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Darl McBride Leaving SCO?
JoGiles writes "Linux-watch is reporting that while The SCO Group may go on to pursue its plans with a $100 million buyout, it will do so without its longtime CEO Darl McBride. Buried in the proposed MOU (Memorandum of Understanding) between Unix vendor and Linux litigator SCO and SNCP (Stephen Norris & Co. Capital Partners) is the note that "upon the effective date of the Proposed Plan of Reorganization, the existing CEO of the Company, Darl McBride, will resign immediately.""
...is an anagram of Lard
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
Assuming all of this stuff is approved by the bankruptcy courts for starters. I find it amazing how the tech media latches on to what MIGHT happen and not what actually HAS happened. "The SCO Group" didn't get any money yet, but many in the tech media act like they did.
Of course, that quasi-journalistic slut, MOG, projects that McBride's leaving was a goal of the Groklaw audience, when in fact, it never was.
Just because you get modded "insightful" on Slashdot doesn't mean you actually are in real life.
A fairly important distinction, as anyone with Cable or ADSL will know.
I can assure you, when Novell is awarded the money SCOXQ.PK owe them, there will be none there.
Belief is the currency of delusion.
I fear that we're in for a long ride on this one. Back in the Day, we all figured that the SCO lawsuit would be quashed within 6 months. I remember a talk at a LinuxWorld several YEARS ago where Eric Raymond or someone openly challenged them to show us all where the 'infringing code' was. Several years ago...
Lawsuits around the GPL and Linux codebase will become a permanent fixture. Our dreams of a single case to finalize up everything nice and tidy are never going to come true. I have every confidence that Open Source will survive, and the GPL will remain intact, but the lawsuit will always be there-- there's just too much potential money sloshing around, and law schools keep pumping out the evil.
davejenkins.com |
This is not a $100 Million dollar offer. That was hyperbole. There will be a line of credit, but going in there is only a couple of million to take the stock profit and then what they need to pursue the case and pay off interest on existing debt as it is billed. Say $10 Million max. Remember that the Benchmark investment was unwound? This one will probably go through the same thing.
Bruce
Bruce Perens.
Darl McBride will leave a rich man. At least richer than he is now. From my own estimates, he will leave at least US$ 10 - 14 million richer. At 4% interest in a fixed deposit account, Mr McBride can live a pretty decent life even in America's most affluent neighborhoods for virtually no work to be done.
I think Darl was just a front, as Ransom Love was for Caldera. Ralph Yarro was the real boss of both. I guess he's out too (not sure), but IMO the new investor is pursuing the same program, and Microsoft is still behind it.
Bruce Perens.
This plan has a better chance than the York debacle, but IBM and Novell will certainly want to see the money. If Norris Capital Partners has to front the 100 million in escrow this could get interesting.
For Microsoft this has to be like being caught in an endless corporate version of Fatal Attraction. Backing the SCO litigation probably looked good when the Vista release was delayed but now SCO has them by the short curlies. MS has to keep coming up with cash for their demanding paramour. And it's getting harder to design deniable sources for that cash. Hard to say what SCO has on them, maybe they keep threating to go state's evidence on the anti-trust behavior. Maybe MS thinks it's worth a couple hundred million to keep the litigation cloud intact. I'm leaning toward the former. This can't be worth it from a business strategy perspective. It's expensive and it's not working. If anything it's backfiring. It's the kind of advertising that Linux can't normally afford.
It's really hard to tell if this is calculated malfeasance or serial incompetence. With Microsoft it's sometimes hard to tell the difference.
Most definitely this doesn't have anything to do with McBride, other than I'm sure they'll want to keep him quiet. Which means making sure he's happy, which will likely involve a large sum of cash when he leaves.
This whole thing is such a loser. If MS would put that time and money into developing an operating system and other software that provides value to the user, they could forget all this stupidity with SCO. It's tacky, pathetic and...should be...beneath the dignity of a world class company.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Mr. Norris was a co-founder of the Carlyle Group (and ironically the current head of that group is the ex-CEO of IBM ;).
Its all BIG money though...which begs the question - why? I mean does any really believe this up to $100M investment in the walking corpse of SCO is based on the possibility of them doing well business-wise? As many have pointed out its more likely a small fee to ensure that a) the anti-Linux FUD machine keeps operating b) a few scoundrels gets paid off and disappear c) certain skeletons stay firmly ensconced in the closet d) by going private a) and c) are easier to perform out of the eyes of stockholders or the SEC. given the financial weight of the folks behind this its just a tad on the scary side if you ask me.
Going on means going far
Going far means returning
It is not something that companies would normally do, but in this case there are exceptional circumstances.
it's not because their products suck. is because their product is a unix for x86 platform, so it have to compete with "good enough" products that are pretty much free (as both in freedom and beer) like linux, xBSD, solaris x86.
and in the higher end, even on open patforms like sparc, it's tough to beat HP/IBM/Sun.
since the days of old SCO (now tarantella), they always operated on a niche. now this niche disapeared, or was taken by the newcomers. old SCO realized that, got rid of the unix business and wen't on selling applications until they were bought by Sun.
if the new SCO (former caldera) had did the same, using their unix business to finance the development of other kinds of software, phase out the unix business, maybe they wouldn't be in this situation.
What ? Me, worry ?
Nope, not close.
Good will appears on the balance sheet as an asset when a company buys another and pays more than the value of the fixed assets. So if company A buys company B for $100 million and company B has $10 mill worth of equipment (machines, desks, etc) the $10 mil is added to capital and the $90 is credited as goodwill.
It is a real asset as the goodwill can be used to offset profits for tax purposes.
In SCO's case I would have a really hard time believing that the goodwill should still be counted as an asset. SCO has no real ongoing business except litigation. Bankruptcy pretty much destroys any claim they could make for business continuity. So they should probably report the goodwill as a loss.
Looking for an Information Security student project suggestion?
Try http://dotcrimeManifesto.com/
... or does "Memorandum of Understanding" sound like the most boring D&D object ever? "You kill the orc. As he dies, he drops the Memorandum of Understanding, detailing the conflict between you and him and the specifics of its resolution. +2 mediation points."
It is pitch black. You are likely to be eaten by a grue.
Mr. Norris was a co-founder of the Carlyle Group (and ironically the current head of that group is the ex-CEO of IBM ;).
This is nothing but speculation, spy vs. spy, but...
doesn't IBM have a strong interest in SCOg's existence right until the day of the judgement? They invested a lot of time, reputation and money into this defence and may want to harvest a judgement that settles a number of questions once and for all.
They could have saved themselves a lot if they had bought SCO earlier but this would have encouraged other litigators to try forced buyouts on them, and IBM apparently didn't want the allegations to stop but wanted a ruling declaring them false and void.
MS got plenty FUD out of the story but since SCOg lost almost all of its case (if they ever had any) there is no good reason for MS to continue covered funding.
SCO bleeds money just to make sure Novell won't get what they owe them, and approaches death. At the same time threatens to spoil the trial by going bankcrupt.
IBM might want to secretly tunnel some money into the corpse to make sure a zombie SCOg has just enough strength left to take all the beating IBM has prepared for them.
605413? Yes, it's a prime.
There is no dark side, there is only Chucks side and the other side is dead.
I may agree with what you say, but I will defend to the death your right to face the consequences of saying it.
If one takes the "dirty, deep pockets connnection - cost minimization exit strategy" hypothesis seriously, this deal makes a lot of sense - starting with a "separate (extricate) the point man from his crimes" strategy". That way, being "safely away" from the scene of final SCO act or implosion, this may enable some diffusion of hard earned hostility to SCO, muddle and bury evidence, and the (ex)CEO is much less likely to have to rat out the significant others, especially if everything "settles" for a few cents on the dollar and fades away with the normal "defend" clauses to previous bad management. Of course society has been the big economic loser all along here, and the moral justice is a farce on the way to a 3rd world, corporate run tyranny.
The terms on the proposed loan read like the fine print in a credit card agreement. The interest rate starts at LIBOR + 17%. Some of the other fine print says:
"Payments: The Reorganized Debtor shall pay accrued interest on the outstanding principal balance in arrears monthly on the first day of each month commencing on the first day of the month following the Closing Date. The entire unpaid principal balance, together with any accrued interest and other unpaid charges, shall be due on the first day of the month following the expiration of the Loan Term (which date is sometimes referred to as the "Maturity Date")."
"Late Charges Default Interest Rate: Any payment not paid within ten (10) days of its scheduled payment date shall be subject to a late charge equal to the greater of $50.00 or five per cent (5%) of the amount of the delinquent payment. Upon the occurrence of an event of default, the margin used to compute the Effective Rate will automatically increase by an additional four percent per annum from the date thereof until the delinquent payment has been fully paid, both before and after judgment."
It is unlikely that SCO will actually be able to make monthly payments so why all of the penalties and escalating interest on what is probably an uncollectable debt? One possible reason can be found in the motion (346) which SCO filed with the bankruptcy court. There SCO asks the judge to treat the money owed by SCO to SNCP as debt on an equal footing with the debts owed to other creditors. Thus if SCO goes into a Chapter 7 windup then SNCP would get the same % partial pay out as all of the other creditors. If the judge agrees to treat the SNCP money as debt then it is to SNCP's advantage to balloon the amount of the debt as high as possible through missed payment penalties and escalating penalty interest. If the judge turns down the requests to treat the money from SNCP as debt then it doesn't really matter to SNCP whether SCO is missing 1% interest payments or 26% interest payments.
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Steve Stites