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Chapter 11 Trustee Appointed For SCO

Posted by timothy on from the why-not-a-trusty-instead dept.

I Don't Believe in Imaginary Property writes "The judge overseeing the SCO Chapter 11 bankruptcy case has issued an order appointing a chapter 11 trustee to oversee SCO's operations. However, the judge's reasoning is far from clear. While the judge believes that SCO has 'abandoned rehabilitation' to bet its future on litigation, he doesn't think it appropriate to convert their case to Chapter 7 liquidation. So SCO's management hasn't been fired yet, but they're no longer fully in charge either. It's not clear why the bankruptcy judge opted for this solution, when even the US Trustee was pushing to fire SCO's management and convert the case to Chapter 7. In short, SCO is still only mostly dead, rather than all dead, and in desperate search of a miracle worker."

2 of 89 comments (clear)

  1. Maybe to keep 'em from sneaking stuff out the door by Ungrounded+Lightning · · Score: 4, Interesting

    However, the judge's reasoning is far from clear.

    Maybe this is the judge's way of putting a watchdog on 'em to make sure they don't run out the door with or (further) destroy the value of some of the remaining assets before things get settled?

    (Not only am I NAL but I'm especially NA bankruptcy L.)

    --
    Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
  2. It could be beneficial by Anonymous Coward · · Score: 4, Interesting

    The trustee has to investigate SCO's business. The trustee can decide that SCO's whole 'thing' is a fraud and has no chance of success. The trustee can settle all the cases out of court and on the terms that Novell and IBM dictate. That would put a quick end to the whole thing and Darl and company couldn't appeal the decision.

    If SCO's assets were sold in chapter 7, there is a chance that the litigation would go on for years.

    So, chapter 11 with a trustee might be better than chapter 7.