SCO Proposes Sale of Assets To Continue Litigation

gzipped_tar sends in this excerpt from the Salt Lake Tribune: "The embattled SCO Group Inc. is proposing to auction off its core products and use proceeds to continue its controversial lawsuits over the alleged violations of its copyrights in Linux open-source software. The Lindon company has filed a new reorganization plan with the federal court in Delaware where it sought bankruptcy protection from creditors after an adverse ruling in the Linux litigation. If approved by a bankruptcy judge, the plan could mean SCO's server software and mobile products lines are owned by other parties while SCO itself remained largely to pursue the lawsuits under the leadership of CEO Darl McBride. 'One goal of this approach is to separate the legal defence of its intellectual property from its core product business,' McBride said in a letter to customers, partners and shareholders. Jeff Hunsaker, president and COO of The SCO Group, said the litigation had been distracting to the company's efforts to market its products. 'We believe there's value in these assets and in order for the business to move forward it's imperative we separate it from our legal claims and we allow our products business to move forward,' he said Friday."

Comments

what core product business ?

[rs232]

'One goal of this approach is to separate the legal defence of its intellectual property from its core product business'

Then why not drop the case and focus more fully on your 'core product business'

No SNCP, no Arab sheik

[symbolset]

They want to pay Novell in worthless stock.

And the directors will get their pay in worthless options going forward.

It's amazing how long this zombie company can stay on its feet.

Is groklaw aware of this new development?

[plasmacutter]

The recent story of their cessation to "compile" the history of the case seems a bit premature now.

That said, I'm beginning to wonder if Darl is playing "weekend at bernies" with the board of directors, because no sane board would authorize the liquidation of the bulk of a company's assets so an obsessed executive can go tilting at windmills.

Re:Is groklaw aware of this new development?

[RichMan]

> because no sane board would authorize the liquidation of the bulk of a company's assets so an obsessed executive can go tilting at windmills

The decision was made by Ralph J. Yarro III back in 2003 to tilt at the windmill. Darl was hired to lead the charge. Back at the beginning Darl said SCO would pursue this to their "utter destruction" if need be. Well it looks like they are.

History: SCO, then called Caldera, was Novell's proxy in the DRDOS lawsuit against Microsoft. This lead Yarro, then managing the Canopy investment company that effectively had full control of SCO/Caldera to look for new lawsuit opportunities to cash in on. The decided to attack Linux using their "UNIX IP". To bad there is no UNIX IP in Linux.

The court system that allows civil cases of this nature is really to blame for the whole thing. SCO's lawyers are now heavily "invested" in the case (at one point they were literally going to be investors in SCO, but then changed their minds to cash up front) and are not really working for justice, but for their piece of the litigation reward pie.

Re:Is groklaw aware of this new development?

[kimvette]

Uh, they're still referring to UNIX IP being property of SCO?

Just how is this possible? It's well-known that Novell owns UNIX IP (maybe not the trademark, but the copyrights, etc. to the code) and as the owner of Unix IP, Novell obviously has no objection to Unix's affecting Linux, since Novell is distributing Linux pretty aggressively.

On top of that, even if there were Unix code, or even SCO-authoried UNIX code in the Linux kernel, SCO themselves distributed that same code under the GPL releases as Caldera Linux, and later on, SCO Linux.

Want to know the saddest part of this?

Prior to Darl's influence, Caldera was a great company. They were founded by former Novell folk who were avid supporters of Open Source. Not free as in beer, but free as in speech, where if you buy a product, you not only get the binaries, but the source so you can fix bugs in the event that the product ceases to be available. They brought DR Dos back to life (and sued Microsoft in the process for their anti-competitive tactics).

They introduced Caldera Linux, which was a bit ahead of its time. Online repositories accessible through a decent GUI, network management through a usable GUI, and a somewhat polished (for the time) desktop environment, all as open source. The "open" nature of it was touted heavily on it, and although it wasn't my primary OS at the time (I had to work a LOT of hours from home on Windows projects so I dumped Linux for a few years, unfortunately) I liked it a lot.

Caldera was very open and very pro-open source. The founders saw the vision and potential of open standards. I don't know exactly what prompted the change which brought that shark Darl in, but Caldera was very focused on poising themselves for the open source revolution and the potential for "value-added" services, using the "free/free" aspect to gain market penetration.

Keep in mind what Caldera was doing then is what Novell and Canonical are doing now, and it's somewhat ironic that SCO (formerly Caldera) was founded by ex-Novell employees who shared the same vision that Novell has FINALLY embraced in recent years.

Kinda refreshing, actually...

[RicardoGCE]

They're finally owning up to what we've known all along: SCO's business is litigation. Server software? Pffft.

I love the fact that they're willing to sell the very products they're supposedly protecting from unauthorized use of "their" code, just to keep the legal fight going.

What products?

[Jailbrekr]

What company would want to adopt or standardize on a product developed by a company that is, for all intents and purposes, dead? Everyone has moved on, be it server side apps or embedded, there are ample companies that have a superior product with a healthy roadmap and no indication that they will not be around in 5 years.

Re:Wow. Just wow.

[Sponge Bath]

In a just world, he will die a homeless drug user on the streets.

Darl does not deserve drugs. How about him dieing a homeless, disease ridden prostitute?
Then the only change necessary is creditors seizing his home.

In other words, play hide the assets

[Trekologer]

It sounds like they're going to sell their assets off to someone else, leaving SCO as just a shell from which to continue the lawsuits and hide away the assets from future claims against them.

Re:Wow. Just wow.

[sumdumass]

If you buy into the entire Microsoft paid them to spread FUD about Linux conspiracy, this actually plays directly into it. Vista wasn't the prize puppy MS was wanting it to be. With the economy going down and all of Vista's happiness, companies and people are looking at the FOSS routes a little more. What better way to battle that and ensure MS had a viable product until the economy recovers and windows 7 is making money then to re-raise the Linux is illegal battle.

Or in other words, nothing is wrong with him that wasn't already wrong with him. He is just needed one more time. I suspect MS or some affiliate of MS is more then willing to buy off the assets.

This all makes sense if you don't look at him as the CEO of SCO but the employee of a dieing company who is looking to the future.

Government Bailout for SCO

[dustwun]

I'm actually a little shocked that they haven't requested government financial assistance. It seems to be all the rage for companies with poor products, insane leadership, and failing business models.

mod this flamebait if you want, it's still true.

McUnix

[capnkr]

SCO has a market cap of just over $3 million. IIRC, McDonald's Corp is one of their major customers. That $3mil is pocket change for the $66.95 billion market cap McD's Corp.

What if McDonald's buys SCO? McD's could hire a couple devs (since that is all SCO needs, apparently..) for maintenance and some support personnel, then service their own stores as well as other existing customers. Maybe they'd wind up saving, if not making, some money in a few years. Perhaps give Darl a store to manage...

Heh. :)

Point being, with a market cap of only $3mil, SCO and anything they have/own are basically chump change for a real corporation. So, if the judges (have) let this happen, then, and I hate to even think of it, we'll see this zombie keep stumbling forward...

Re:Wow. Just wow.

[iNaya]

Why not? Death is the natural state for an organism that is no longer functioning correctly. And it would appear that Darl certainly fits within that category.

Re:Wow. Just wow.

[MooUK]

RIAA lawyers don't deserve death. They deserve a long and very painful and unpleasant life instead.

You've got to understand what Darl is doing

[EmbeddedJanitor]

SCO's lawyers include Darl's brother, Kevin. Turning SCO's assets into legal fees gets the money out of the company and into the family. At present SCO is dead in the water like a floating wreck. It still has some value on board. This strategy converts some of that into cash which can be trans-shipped into the family as legal fees.

Re:Wow. Just wow.

[Faluzeer]

snip...I hope the bankruptcy judge finds him PERSONALLY LIABLE and sentences him to jail for THEFT.snip...

Hmmm

As stated, I want Darl (& the Sco Group) punished to the maximum extent possible under the law. Darl & Co need to be seen to be punished in such a way that it that acts a deterrent to prevent others from pursuing similar frivolous claims in the future.

I want Darl & Co. punished for all their lies, I want the Sco Group punished for trying to game the legal system, I want the Sco Group punished for every time they ignored Court Orders, I want their assets seized to pay off creditors, I want the law firms to have to disgorge all funds received from tScoGroup after they entered chapter 11 to help pay off creditors, I want the SEC to investigate tScoGroup and the statements that were made to the court that appear to be different / contradict statements that were made to the SEC...

Executive summary, I want justice to be done and to be seen to done. Dying a horrendous death is not justice (not even poetic justice), and it is certainly not deserved for what tScoGroup actually did...

Professional guild

[mcrbids]

The law is unjustly lenient in cases like this precisely because it is being abused by lawyers, and most laws are written by lawyers. I don't know anyone else who could write them, but it creates an inherent bias in favor of those acts that lawyers perform and others don't. And in favor of those acts that people who hire lawyers perform and others don't.

Lawyers will tend to work with other lawyers because they are both... lawyers. They are part of a guild, a professional brotherhood, united by common experience and training. Whether this is a bad thing is a matter of opinion, but it's a reality shared among lawyers, and any other professional group.

Think about it; when you start talking about firewalls, routing tables, and process management, are you going to consider the input of somebody who is clueless about such things over somebody who knows the difference between a default deny firewall and a NAT firewall?

And to every non-techie person who has to try to work with you, aren't you going to seem a bit, eh, elitist when you pay close attention to an arsehole who is speaking intelligently while ignoring the non-techies, who use words like "series of tubes" to describe technical details?

This isn't an issue with lawyers, it's an issue with all of mankind. Doctors listen to other doctors and ignore "lay folk". So do IT/techies, contractors, politicians, lawyers, accountants, mechanics, engineers, architects, scientists, and pilots. A techie thinks the technically insecure doctor is an idiot for not installing an anti-virus or doing backups. The doctor thinks an unhealthy techie is an idiot for not losing weight and quitting smoking.

Welcome to life, folks. You cast the shadow you leave behind. It's OK - it's just humanity, each making judgments according to their own experience!