008
08:30 am: SCO Grp v. Novell Inc (2:04-cv-00139-DAK-BCW) Bench Trial
The only question in that trial is how much money SCO owes Novell. SCO will appeal, but they are unlikely to win.