Authored by: Anonymous on Friday, September 14 2007 @ 03:33 PM EDT

Sad for the poor folk who used to make a decennt living from a reasonable outfit

until the gamblers jumped in anyway. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:33 PM EDT

Bet they will try to stall the trial. Try to come up with a "reasonable

number" to force Novell to except. This may not work and next step will

be liquidation. [ Reply to This | # ]



Authored by: sumzero on Friday, September 14 2007 @ 03:33 PM EDT

this text is not here.



sum.zero



---

48. The best book on programming for the layman is "alice in wonderland"; but

that's because it's the best book on anything for the layman.



alan j perlis [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:34 PM EDT

What does this mean for the upcoming trial on Monday?



As I understand it, this causes an immediate halt to these proceedings, is this

true?



How is this handled, I am very interested in how these things are handled by the

court system. [ Reply to This | # ]



Authored by: zenofjazz on Friday, September 14 2007 @ 03:35 PM EDT

Party Party Party.. where are those dancing shoes... schedule the man to build

the dance floor on their grave!



---

http://www.AllThatsEvil.net/ [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:35 PM EDT

how does scox manage to get an increase in their stock price every time there's

bad news? seems like someone's doing something illegal [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:36 PM EDT

I guess Novell, IBM et al are now "unsecured creditors"?!?!

[ Reply to This | # ]



Authored by: interele on Friday, September 14 2007 @ 03:36 PM EDT

Can someone explain to a Brit what this means

Is it a fiddle to get out of paying Novell

or to get out of going to court next week ?



Does it mean that they are so sure that they will loose in court that they are

technically bankrupt



ta



mal [ Reply to This | # ]



Authored by: red floyd on Friday, September 14 2007 @ 03:37 PM EDT

With the correction in the title,



Since everyone else was too busy celebrating :)



---

I am not merely a "consumer" or a "taxpayer". I am a *CITIZEN* of the United

States of America.

[ Reply to This | # ]



Authored by: DebianUser on Friday, September 14 2007 @ 03:38 PM EDT

From the announcement of bankruptcy:



"SCO owns the core UNIX operating system." [ Reply to This | # ]



Authored by: feldegast on Friday, September 14 2007 @ 03:38 PM EDT

Please make links clickable.



---

IANAL

My posts are ©2004-2007 and released under the Creative Commons License

Attribution-Noncommercial 2.0

P.J. has permission for commercial use. [ Reply to This | # ]



Authored by: red floyd on Friday, September 14 2007 @ 03:40 PM EDT

Will a Chapter 11 BK draw the attention of the SEC?





---

I am not merely a "consumer" or a "taxpayer". I am a *CITIZEN* of the United

States of America.

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:41 PM EDT

I think we can expect SCOG to file with the court a motion to stay the trial till the whole bankruptcy issue is dealt with. At least, based on my IANAL opinion and past SCOG behavior. RAS [ Reply to This | # ]



Authored by: Tim Ransom on Friday, September 14 2007 @ 03:43 PM EDT

Is there *anywhere* that the tentacles of the Free Software Journalism Club

don't reach?!!!



---

Thanks again,

[ Reply to This | # ]



Authored by: Latesigner on Friday, September 14 2007 @ 03:43 PM EDT

It was only a matter of time till this happened but SCO's "books"

should make interesting reading.



---

The only way to have an "ownership" society is to make slaves of the rest of us. [ Reply to This | # ]



Cayman Islands ? - Authored by: JamesK on Friday, September 14 2007 @ 06:28 PM EDT

Authored by: rickdallas on Friday, September 14 2007 @ 03:44 PM EDT

I have a number of questions, all of which may be completely off-base. For the

bankruptcy filing, doesn't SCOG have to file a list of assets and liabilities?

If they don't list their liability to Novell in the filings, would a

post-bankruptcy judgment in favor of Novell take precedence over pre-filing

liabilities? Can the filings be additional last-minute evidence in the trial?

Will the trial be postponed?



Just initial wonderings. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:44 PM EDT

If you find a hidden asset of SCO's (or their fearless , witless leader ) dont

keep it a secret.

Post it! [ Reply to This | # ]



Authored by: dlharper on Friday, September 14 2007 @ 03:46 PM EDT

Ok, so what if they aren't really BK yet? It strikes me that they still have

money, up until the Judge rules otherwise. Without that, wouldn't they still

have like 10 million or something hanging around? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:46 PM EDT

Do the Novell lawyers show up with an application for a constructive trust,

while SCO's lawyers show up with a motion to stay the trial.



I would bet Kimball goes with Novell on this one. Novell can just bring up all

of SCO's arguments from back in the winter and check them off. [ Reply to This | # ]



Authored by: Nick_UK on Friday, September 14 2007 @ 03:48 PM EDT

I personally would have called this last chapter 'The End', but I guess law and

writing fairy stories are slightly different - or ARE they?



Nick ;-) [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:53 PM EDT

So SCO goes out not with a bang, but with a whimper.



I fear this means nothing ever gets settled. In addition pending court cases get

postponed, probably never to be renewed. And then there is a long drawn-out

fight to determine the bankruptcy trustee. What a come down.

IANAL. [ Reply to This | # ]



Authored by: Jude on Friday, September 14 2007 @ 03:54 PM EDT

The last trade looks like it happened several hours ago. Does trading

automatically get halted when the company files for bankruptcy?

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:56 PM EDT

Did anyone notice the sharp (by percentages) decline in SCOX stock this morning,

before the announcement was made?



Looks a little unusual to me, given the pattern of the last several days... [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:56 PM EDT

Wow. Never saw this coming. :-)



Seriously, I have a friend of mine who specializes in turning around bankrupt

companies. I'm sure that there is nothing about this case he hasn't seen

before, including the visibility. I remember one story about a regional

pharmacy chain where the flamboyant CEO spent all kind of company money

doing things you'd rather not want printed in the Wall Stree Journal. By the

time my friend's firm got involved, all the top level execs had either left or

were in prison. Often in these cases temporary management are the execs of

the bankruptcy firm hired to handle the company's situation. All major

decisions will be handled by a judge, right down to who gets paid. The

reasonable stable companies will live to see another day. I doubt SCO will be

one of them. Despite the Chap 11 filing, I see liquidation in their future. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 03:56 PM EDT

Delaware, not Utah - Authored by: beast on Friday, September 14 2007 @ 04:13 PM EDT

Authored by: spambait42c on Friday, September 14 2007 @ 04:01 PM EDT

The page that PJ links to includes the following: Moreover, the U.S. trustee is required to move for appointment of a trustee if there are reasonable grounds to believe that any of the parties in control of the debtor "participated in actual fraud, dishonesty or criminal conduct in the management of the debtor or the debtor's financial reporting." 11 U.S.C. § 1104(e) Any predictions on how long it will take for Novell to make this claim, once they have standing? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:05 PM EDT





My guess is that SCO is going to try and be bankrupt and pay its current

creditors (law firm & allies) to try to avoid Novell. Whatever they can hide

in the hands of allies they will do rather than let Novell have it.



If they get their way they will emerge from Chap 11 with balanced books and no

IP or other semi valuable. Good things will be sold to cover their selected

debts.



Novell gets to sue the remaining shell.





My understanding is that that there was a considerable shell game with DRDos,

(Previously Novell Dos) that the Canopy group was involved with. The parent

company has done it before and they seem unlikely to leave anything of value in

SCO before they face the Novell bill. [ Reply to This | # ]



Authored by: wholeflaffer on Friday, September 14 2007 @ 04:05 PM EDT

Bankruptcy is the ultimate result of failed management.



Any company decisionmaking up until the time of bankruptcy is in the hands of

the owners' management...after bankruptcy (under Chapter 7 or Chapter 11), the

previous managers may still be permitted to "man the helm" for some

period of time. However, until the company exits bankruptcy, either through

liquidation or reorganization, the management privilege is wrested from the

hands of the owners and the power to make decisions (as in the Captaincy of a

ship) is given to the courts (usually via a trustee).



So goes the theory, anyway. As usual, I look forward to sitting back and

discovering how this plays out in the "real world" of the American

legal system. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:08 PM EDT

" said Darl McBride, President and CEO, The SCO Group. "Chapter 11

reorganization provides the Company with an opportunity to protect its assets

during this time while focusing on building our future plans." "



Meaning: "We got nothing, except our tickets out of here."

[ Reply to This | # ]



Wrong - Authored by: Anonymous on Friday, September 14 2007 @ 05:26 PM EDT Ya .... - Authored by: Anonymous on Friday, September 14 2007 @ 08:06 PM EDT

- Authored by: Anonymous on Friday, September 14 2007 @ 05:26 PM EDT

Authored by: ilde on Friday, September 14 2007 @ 04:09 PM EDT

Or do they have to comply with some other requisites? [ Reply to This | # ]



Authored by: WarpKat on Friday, September 14 2007 @ 04:13 PM EDT

And he/she/it is GREAT!



I honestly don't feel sorry for the people still working at SCO. They made a

conscious decision to remain there under the circumstances that everyone else

knew was bogus.



Even I said they were going to die a slow death and here's effect of the stab in

the face they got during court.



[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:16 PM EDT

Can someone explain the implications of bankruptcy in this case? If the

conversion is proved - that SCO kept money rightfully belonging to Novell -

shouldn't Novell get status as other than a regular creditor? Novell certainly

didn't extend credit - they were robbed.



This sounds almost like someone robbed a bank, spent lavishly with the proceeds,

and then tries to hide behind bankruptcy to avoid returning the money.



thanks,

Mike [ Reply to This | # ]



Authored by: sk43 on Friday, September 14 2007 @ 04:17 PM EDT

David Bradford and Tor Braham's strategy to protect Novell

is about to be put to the test. We will now have the

opportunity to see which, if either, of



"Buyer only has legal title and not an equitable interest in

such royalties within the meaning of Section 541(d) of the

Bankruptcy Code."



or



"Schedule 1.1(b) Excluded Assets ... V. Intellectual Property ... A. All

copyrights"



is able to protect Novell's stream of future SVRX royalties.

[ Reply to This | # ]



Also noted... - Authored by: Wardo on Friday, September 14 2007 @ 05:31 PM EDT Also noted... - Authored by: Anonymous on Friday, September 14 2007 @ 07:58 PM EDT

- Authored by: Wardo on Friday, September 14 2007 @ 05:31 PM EDT

Authored by: webster on Friday, September 14 2007 @ 04:19 PM EDT

...

....This is an attempt to get away from Kimball. You can't have two judges

deciding on the apportioning of what's left.



The fact that SCO had a fiduciary duty is a factor.



Novell should consider moving the Bankruptcy case back to Kimball. The

Bankruptcy court would be happy to oblige and assist in whatever way it can.



There may be some simultaneous action soon.



---

webster





© 2007 Monopoly Corporation. ALL rights reserved. Yours included. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:24 PM EDT

Authored by: Anonymous on Friday, September 14 2007 @ 04:25 PM EDT

Sue people (including your customers), Pump and dump, and when you start to

loose the lawsuits you've initiated ... file for Chapter 11



This is obviously an prime example for text books on sharp business practices. I

bet several other companies would love to emulate this.



Lets hope that there is some recourse under law for Novell and IBM to get

recourse for SCO's antics, however now knowing what Chapter 11 etc entail when

someone is loosing a lawsuit they initiated it's hard to comment.



Mind you I think everyone expected SCO to pull this one if they started loosing [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:32 PM EDT

In SCO's bankruptch filing listing the 20 largest unsecured claims, it shows

Microsoft Licensing, Inc, as a creditor owed $125,575.00. (And another $50K

owed to Sun...)



Wazzup with that?



Interestingly, Novell is NOT listed as a creditor.



More interestingly, Darl signed the statement, "under penalty of

perjury". [ Reply to This | # ]



Authored by: UglyGreenTroll on Friday, September 14 2007 @ 04:34 PM EDT

In America, being the litigious place that it is, it's common for investors to

sue management when things go pear shaped. SCO also has a history of being

rather loose with their public announcements, making them vulnerable to such

things.



Question: Is there a chance of an investor lawsuit? Is it even worthwhile for

investors to do so (that is, is there enough money to get at)? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:35 PM EDT

PJ - Please tell me you got the Red Dress out of the closet today!



Beautiful night for celebrating - being Friday and all.



Or, are you going to be keeping us updated tonight?



Do have some fun, won't you?



Cheers. [ Reply to This | # ]



Authored by: inode_buddha on Friday, September 14 2007 @ 04:36 PM EDT

Get ready for the slashdotting of a lifetime... it should be an interesting

weekend.



---

-inode_buddha

Copyright info in bio



"When we speak of free software,

we are referring to freedom, not price"

-- Richard M. Stallman [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:37 PM EDT

Scenario:

State Court- MOTION TO STAY

Fed Court - ORDER STAYING

Fed.Court - APPT. TRUSTEE

Fed.Court - MOTION TO CONSOLIDATE

Fed.Court - Chapter 13

State or Fed. Court - Criminal Charges Filed [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:39 PM EDT

Last few steps. They've filed for Chapter 11 (reorganization). How long will

it be until they give up and file for Chapter 7 (disolvement)? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:44 PM EDT

Am I right in thinking that Novell wouldn't be a normal creditor in this

situation?



Normally a company's creditors are those who have provided services/goods and

have not been paid or have lent money and not been repaid.



Therefore the money that was to be paid to the creditors (and which it no longer

has enough of) was the bankrupt company's originally.



However here it appears that the money SCO collected from the agreements never

belonged to them in the first place - at all times it was the property of

Novell. SCO were merely acting as collection agents.



Therefore, if they are found guilty of conversion ("converting" it to

their own use), the civil equivalent of what in criminal law would be theft, it

would seem unlikely that bankruptcy protection would help them.



Am I somewhere in the ballpark here?

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:44 PM EDT

Look for a filing from Novell to that bankruptcy court yet today (before

5:00pm). I have a feeling that they've had that filing waiting.

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 04:45 PM EDT

What is a "Caldera": Caldera



Sant a Cruz Operation -> Caldera -> SCO Group -> Caldera (again!)



Only the most unskilled management team could have done this. [ Reply to This | # ]



Authored by: rfrazier on Friday, September 14 2007 @ 04:46 PM EDT

AMICI, LLC $500,650.73



BOIES, SCHILLER & FLEXNER, LLP $287,256.39



Of course, this is a drop in the bucket compared to what they've already got.

(At least for Boies, et al. AMICI is a legal services company, I think.)



Best wishes,

Bob





[ Reply to This | # ]



Authored by: cmc on Friday, September 14 2007 @ 04:51 PM EDT

While I see no "light at the end of the tunnel" for SCO, there are

some companies that come out of Chapter 11 perfectly fine. One glaring example

is MCI WorldCom. They pulled off one of the biggest financial scams ever, got

caught, filed for Chapter 11, and came out of it with no battle scars. If I

remember correctly, the U.S. government even gave them contracts while they were

under bankruptcy protection. [ Reply to This | # ]



Scoundrels, bankruptcy - Authored by: Anonymous on Friday, September 14 2007 @ 06:04 PM EDT

- Authored by: Anonymous on Friday, September 14 2007 @ 06:04 PM EDT Scoundrels, bankruptcy - Authored by: Anonymous on Friday, September 14 2007 @ 08:25 PM EDT

Authored by: snakebitehurts on Friday, September 14 2007 @ 04:53 PM EDT

In my past I have owned stock in several companies that went into chapter 11

bankruptcy. One of the first things that happened was the stock was declared

worthless. Investors lost it all. Stockholders are unsecured creditors and go

to the very bottom of the list. Seeing the 43% drop in their stock today, it

looks like others have figured it out. Suspect it will be zero shortly.

Remaining investors should get out quick. [ Reply to This | # ]



Authored by: John Hasler on Friday, September 14 2007 @ 04:57 PM EDT

I thought they had around $10M left? Did the get rid of most of it, or do they

have thousands of creditors each owned less than $5450? Seems unlikely: they

aren't an airline.



---

IOANAL. Licensed under the GNU General Public License [ Reply to This | # ]



Authored by: rsi on Friday, September 14 2007 @ 04:59 PM EDT

I have to wonder if this might come back to bite them as the Court has already

declared SCO owes money to Novell.



The next few weeks will be interesting! [ Reply to This | # ]



Authored by: chad on Friday, September 14 2007 @ 04:59 PM EDT

SCO owns the core UNIX operating system, originally developed by AT&T/Bell Labs... No, they don't. They own a license to use the core[yada, yada...] Perhaps the judge should have spoken slower. [ Reply to This | # ]



Authored by: webster on Friday, September 14 2007 @ 05:05 PM EDT

..

1. BK is not a bowl of cherries. The Fiduciary angle calls for more vigilance

than usual. With no significant profits from operations, an undetermined

adverse judgment a week away, and no ships coming in, the BK Court ought to shut

them down and conserve ASAP, in this uninformed opinion.



2. A nasty search for assets and discovery of all SCOnkers could begin now if

anyone thought there were a stray million or so out there. The Bankruptcy

Trustee needs a fee too.



3. The case was never trial worthy. The documents and witnesses were

hopelessly compromised. SCO employees have had years to prepare for this. They

should be ready. Grinding legal work on the battle issues can easily come to

this - a totally alien source of resolution although realistically anticipated.





4. Shallow pockets made for a worthy Plaintiff who did not have something to

lose. The PIPE Fairy has deep pockets somewhere.



5. SCO waited too long to do this. There is already a Judgment with a

fill-in-the-blanks dollar sign. [$ ??,000,000.00]. They thought Kimball would

leave them something for the jury. They gambled and lost. Since they are doing

this now, the speculation and regret is that they should have done this before

the summary judgments.



6. So are the Defendants all around going to strike back? Will they go after

the SCOnkers as individuals? Fiduciary duties make it easier. It is getting

very nasty and personal, if so. Will the Nazgul pursue the PIPE Fairy, the real

perpetrators? SCO did their job. It just didn't work out they way they

planned. So what is left of the FUD campaign?



---

webster





© 2007 Monopoly Corporation. ALL rights reserved. Yours included. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 05:06 PM EDT

I just did a quick "Google" on fudiciary duty and bankruptcy and found this web site describing a contractor that did not pass through a payment. http://www.constructionweblinks.com/Resources/Industry_Reports__Newsletters/Sept _23_2002/arkansas_contractor.htm (I tried to make it clicky.) It seems that there are conditions where a debt owed under a fudiciary duty may not be discharged in bankruptcy. PJ, Could you or some one else with a better legal brain offer commentary if this is a simular situation as SCO since Judge Kimball ruled a fudiciary duty exists. [ Reply to This | # ]



Authored by: IMANAL on Friday, September 14 2007 @ 05:07 PM EDT

This risk was recognized early on by belboz here at Groklaw.





Authored by: belboz on Thursday, August 26 2004 @ 07:48 AM EDT



I have a question for you US legal experts.



What happens to the case(s), if the SCOG cash is spent, and the file for bankrupcy?



- Will the case(s) be cancelled, since one of the parties no longer exist as a legal entity (and can't afford lawyer fees)?



- If so, does that save people involved from following suits (purgery, Lanham act, slander, ...), since, as the case is left unfinished, any wrongdoing has not been judged/proved?



There will probably be an investor suit, but that is besides the issue.



Or will free counsil be provided to complete the legal process?









The link contains many answers and discussions of various outcomes, and many more can be found in the Groklaw archives under "Search".







---

--------------------------

IM Absolutely Not A Lawyer [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 05:11 PM EDT

"SCO is doing this to make Novell into a creditor with respect to the money

SCO owes to Novell."



Won't work. Novell's claim isn't as a creditor. Their claim is

"equitable", meaning that SCO is holding theor property ($$$), not

that SCO owes them money. When you go bankrupt, anyone who can show that they

own property you're holding on to can claim it from the trustee.



This happens a lot with vending machines, for example, when a plant goes bust.

The owner proves that the machine is theirs (not leased or anything - it really

is theirs), and they then get to pick it up.



Since Novell already has a judgment saying that SCO is guilty of conversion, and

the question is "how much", they have a prior claim to the property

(money) in question. SCO is dead.

--

Is this so, that this is equitable?

[ Reply to This | # ]



Interesting comment on /. - Authored by: Anonymous on Friday, September 14 2007 @ 05:44 PM EDT

Authored by: Wardo on Friday, September 14 2007 @ 05:14 PM EDT

Does the BK filing stop the trial(s), or just the payments that may have to be

made as a result of judgements?



Wardo



---

caveat lector...

Wardo = new user(lawyer = FALSE,badTypist = TRUE,badSpeller = TRUE); [ Reply to This | # ]



Authored by: overshoot on Friday, September 14 2007 @ 05:15 PM EDT

So, since SCOX has already been found liable for conversion but has (probably forever) stayed the determination of how much Novell has coming to them, the question before the bankruptcy court is: Where does Novell stand in the line of creditors? It looks like the wunderkinder at SCOX have lined up a softball list of creditors who are collectively owed less than cash on hand -- if you don't count IBM and Novell. However, that finding of conversion is the elephant in the room. So -- is the presumption in Bankruptcy Court: Worst case: Novell has about $30 million coming until proven otherwise?

Best case: Novell gets bupkis because Judge Kimball is out of the loop?

The trustee has the Novell trial run in the interests of judicial economy, since someone has to figure out what's left (if any) for the other creditors. Now, all of that presupposes that this makes the (rapid) conversion to Chapter Seven. Obviously, the execs at SCOX would prefer to spend a few years in Chapter 11 drawing pay until the cash is all gone; I want to know if their not listing Novell as a creditor was a mistake. Since there's already a finding of conversion against them, are they doing a no-no on the Bankruptcy Court? Are they leaving an opening for Novell to have the BK Court flip them right back to Judge Kimball's tender mercies? [ Reply to This | # ]



Schroedinger's Royalties - Authored by: tknarr on Friday, September 14 2007 @ 06:03 PM EDT

Authored by: Anonymous on Friday, September 14 2007 @ 05:15 PM EDT

I really want to see Judge Kimball deliver his final rulings in this case.



But that's nothing to how much I really, really, really want to see the Nazgul

finally go in for the kill in the IBM case.



On the other hand, if the company itself disappears and can no longer be

counter-sued then we can only hope that they'll regroup and concentrate on

"piercing the corporate veil" - so they can go after Darl & Co as

individuals.



The evidence put forward that the individuals in question went ahead with their

copyright threats to corporations and the case against IBM - when they knew they

didn't have the copyrights (having asked Novell for them and been rebuffed) -

should help that I'd think?

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 05:16 PM EDT

Don't go shopping for crimson lingerie just yet. SCO has just dodged a bullet -

they know what would happen in court, same as we do - and is back on the bus to

Delaysville. I've no doubt this was Plan B all along, and as the judge tipped

his hand over the last flurry of filings, it's been quietly promoted all the way

to A.



What happens next? I wish I understood the US justice and financial systems

better. But these are civil cases; they can be stopped by mutual agreement at

any time, and somebody else (as I understand it) is going to be in ultimate

charge at SCO.



The outcome may not be as bloody as some may have wished. But open source won

this one a long time ago, and that's what matters...



[ Reply to This | # ]



Authored by: DaveJakeman on Friday, September 14 2007 @ 05:16 PM EDT

At any other time than this, I'd have been happy with SCO going Chapter 11. With the trial due on Monday, they stuff their pension away on Thursday and file Chapter 11 on Friday. The dirty, rotten SCOundrels!!! This is what you might expect from bully types: all bluff and bluster, but when faced with the prospect of a real fight, they're nowhere to be seen. This was so obviously timed. No, I'm definitely not wearing my Red Dress tonight. :( ---

Monopolistic Ignominious Corporation Requiring Office $tandard Only For Themselves [ Reply to This | # ]



Authored by: SilverWave on Friday, September 14 2007 @ 05:27 PM EDT

Breaking out the bubbly :)





Darl you were BAD for the company and you are a disgrace.



Bad Darl!



No Cookie!



---

"intellectual property" - a propaganda term designed to confuse patent law with

copyright and other unrelated laws and to muddy the different issues they raise. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 05:28 PM EDT

Would SCO try something like this in their Chapter 11 move?

1. Ask Judge Kimball to place all cases on hold pending resolution of the

bankruptcy.

2. Ask the bankruptcy trustee (referee, case manager?) to declare Unix the

property of SCO. (After all, its part of the bankruptcy process to look for

additional corporate assets.)

3. Tell Judge Kimball the issue of ownership has already been decided by another

judge.

[ Reply to This | # ]



Authored by: Alan(UK) on Friday, September 14 2007 @ 05:28 PM EDT

SCO, owners of the UNIX and LINUX operating systems and on the verge of winning

a multi-billion lawsuit against IBM, have been forced into Chapter 11 bankruptcy

by IBM lawyers working through the pseudononymous 'Pamela Jones' of Groklaw.



Darl McBride, speaking from a secret location in South America, stated that he

expects a quick reversal of the company's fortunes as soon as revenue starts to

flow from SCOsource Linux Licences.



[Someone will be saying this, so I may as well get in first.]



---

Microsoft is nailing up its own coffin from the inside. [ Reply to This | # ]



Authored by: cjk fossman on Friday, September 14 2007 @ 05:28 PM EDT

We've known they were morally bankrupt for a long time! [ Reply to This | # ]



Authored by: pantologist on Friday, September 14 2007 @ 05:34 PM EDT

SCOX's market cap is roughly $8million today. They've got about $13mil in cash

on hand and all those debts. Companies like this typically go for between 2X

and 3X revenues, so that puts in the realm of $50 give or take. Minus cash,

they're a friggin' steal.



IBM or Sun will snatch them up as soon as the bankruptcy paperwork is signed.

Either one of those guys would immediately open source all of UNIX and put a

bullet into the whole Unix vs Linux issue. Or, Oracle might buy them just to be

pricks since they seem to enjoy killing companies.



Be on the lookout for a bidding war for these guys in the next few weeks.

They're on the chopping block now. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 05:34 PM EDT



While it may delay payment from SCO-the-company to its creditors (Novell first,

plus other creditors--IBM may well have a claim for damages), one thing to

understand about Chapter 11:



* It tries to keep the *company* around as a thriving entity, in the hopes that

creditors will be better satisfied than if the company were simply liquidated.



* Chapter 11 bankruptcy can have two causes:

** Balance sheet problems--liabilities exceed assets, and the company has

negative equity. Often times when this occurs and a company goes into chapter

11, the prior shareholders stake becomes worthless, and the creditors end up

owning the newly reorganized company. Often times, the management that caused

the bankruptcy (that would be you, Darl) is ultimately fired--though usually not

until the conclusion of the bankruptcy.

** Cash flow problems. Assets exceed liabilities, but short-term liabilities

exceed cash on hand. Kind of like having positive equity on your house, but not

having a job and being unable to make the mortgage payment. The result of this

is often a restructuring of debt--creditors will agree to a partial payment or a

longer schedule, or will accept a stake in the company in lieu of payment.

Management generally survives in this case, and ownership doesn't change hands.



Not sure which type this is... [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 05:36 PM EDT

The above bankruptcy filings are for SCO Operations NOT SCO Group. The SCO

Group filings would make a whole lot more interesting reading. I wonder where

they are and if they were ever filed. [ Reply to This | # ]



Authored by: rsmith on Friday, September 14 2007 @ 05:36 PM EDT

They file for chapter 11 protection the day before the trial begins, after

repeatedly assuring the court that they wouldn't go under. It seems like a

pre-planned move to me, trying to get another delay. You've got to hand it to

SCOG; they really know how to game the system. It's sickening.



It'll be a real perversion of justice if they get away with this.





---

Intellectual Property is an oxymoron. [ Reply to This | # ]



Authored by: rsi on Friday, September 14 2007 @ 05:39 PM EDT

TIMPANOGOS HIGH SCHOOL

1450 N 200 E

OREM, UT 84057



WHY would they owe a High School, unless they are send Darl back to school,

since he obviously didn't get an education the first time around! ;^)



I wonder how much and for what? If not much, maybe we should pay this one off.

High School students should not be punished for Darl's incompetence! [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 05:45 PM EDT

Actually, I predicted shortly after the trial dates were announced and everyone

was debating how long the money would last, that SCO would file the week before

trial.



SCO's claims are shot. All that's left are the counterclaims. Despite all the

fancy titles to all the motions, the counterclaims collectively spell F-R-A-U-D.

And as an attorney once laid it out for me, fraud is harder to prove in a

bankruptcy court.



Bankruptcy court has its own rules, which are geared less toward fact finding

and fault, and more toward streamlining the disbursement of remaining assets.

SCO is simply trying to do an end-around past Kimball's inevitable evisceration.

They will attempt to streamline all the cash to partners and friends while

cutting Novell and IBM out of the loop. All while piously deflecting the blame

for the obvious lies and extortion by saying "No more, sorry, we're done.

Its a moot point, go away!" [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 05:48 PM EDT

Actually, looking at the long list of creditors, Novell and IBM are on that one,

but with no amount listed. The others on list include several tax collecting

groups (IRS, Utah, VA & GA tax agencies amoung others).



To me it looks like they are playing games, and need to have this dismissed by

the BK judge, or held in abayance until Kimball rules on what is due Novell.



Could this also help unlock Red Hat case? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 05:50 PM EDT

I have only one thing to say.



(Ahem)



HOJOTOHO! HOJOTOHO! HEIAHA! HEIAHA!



(google it if you don't take it ;-) [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 05:57 PM EDT

How can SCO expect to file a reasonable reorganization plan without knowing what

amounts if any it owes,

Novell, IBM and RedHat?



Certainly any chapter 11 filing means nothing unless the lawsuits are all

resolved. Especially in Novell's case as the Judge has ruled SCO is holding a

non-zero amount of money due Novell.



No other creditors can be paid until Novell is. Anything else means SCO is using

"converted" money to pay of its debts.



The Novell case now has a clear priority for resolution.

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 06:10 PM EDT

Since Novel is not a creditor to SCOX, never been or ever will be, I hope, the

bankruptcy is unlikely to affect them in any way: SCO holds Novel's property, so



to speak, they didn't just "borrow" money from them, they basically

"stole" the

money. I believe that bankruptcy might stop all collection attempts, but if

there's a court ruling - bankruptcy can't protect you from that. Correct me if

I'm

wrong.



Thanks! [ Reply to This | # ]



Novell is listed in the full list - Authored by: Anonymous on Friday, September 14 2007 @ 06:46 PM EDT

Authored by: Anonymous on Friday, September 14 2007 @ 06:11 PM EDT

Could Novell or any of the other creditors petition bankruptcy court to move for

a chapter 7 liquidation proceeding? What are the rules for a pubically-traded

company in this instance?

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 06:11 PM EDT

This is good for IBM because now the SCO vs. IBM case in in the hands of the

Bankruptcy Trustee. Since it is a bogus case, he should drop it for financial

reasons.



The Novell case should also be the property of the Trustee, what ever asset it

is worth.



SCO would of been wiser by saying nothing, they would still be collecting

illeagal revenue and all would think they owned Unix. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 06:11 PM EDT

Novell has carefully avoided characterizing SCOG's actions as criminal, even

going so far as to drop meritorious claims, in order to keep SCO v. Novell

(counterclaims) in equity court, not law court, thereby avoiding the potential

caprice of a jury.



SCOG desperately needs a jury trial, as their only hope of survival rests on a

fresh naive audience to decieve. SCOG has even gone so far as to object to

Novell dropping certain claims against them, on the grounds that the claims are

a matter of law which would require a jury.



On Monday, Judge Kimball is prepared to decide how much of Novell's money SCOG

is holding, and immediately establish a constructive trust to protect it. The

amount is likely to be more than SCOG has. SCOG faces liquidation.



Now, SCOG forestalls the constructive trust by filing for bankruptcy protection.

SCO v. Novell is adjourned pending SCOG reorganization. Novell may be forced

to line up with other creditors for pennies on the dollar. Naturally, Novell

wants to claim that the withheld revenues are Novell's property that is

wrongfully in SCOG's posession, rather than SCOG's property that is owed to

Novell.



SCOG is going to argue that such a claim is tantamount to charging SCOG with

larceny by conversion. Since this a criminal charge that must be heard in law

court, SCOG is entitled to face a jury.



-Wang-Lo.

[ Reply to This | # ]



Authored by: Jude on Friday, September 14 2007 @ 06:13 PM EDT

> "We examine a sample of 459 firms filing for Chapter 11

> during the period 1991 to 1998 and find that our sample

> firms experience significant improvements in their operating

> performance during Chapter 11."



Umm, maybe because they ditch the bad management that got them into bankruptcy?



BTW, does anyone know what happens to executive salaries during chapter 11?





[ Reply to This | # ]



I wonder why... - Authored by: Anonymous on Friday, September 14 2007 @ 06:45 PM EDT

- Authored by: Anonymous on Friday, September 14 2007 @ 06:45 PM EDT The reason... - Authored by: Anonymous on Saturday, September 15 2007 @ 02:00 AM EDT

Authored by: Anonymous on Friday, September 14 2007 @ 06:26 PM EDT

Now we can confidently say that Daryl has played every trick in the book to

delay the trial(s). [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 06:28 PM EDT

RESOLUTIONS OF THE BOARD OF DIRECTORS OF SCO OPERATIONS, INC. September 13,2007

[SCO_CH11-1-A.pdf]



The SCO BoD decided on Thursday September 13, 2007 to put the company into Ch.

11, but they let the stock open & trade for a few hours on Friday September

14, 2007 - This is not good.



On a side note - Dang, I wish I was in the room when McBride was signing all

those BK papers! Each copy having the "I declare under penalty of perjury

that the information provided in this petition is true and correct..." [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 06:31 PM EDT

Har har har! That's the first really good laugh I've had all day. I expected them to be much shorter, though. The same way that you don't have much time to say anything when you're hurtling down the road at 60 mph and the sign you just passed says "Bridge Out 100 Feet". There just not that much "forward" to look to, is there? :^) I know it's not (quite) the end of the road for these guys but I'm having a tall one tonight in celebration anyway. It can't be long now. Once the bankruptcy fiasco is over, I fully expect 'ol Darl to be making some "backward looking statements" on the order of "I coulda been a contenda... I coulda been somebody." [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 06:32 PM EDT

was that legal, shovelling a load of money into the pension fund just before

filing for bankruptcy? Surely the creditors can go after it? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 06:38 PM EDT

they wait until the last possible moment on the last possible day and sleeze their way out of having to face the consequences of their own lies in Court. I think I may want to vomit. So what now? Are we ever going to resolve the stink they created? Are we ever going to clear our names? Is Darl and Ralph and the rest of their vile cabal ever going to have to accept any kind of penalty for what they've done?

I mean, so Darl has been pulling down some obscene salary all this time, no doubt, and spewing this libelous garbage about how the Linux community are all a bunch of theves . . . us! I mean, do you know any group of people who value honesty more? Certainly not the Business or Legal community, I should think! Anyway, so Darl's been riding his little sleeze parade for a while now, and it's just going to be "Oops! Sorry guy's, bad break. Protection from creditors, doncha know. Can't touch me now, all law suites are off!"

This wasn't like a company that got out manovered in the marketplace, or lost on gamble on some new technology, or any kind of legetimate business that went under for any of the many reasons that can happen. This was full on attempted extortion, using the expense and hassle of a public lawsuit, no matter how baseless, as a weapon. [ Reply to This | # ]



Authored by: trevmar on Friday, September 14 2007 @ 06:38 PM EDT

PJ, Stephen Shankland's source, in saying that there would be no trial, was SCO

executives. They are hardly reliable.



IMO, IANAL, I would think the decision is still in Novell and the Judge's hands

until it is proven that the defendant has filed for bankruptcy, whereas we have

only seen 'SCO Operations' to this point. I would not put on the red dress until

somebody moves a motion for it to be suspended, with cause duly given. There is

a shell game going on here. I haven't seen the details of the end-game yet. I

suspect the motion to suspend may well be moved verbally on Monday morning, when

everybody gathers, or it may be filed in the normal way, or the hearing may go

on, especially if the shell game has not been executed cleanly.

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 06:42 PM EDT

That one is going to leave me scratching my head for a while. [ Reply to This | # ]



Authored by: inode_buddha on Friday, September 14 2007 @ 06:42 PM EDT

If you check google news main page *right now* you'll see all the SCO news

coverage there...



---

-inode_buddha

Copyright info in bio



"When we speak of free software,

we are referring to freedom, not price"

-- Richard M. Stallman [ Reply to This | # ]



Authored by: thombone on Friday, September 14 2007 @ 06:48 PM EDT

To me, this seems like an end-run around all of the looming gloom and doom that

SCO has been facing. I see it as a way for Darl and Co. to escape any real

liabilities. I also see it as a way, right on the EVE of the start of the Novell

trial, for SCO to not even list them as a creditor, thus pushing Novell even

further away from the money they are OWED.



Why do I feel sick? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 06:49 PM EDT

SCO most likely isn't the first, would be interesting to see other court cases

like this. Or perhaps SCO is the first in history to stay the courts by filing

bankruptcy. SCO is so low. They claim to have money to the end, their

credibility really shines here doesn't it? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 06:49 PM EDT

There is a document on the subject of Chapter 11 bankruptcy here. The section on the automatic stay states: The automatic stay provides a period of time in which all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition. As with cases under other chapters of the Bankruptcy Code, a stay of creditor actions against the chapter 11 debtor automatically goes into effect when the bankruptcy petition is filed. 11 U.S.C. § 362(a). The filing of a petition, however, does not operate as a stay for certain types of actions listed under 11 U.S.C. § 362(b). It goes on to suggest that there are circumstances where a secured creditor may ask the court to grant relief from the stay, but does not go into any great detail about what those circumstances may be (it only gives one example). However, what has been pointed out elsewhere is that Novell have not been listed as a creditor, and would therefore follow that they probably would not be allowed to gain such relief. From the looks of this, I'd say that this is the product of TSG's flawed "we're gonna win this" attitude. I seem to recall a point PJ made, I think it was about the summary judgement filings: IBM and Novell's filings made no assumptions that they would win their other motions and so were argued on their own merit; TSG's motions tended to assume that they would gain positive rulings in their other motions. They have already filed for a final judgement, and they are looking at appealing the judgement that has already been handed down. I suspect that they expect to win on appeal, and are therefore working on the assumption that they already have. So Ch11 stalls the case. Since there is no final ruling and they're going to win the appeal and wind up proving they do not owe Novell any money, Novell cannot be a creditor. IANAL, but I think that there will be a filing from Novell with respect to the bankruptcy. This would suggest how: The Bankruptcy Code defines a claim as: (1) a right to payment; (2) or a right to an equitable remedy for a failure of performance if the breach gives rise to a right to payment. 11 U.S.C. § 101(5). Generally, any creditor whose claim is not scheduled (i.e., listed by the debtor on the debtor's schedules) or is scheduled as disputed, contingent, or unliquidated must file a proof of claim (and attach evidence documenting the claim) in order to be treated as a creditor for purposes of voting on the plan and distribution under it. Fed. R. Bankr. P. 3003(c)(2). Novell has a ruling which says that TSG owes them money, they just do not have a ruling which says how much money TSG owes them (is that a legitimate reason to grant Novell relief from the automatic stay: "We're creditors, we just need the judge to tell us how much we're owed"). So Novell could presumably use the existing ruling from the court to file a claim to become a creditor, at which point they gain a say in the reorganisation plan. Presumably all this is liable to mean a whole load more expense for Novell (and IBM?). My instinct in Novell's position might be to find a way to cut and run from the whole horrid mess. It it were doable, I would say make a deal with TSG to terminate the APA handing back the responsibility of the assets to Novell, grant TSG the necessary license to carry on the rest of their business (if it survives) and walk away from it. Issue some public statements to the effect that there is no UNIX code in Linux, drop the IBM case and then open source the code so no one can pull this crap again. Now that might not sound realistic given the money that IBM and Novell have had to chuck at this, but if Novell were to release that code under a BSD license it would effectively protect IBM's AIX business and the Linux activities of both companies. Idle speculation, of course. I'm sure Novell and IBM are thinking up their own plans which are probably much better informed and thought out than my ramblings. [ Reply to This | # ]



Authored by: bigbert on Friday, September 14 2007 @ 06:52 PM EDT

Authored by: Laomedon on Friday, September 14 2007 @ 06:54 PM EDT

From Press Release The SCO Group, Inc. .. filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code. SCO's subsidiary, SCO Operations, Inc., has also filed a petition for reorganization. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 07:03 PM EDT

Investors should study McBride's recent interview very carefully. I think he

may have misled potential investors about the financial viability of the firm. [ Reply to This | # ]



CEO gave misleading information? - Authored by: Anonymous on Friday, September 14 2007 @ 07:12 PM EDT

Authored by: Anonymous on Friday, September 14 2007 @ 07:08 PM EDT

I do not understand



According to the top 20 debtors list they

have debts of about 1.5 million.



According to their filing, they

have at least 1 million in assets.



The company has several million in revenue every

quarter.



How can they claim bankrupcy?

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 07:11 PM EDT

It seems like he might have some valuable insights into the circumstances that brought SCO to this unfortunate situation. When a company goes into Chapter 11 under circumstances such as this, where they are involved in multiple lawsuits which are possibly contributing to the unenvious financial position in which they now find themselves, is it typical for the Court to be consulted on these issues? And in particular, might he have some say in whether or not a particular lawsuit or lawsuits might be allowed to proceed, even under Chapter 11 protection? And how might this affect any summary judgment motions that might be ready to be resolved in those lawsuits? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 07:24 PM EDT

Given that SCO represented to the Court that they weren't contemplating

bankruptcy, can Kimball (who now has 4 days of time that he didn't expect) haul



SCO & BSF into his courtroom and ask them why he shouldn't hold them in

contempt of court? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 07:36 PM EDT

The top 20 creditors classified by industry are: Lawyers and Other Legal

Amici LLC - $500,650.73

Boies Schiller, - $287,256.39

Silverman Heller Associates - $10,352.35

Madson & Austin - $8,478.32

Randd Strategic - $7,026.79

Sage Forensic Accounting - $6,221.00

AmLaw Discovery - $5,399.57 Total to lawyers - $825,385.15 IT Industry Companies

Microsoft Licensing, Inc. - $125,575.00

Sun Microsystems, Inc. - $50,000.00

Veritas Software - $37,881.33

Unisys - $25,302.11

Fujitsu Services - $25,302.11

HP-Nonstop Royalty Accounting - $25,302.11

Intel - $23,302.11

4Front Technologies - $10,417.50

Sun Microsystems Inc. Software Royalty Accounting Group - $5,414.40 Total to companies in the IT industry - $328,496.67 Miscellaneous

Canopy Group - $139,895.00

Gre Mountain Heights Property - $132,502.00

KSJ Consulting - $21,781.25

Profile Consulting - $5,450.00 Total to Misc - $299,628.25 This means that 57% of their debts to their biggest creditors are debts to their lawyers and legal consultants. The biggest debt (over a third of the debt listed above) is to Amici, who specialise in storing records for litigation purposes. Interestingly, isn't Amici the company that had a connection to Boise (through his children), but was sold to Xerox last year? Now this company has ended up as the biggest bag holder in this bankruptcy. Wouldn't you expect the records management company to get paid on a regular basis? After all, they provide a fairly simple service, so they ought to be able to provide an up to date bill at least every month. Is Xerox going to ask how they ended up holding this very empty bag? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 07:36 PM EDT

If this is just a subsidiary of SCO group, SCO Operations, that's filing for

bankrupcy, does this stop the trial at all? I always thought that the combabants

in the trial(s) were SCO Group. I don't see that a susbidiary filing for chapter

11 should freeze court proceedings involving the holding group.



Should Novell's lawyers be turning up on Monday after all? It's be a shame to

miss the trial.



Hmm. Maybe I shouldn't read Groklaw and watch horror movies at the same time. [ Reply to This | # ]



Authored by: jfw25 on Friday, September 14 2007 @ 07:41 PM EDT

And boy does it ever: a bunch of crooks gaming the legal system to obtain, or

hang onto, money which isn't rightfully theirs.

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 07:46 PM EDT

IANAL - But, I believe if they do not list the monies owed to Novel, and Novel

files the BK court, and the court finds that it has already been settled by

another court that they misappropriated the money from Novel, and did not list

it it their filings they could be in big trouble.



The BK filing could be turned down, and no protection for the Utah boys. [ Reply to This | # ]



Authored by: John Hasler on Friday, September 14 2007 @ 07:47 PM EDT

The press release says SCO Group is filing but so far we have only docs for the

SCO Operations subsiduary. Could someone with PACER access try to look it up?



Seems to me that if SCO Group has not actually filed by Monday morning Novell

could insist that the trial go ahead.



---

IOANAL. Licensed under the GNU General Public License [ Reply to This | # ]



Authored by: tiger99 on Friday, September 14 2007 @ 07:48 PM EDT

On the long list, I see they owe at least four of their experts, Christine Botosan, Gary Pisano, Marc Rochkind and Evan Ivie. I seem to remember him posting here a while back, very bravely if I may say so. He did indicate that one of his motives for being an expert in this case was financial. Well, he has not yet had his money and it does not look as if he will ever get any more than a small proportion of it. Maybe he will be a lot more careful about where he provides his "expert" opinions in future. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 07:52 PM EDT

Just thinking in a VERY evil way now...



Could SCO admit that they owe Novel $200,000,000.... get the debt wiped out

by bankruptcy protection, and demand their 5% administrative fee from Novel,

giving them a $10,000,000 pile of cash? [ Reply to This | # ]



Authored by: Laomedon on Friday, September 14 2007 @ 07:58 PM EDT

on page 4 of voluntary petition (SCO Group) as of Sep 10, 07: Total assets: $14.8 million Total liabilities $7.5 million Clearly, that does not include what Novell is asking for. [ Reply to This | # ]



Authored by: Steve Martin on Friday, September 14 2007 @ 08:00 PM EDT

From PACER: Deadlines/Hearings terminated: Bench trial set for 9/17/2007 is vacated due to the notice of bankruptcy filing. (kmj) (Entered: 09/14/2007) HOWEVER — it's not all bad news. Also from PACER, docket 469 --- ORDER denying 419 Motion for Reconsideration or Clarification. Signed by Judge Dale A. Kimball on 9-14-07. (sih) (Entered: 09/14/2007) Although Rule 54(b) allows a court to revisit any order that rules on less than all of the claims in a case, a motion to reconsider is not appropriate when it merely restates the partys position taken in the initial motion. A motion for reconsideration is an inappropriate vehicle to reargue an issue previously addressed by the court when the motion merely advances new 3 arguments, or supporting facts which were available at the time of the original motion. Absent extraordinary circumstances, . . . the basis for the second motion must not have been available at the time the first motion was filed. Servants of the Paracletes v. Does, 204 F.3d 1005, 1012 (10 Cir. 2000). A motion to reconsider must be made upon grounds th rounds other than a mere disagreement with the courts decision and must do more than rehash a partys former arguments that were rejected by the court.



[...]



While a motion for reconsideration should be granted to correct manifest errors of law, see Phelps v. Hamilton, 122 F.3d 1309, 1324 (10 th Cir. 1997), neither SCOs arguments nor the courts review of its prior order convinces the court that the analysis in its prior order contains manifest errors of law. SCO also states that insofar as it has misapprehended the courts ruling on this issue, its motion should be considered a request for clarification. The briefing on this motion and other pretrial motions demonstrates that SCO has not misapprehended the courts ruling. Therefore, no clarification is necessary. BAM! ---

"When I say something, I put my name next to it." -- Isaac Jaffee, "Sports Night" [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 08:03 PM EDT

I see someone already crunched the numbers, but let's think about the math a

little more.



The top twenty creditors are owed 1.5M (a hair less, actually) in total.



The 20th largest creditor is owed around 5k.



I got to the creditor matrix page before PJ (quite properly) pulled the link to

it. It's a very strange list, but more to the point there are 24 pages of

creditors at 30 per page for a total of 720 creditors.



700 * 5k = 3.5M. Of course their actual debt to these people (not counting

Novell, which IS listed and potentially IBM who is NOT listed) should be

considerably lower. Given the statistical distribution of the upper end of

their debts, this could potentially be as low as 1M.



But let's not quibble about lower bounds here. By SCO's accounting, the upper

bound of their debts is $5 million.



What do we know about SCO's assets? (To be sure, I'm not good at reading

financial statements. But. I'll try.)



By the April 10Q, which is the most recent one showing in the SCO Financials

section here at Groklaw, they have nearly $7.8 million in cash or cash

equivalents.



Now, maybe they blew some of that off in the last quarter or so, but this all

looks very weird to me. Are you really allowed to declare bankruptcy when you

could simply pay off your creditors out of pocket? If so, why isn't everyone

doing this?



...this looks like really bad lawyering to me. It doesn't pass the common sense

smell test (yeah, I know, but in the end you have to admit the judges so far

have used their noses), and I look forward to Novell's countermaneuvers in

response. Even better than IBM, they've managed to shred SCO in court, and I

think that SCO is putting its own foot into the woodchipper for them on this

one.



-Ked

[ Reply to This | # ]



Authored by: JR on Friday, September 14 2007 @ 08:05 PM EDT

Ok, so if SCO owes McBride his platinum parachute bonus, then he is in line

before Novell and IBM? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 08:08 PM EDT

While I see a lot of gleefull shouting I don't understand what is going on. Are

we dealing assumptions or reality?



1. Is the trial before Judge Kimball postponed or does it get held anyway to

set the scope of Novell's share?



2. How will the Bankruptcy Court be inclined to handle the Conversion issue?



3. Is any of this likely to open a crack into the 401K funds or Daryl and his

cohorts personal wealth? [ Reply to This | # ]



Authored by: John Hasler on Friday, September 14 2007 @ 08:10 PM EDT

They list exactly the same amounts owed to exactly the same people on both

top-twenty creditor lists.



---

IOANAL. Licensed under the GNU General Public License [ Reply to This | # ]



Authored by: rfrazier on Friday, September 14 2007 @ 08:13 PM EDT

The Novell lawyers have been on the ball, pretty much providing a counter to

each of SCO's moves, probably seeing them before they occur. Wouldn't they have

seen this as a strong possibility? Of course, even given that, options for

response may be pretty thin on the ground.



Of course SCO made a big mistake in not doing this before the summary rulings

came down. (Hubris, no doubt. And, I suspect, that will come back to haunt

them.)



Do the "stays" in Chapter 11 include appeals? I.e., since the court

hasn't given a final order, or whatever, is it the case that they have to play

out the trial, whenever that is, before SCO can appeal?



Best wishes,

Bob

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 08:22 PM EDT

OK, so SCO has more assets than liabilities, so they have no need to file for BK

protection, except that Kimball is about to rule that they owe more money than

they have to Novell. So they file for bankruptcy. This means that they don't

have to go to court (yet, I assume) for the trial, which means that Kimball

doesn't decide how much money they owe Novell. (Note the absense of any

declaration of that amount on the list of their liabilities.) But that means

that they aren't actually insolvent yet, so (at least according to the papers

filed with the BK court) they have no need to declare bankruptcy at all. But

that means that their petition for BK protection should be denied. But that

means the Novell trial can go forward, at which point SCO will be bankrupt...



My head hurts.



MSS2 [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 08:25 PM EDT

Bankruptcy means that the creditors aren't getting paid. That includes BSF.

BSF hasn't been getting paid for their time for quite a while now, and now they

aren't getting paid for their expenses either.



That might mean less enthusiasm for this farce on their part...



MSS2 [ Reply to This | # ]



Authored by: jws on Friday, September 14 2007 @ 08:30 PM EDT

The last thing that we need is a bankrupt zombie with $10m in remaining assets,

and Debtor in Posession. I hope there is a reciever appointed, or that either

Novell or IBM or someone who can at least put a cork in the FUD gets into the BK

court and has standing to make some difference there.



It's a totally different world over in Federal Bankruptcy court, and with the

right judge and circumstances, fraud that might slide by as just a

"business mistake" can get people 10 or 20 years in the federal prison

there.



Hiding assets is a quick ticket to prison. Lying about where the assets came

from is, which should prove interesting if someone forces SCO to disclose

information that might go back to groups who were rumored to be mischief makers

in the past, but could not be flushed out there.



I see this as a reaction to the failure to get the appeal fast tracked. I don't

see it as well reasoned, as all the prepaid lawyer talent they have are in Utah

doing the SCO vs. world litigation, and they'll have to hire at least as

talented specialist in Delaware now to handle this maneuver.



Interestingly I just got my first call from someone for a SCO Openserver today.

They'll be really thrilled by this I'm sure. And conversion to Linux in the

near term isn't an option. All special custom hardware with SCo in the middle

of the mess.



[ Reply to This | # ]



Authored by: tiger99 on Friday, September 14 2007 @ 08:34 PM EDT

.... but perhaps not unexpected, as it was obvious from past performance that the only thing that SCO needed was delay and more delay. Being not very knowledgable about US law, I was guessing that towards the end of next week would be the time for bankrupcy, but instead of that they have managed to file earlier than necessary and so generate a huge, and as yet unknown, amount of delay to the several trials. Hopefully Novell or IBM will be able to get the bankrupcy court to refuse Chapter 11, and force Chapter 7, because otherwise this may go on for several more years. What we have not yet seen is the truly enormous scam that the Puppetmaster is going to perpetrate on the world, for which they still need lots of delay and FUD. There is no other apparent reason for SCO to continue to exist, and in the circumstances, Chapter 7 would have been far more reasonable if SCO existed as a genuine business, not as a tool of the Monopoly. My guess is that their latest scam will be to try to get OOXML (Objectionally Obtuse XML) to be enshrined in international law as the only such format to be allowed, if and when it gains ISO approval. If they get away with that one, it will give them world-wide, perpetual vendor lock-in, and a license to print as much money as they like, while continuing to deprive the world of software of acceptable quality. Their bargaining power with governments will be to allow their security services to have access to the secret back-doors that undoubtedly exist in their vile bloatware. But if Linux, ODF (ISO 26300), and other major parts of the alternative set of possibilities, not all necessarily free, get on to sufficient desktops, especially in government offices, that will be impossible to achieve. Now is the time to push Linux (or even xBSD or Solaris), OpenOffice, and whatever applications fit your particular needs best, harder than ever. And, of course, keep up the battle against OOXML, and the corruption of the standards process. Gates and Ballmer have not won yet, and hopefully never will. Judging by the general uselessness of Vista, the replacement for Gates must be about equally incompetent. The FOSS community can win on technical competence, if they don't get embroiled in in-fighting. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 08:34 PM EDT



Business as usual. Now there's a loaded term. Wonder what

SCO thinks that means, vs. what other people think it means?



Also, I hardly think it will be business as usual if a trustee runs

the company. I can't imagine SCO would be left a debtor in

possession. Court supervision is not business as usual.



Also, the bankruptcy judge, as I understand it, can cancel

last-minute SCO transactions if they were made in bad faith,

especially transfers of cash or other assets. There's a time

frame for this in the bankruptcy statute, but I can't recall it.



Also, the Bankruptcy Court is under no obligation to accept

the case. The judge can dismiss the petition on a number of

grounds.



Finally, the judge can allow other proceedings to, well, proceed

under some circumstances. So, he can allow the IBM trial to,

well, proceed. Other proceedings can proceed if the bankruptcy

judge allows it.



[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 08:36 PM EDT

Authored by: Anonymous on Friday, September 14 2007 @ 08:37 PM EDT

If someone ever writes about SCO, they *so* have to make either the chapter 7 or

chapter 11 title "Bankruptcy" :-)



I say that because of the hope that this chapter 11 will get turned into chapter

7 very soon now. After which, we can watch them chase down Darl & the

executives who actually performed that conversion of Novell assets into

executive bonuses and futile lawsuits, among other things ... [ Reply to This | # ]



Authored by: The Mad Hatter r on Friday, September 14 2007 @ 08:43 PM EDT



First, some of what I read doesn't make sense. I suspect that there are

additional documents to be filed which will fill in the blanks.



Second, Novell may not be a creditor in this case, due to the nature of the

contract. If I give Fred money to pay Stan, and Fred doesn't pay Stan, but

instead spends the money, and then goes bankrupt trying to claim the money as

his, it won't work, the money is still Fred's.



This should be interesting though. Can you imagine the look on the bankruptcy

judge's face when a bunch of geeks attend the hearings? I suspect that most

judges wish there was a greater interest in the law and it's effects, and

they'll get that in this case.



And of course there's management. Will the bankruptcy trustee leave current

management in place? Don't forget that Novell's legal team are going to be all

over this. And as we've seen they are VERY competent.



This was a defensive move. If they can convince the bankruptcy judge that Novell

is a normal creditor it's one thing, if they can't, all hell breaks loose. Still

it probably looked better than being handed their heads on a platter at the end

of next week.





---

Wayne



http://sourceforge.net/projects/twgs-toolkit/

[ Reply to This | # ]



Authored by: thombone on Friday, September 14 2007 @ 08:50 PM EDT

Wow, that was fast!



I hope someone somewhere archived that thing. Would be a lot of history lost

(not that Groklaw didn't cover this thing well, the Yahoo boards still have

their historical value just the same, you know?) [ Reply to This | # ]



Authored by: wvhillbilly on Friday, September 14 2007 @ 09:00 PM EDT

Now that SCO has filed for bankruptcy, does this mean Darl, Ralph, et al, are

out of the management loop and bankruptcy referees (or whatever they're called)

take over?



And what happens to the trial and Judge Kimball's ruling that they owe Novell

all those SVRx revenues they converted to their own use? It would be sad seeing

these SCOundrels using bankruptcy as a "get out of jail free" card.



---

What goes around comes around, and the longer it goes the bigger it grows. [ Reply to This | # ]



Authored by: snakebitehurts on Friday, September 14 2007 @ 09:03 PM EDT

We knew this was coming, but it has a bitter taste. The U.S. Congress changed

the laws on personal bankruptcy a few years ago. If you, as an individaul, can

pay off your debt in the future; well, you will - even if it takes a gazzillion

years



Corporations on the other hand have carte blanche. Declare bankruptcy, stiff

all your debtors and give them pennies on the dollar, if anything. Stockholders

lose everything.



They issue new stock and move on.



What SCOX has done is played the system perfectly. While they have stayed their

"we want our day in court", it does not appear to me that they have

liabilities in excess of their assets - as of now.



So we'll see how this plays out. I hope PJ or one of the lawyers here can speak

to what this all means.



IMHO, it appears to me they may have done this too soon. They may have needed

to wait for the trial to award $$$ to Novell that exceed their assets. Looks to

me like they can pay their bills at the moment. They stayed the trial.



I wonder if a RICO suit could be brought against them for trying to scam the

world and then using the system to declare bankruptcy when it looks like the

scam won't work.



SCO's lawyers are not dumb. This looks like a well thought out plan, and it is

not fair. (I wanted to say something beside "not fair" but in

consideration of PJ's policies on profanity .....")



aaarrrggghhh!



[ Reply to This | # ]



Authored by: Jaywalk on Friday, September 14 2007 @ 09:05 PM EDT

Gee, G2 Computer Intelligence is Maureen O'Gara's rag and it's on the list of SCO's creditors. So I guess it's official; MOG is not a neutral journalist, but SCO's paid mouthpiece. It's nice to have confirmation on these things. So I wonder how those who've been shelling out nearly $600 a year to hear her learned opinions feel now that they find out she's on SCO's payroll.



---

===== Murphy's Law is recursive. ===== [ Reply to This | # ]



Maureen O'Gara? - Authored by: jfw25 on Friday, September 14 2007 @ 10:13 PM EDT

Authored by: Anonymous on Friday, September 14 2007 @ 09:07 PM EDT

Don't the companies owed debt get a say on whether they will accept

reorganization, and would this not be based on their portion of what is owed

-- and for this would they not have to settle with Novell/IBM etc. before they

can figure this out?



Can the creditors force it into Chapter 7? (the one where it is no longer a

going concern).



Would the auditor not bring in his own lawyers and accountants to review all

liabilities (including lawsuits)?



Man, everything was clear to me -- NOW I am totally lost. [ Reply to This | # ]



But ? - Authored by: Anonymous on Sunday, September 16 2007 @ 12:31 PM EDT

Authored by: maz2331 on Friday, September 14 2007 @ 09:21 PM EDT

I did a quick Google of "bad faith" in regards to bankruptcy filings,

and there is apparently precident regarding exactly the same situation as SCO is

in.



Using bankruptcy just as a tool to thwart other litigation is apparently a BIG

no-no. From a non-authoritative source:



http://touchngo.com/lglcntr/usdc/bnkrptcy/briefs/bnk45.htm



"One area ripe for a bad faith dismissal is when the debtor is using a

bankruptcy filing as a litigation tactic to either forestall litigation or seek

a forum perceived to be more friendly. In Marsch, the court upheld a 'bad faith'

dismissal where the chapter 11 petition was filed solely to delay collection of

a judgment and avoid posting an appeal bond where the debtor had the financial

means to pay the judgment."



Also, in addition to dismissing the bankruptcy case, the bankruptcy courts may

well impose the "nuclear" sanction - barring SCO from asserting

another bankruptcy claim in the future. This would leave them totally exposed

to the full wieght of any other judgements, with no way out at all - not even

Chapter 7 liquidation. In other words... "you're on your own,

Darl..."



Is anyone with any expertise in bankruptcy proceedings around to help the

community figure out exactly how this works?



Something tells me the bankruptcy filing is not going to fly for long, but may

expose SCO's legal team to some serious malpractice liability.



And... maybe after this little road bump is resolved we'll finally see Kimball

bring some real sacnctions down on the SCO side too.



This is just getting beyond ridiculous. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 09:22 PM EDT

why this would halt the Novell trial. All that will determine is how much their

payment to Novell should be. Doesn't the bankruptcy court need to know that?



Furthermore, it doesn't seem fair to Novell as the money they are after isn't a

debt that SCO owes them but rather, how much of Novell's money they haven't

returned.



This is precisely why Novell wanted a trust fund set up. [ Reply to This | # ]



Process synchronization - Authored by: Ed L. on Friday, September 14 2007 @ 11:52 PM EDT

Authored by: ChasF on Friday, September 14 2007 @ 09:26 PM EDT

In UK and European company law, the audited company accounts must include "Contingent Liabilities" - i.e. debts that the company might have to pay with a statement clarifying/quantifying the likely payout. For example, look at British Airways and the "price-fixing cartel" issue - there was a provision in the accounts significantly before the judgements were announced. This raises questions about SCO's auditors - what checks and analyses did they carry out to make sure that the opinions given by the SCO Directors were certain or very probable? A person who bought shares after the last year end; Novell; or ordinary creditors might well have a good claim here. [I seem to remember that Andersen's had a wee problem with this ...] Non-factual bit that I can't be bothered to research: Didn't SCO change its auditors recently? Disclaimer: IANAL; I have no knowledge of the US accountancy rules; and I was last a bean-counter 20 years ago in England. [ Reply to This | # ]



Authored by: Viv on Friday, September 14 2007 @ 09:29 PM EDT

Been waiting a long time for this but thought they would hold out a while longer



yet.



Still they never did a thing that made sense in the first place so why start

now.



Viv



---

Is it me or what! [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 09:30 PM EDT

If the judge had allowed the early appeals. If the judge had allowed that SCO

could be appealing those rulings, with the rest of the trial delayed from the

bankruptcy. [ Reply to This | # ]



Authored by: Newsome on Friday, September 14 2007 @ 09:44 PM EDT

Knowing SCO, they really filed Chapter 7 Bankruptcy, but it was overlength, and

got mistaken for Chapter 11.



---

Frank Sorenson [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 09:58 PM EDT

So SCOX got Novell trial to stall, but IBM's PSJ motions are fully briefed. Will

the judge rule on them or do they have to stall as well? Common sense would say

no, but I don't know what the rules are. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 10:05 PM EDT

Can Novell notify it's former Srvx clients to stop paying SCO dn pay them

directly? I seem to recall that the agreement allowed Novell to revoke SCO's

right to collect royalties if there was a problem. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 10:19 PM EDT

Does the bankruptcy proceedings include a review of when the decision was made

with regard to the stock trades made by the insiders before the announcement?



If the bankruptcy court decides that this is a bad faith filing simply to avoid

the trial, and that the executives used the delay in filing to dump thier stock

and get more money, are the executives Criminally Liable?



Do the two judges get to talk to one another regarding the circumstances

surrounding the filing and SCO's legal history of delays by any means possible.



Can the bank accounts of the executives be frozen and examined for fraudulent

transactions?



Can thier passports be revoked/held?

[ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 10:31 PM EDT

This is a bad move on SCO's part. First of all it has to get past Novell

pointing out that at this point in time a) SCO has more assets than debts and

cash flow is apparently not a problem. Also that SCO has submitted to a court

under oath that bankruptcy was not imminent and as such this appears a bad faith

application. b) SCO cannot say how much of the money it is allowed to keep from

the Sun and Microsoft licence deals. It *could* be everything, *could* be

nothing or *could* be somewhere in between (After this move, if it was me it

would be nothing and then some. I expect Judge Kimball will be a lot more

objective and unbiased). The fact that SCO cannot tell with any accuracy what

assets it has and cannot because of the petition for Chapter 11 protection would

also imply bad faith.



Give the quality and preparedness of Novell's lawyers I would be expecting them

to be telling their excellent paralegals to dig out the SCO Chapter 11

contingency documents and fine tune the language.



Expect motions to fly on Monday, together with a memo from Novell to Judge

Kimball, as a matter of courtesy, explaining that they will be opposing the

Chapter 11 petition. [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 11:01 PM EDT

When does the trial get stayed? What if SCO did this just to keep Novell from

showing up on Monday in front of Kimball but SCO shows up alone? Has Kimball

announced the vacation of Monday's trial? [ Reply to This | # ]



Tricks - Authored by: wvhillbilly on Friday, September 14 2007 @ 11:28 PM EDT

Authored by: schestowitz on Friday, September 14 2007 @ 11:38 PM EDT

You win.



:-)



---

Roy S. Schestowitz, Ph.D. Candidate in Medical Biophysics

http://Schestowitz.com | GNU/Linux | PGP-Key: 0x74572E8E [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 11:39 PM EDT

Shouldn't BSF's continuing obligation to carry on litigating for SCO be listed

as a SCO asset with a multi-million dollar figure? and can't BSF be forced to

caugh-up all that cash as belonging to Novell? [ Reply to This | # ]



Authored by: Anonymous on Friday, September 14 2007 @ 11:48 PM EDT

Isn't this bankruptcy filing a little premature?



SCO claims that their assets are almost double their liabilities. At their historical burn rate they should be able to continue operations for months.



It is important to remember that the amount of money they may have to remit to Novell has yet to be determined. Certainly, if they are found to be in possession of the amount of Novell's money that we think they are then they would be insolvent, but that hasn't happened yet.



Instead of talking about them moving to Chapter 7, shouldn't we be talking about how to prevent them from fraudulently entering Chapter 11? [ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 12:36 AM EDT

The following are the major shareholders as listed in the bankruptcy documents. Listed are all shareholders with more than 5000 shares (note, Yarrow is listed twice, so his seconds small shareholding is also shown). Shareholdings are shown as (number of shares) [value of shares at $0.37]. Unfortunately, the comment system does not allow tables, so the formatting is not as clear as it otherwise could have been. CEDE & CO  BOWLING GREEN STATION - NEW YORK, NY: (14,286,457) [$5,285,989.09] RALPH Y ARRO  PROVO, UT: (5,492,834) [$2,032,348.58] THE SCO GROUP TREASURY ACCOUNT  LINDON, UT: (297,409) [$110,041.33] JET CAPITAL INVESTORS LP  NEW YORK, NY: (285,714) [$105,714.18] GOLDMAN SACHS & CO FBO AMTRUST INTERNATI  OWINGS MILLS, MD: (242,857) [$89,857.09] SCOGGIN INTERNATIONAL FUND LTO  NASSAU BAHAMAS: (187,000) [$69,190.00] SCOGGIN CAPITAL MANAGEMENT LP II  NEW YORK, NY: (187,000) [$69,190.00] ETON PARK MASTER FUND LTD  GRAND CAYMAN CAYMAN ISL: (182,705) [$67,600.85] CHESAPEAKE PARTNERS LIMITED PARTNERSHIP  BALTIMORE, MD: (148,215) [$54,839.55] CHESAPEAKE PARTNERS INTERNATIONAL BALTIMORE, MD: (148,215) [$54,839.55] ETON PARK FUND LP  NEW YORK, NY: (98,380) [$36,400.60] GUGGENHEIM PORTFOLIO COMPANY VII LLC  NEW YORK, NY: (56,000) [$20,720.00] DARCY G MOTT  ALPINE, UT: (51,020) [$18,877.40] EDWARD E IACOBUCCI  DELRAY BEACH, FL: (36,923) [$13,661.51] CLEMONS F WALKER & LESLIE A WALKER TTEES  HENDERSON, NV: (10,000) [$3,700.00] TY MATTINGLY  BOSTON, MA: (9,541) [$3,530.17] BRUCE GRANT  PLEASANT GROVE, UT: (7,856) [$2,906.72] CHARLES FIFE  DENVER, CO: (5,901) [$2,183.37] R J Y ARRO & L L Y ARRO JTWROS  OREM, UT: (3,000) [$1,110.00] Total Share Market Value: $8,042,699.99

This is the total does not include individual shareholdings of less than 5,000 shares. Note that "CEDE & CO" is not a real company. It is stock market jargon for a central depository where stock is held by the brokers for clearing. In other words, if it is registered in the name of "CEDE & CO", it is very difficult to trace who actually owns the shares. In other words, we don't know who actually owns most of the shares. Oh, something else worth noting is that Darl's name is not on the list of shareholders (not even one share). Either his shares are held in someone else's name, or else he doesn't own any. [ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 12:51 AM EDT

Just when we thought the semester was ending now we get to learn Bankruptcy law.

What an education! And tuition for this class is really cheap, just some

sleepless nights!



Copyright Law, Contract Law, Patent Law, ethics, how not to act in front of a

judge, how not to sue the world, discovery, summary judgement, Federal Civil

Procedure rules, now Bankruptcy Law!



Thanks SCO! Your millions have paided for the legal education of thousands of

ordinary people.



Sorry it cost DC, IBM, NOVL, AZ, and RedHat so much money though. But they will

make it up in free advertising!

[ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 02:00 AM EDT

Nice picture of Darl McBridge here:

http://blog.wired.com/27bstroke6/2007/09/battered-sco-fi.html [ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 02:12 AM EDT

The following is an analysis of the list of named shareholders listed in the bankruptcy documents. The first below shows the number of shareholders who hold a particular range of shares. This is shown as "number of shares" (number of shareholders) "percent of shareholders". For example, the first record shows that 95 shareholders hold less than 10 shares, and these shareholders total 23.81% of the total number of shareholders. Number of Shares per Shareholder Versus Number of Shareholders in that Class

less than 10 (95) 23.81%

between 10 and 100 (193) 48.37%

between 100 and 500 (79) 19.80%

between 500 and 1000 (8) 2.01%

between 1000 and 5000 (5) 1.25%

between 5000 and 10,000 (5) 1.25%

between 10,000 and 5,000,000 (12) 3.01%

between 5,000,000 and 10,000,000 (1) 0.25%

more than 10,000,000 (1) 0.25% We can see that 91.98% of the shareholders own fewer than 500 shares. 500 shares at today's price of $0.37 per share is $185.00. In fact, nearly three quarters of the shareholders own less than 100 shares, which have a value of $37.00 at today's price. The next list shows how many shares are held by each range of shareholders. This is shown as "number of shares" (number of shares) "percent of shares". For example, the second record shows that shareholders who own between 10 and 100 shares hold 7,775 shares, or 0.04% of the total. Number of Shares per Shareholder Versus Number of Shares Owned by That Class of Shareholder

less than 10 (485) 0.00%

between 10 and 100 (7775) 0.04%

between 100 and 500 (15415) 0.07%

between 500 and 1000 (6113) 0.03%

between 1000 and 5000 (8732) 0.04%

between 5000 and 10,000 (42913) 0.20%

between 10,000 and 5,000,000 (1921437) 8.82%

between 5,000,000 and 10,000,000 (5492834) 25.22%

more than 10,000,000 (14286457) 65.59% Ralf Yarrow owns the 25.22% holding. A dozen others own 8.82% between them. Another 385 shareholders own 0.37% between them. The bulk of the shareholdings though are hidden behind the anonymous "CEDE & CO" registration (see the above piece on major shareholders). This means we don't know who really owns most of SCO. From this we can see that all except about a dozen of the identified shareholders don't own enough shares for their opinions to matter. If we assume the people registered under "CEDE & CO" will remain out of the picture (they may be just speculators who will take no active role in the company), then Darl has to listen to at most a dozen or so shareholders with total shareholdings of 34% of the shares. Of these, Ralf Yarrow holds 25%, or three quarters of the shareholdings of this group. In other words, it appears that Ralf Yarrow's 25% holding gives him effective control of the company and there are no other shareholders or combination of shareholders who can overrule him. [ Reply to This | # ]



Distribution of Shareholdings - Authored by: Anonymous on Saturday, September 15 2007 @ 09:35 AM EDT

Authored by: grouch on Saturday, September 15 2007 @ 02:31 AM EDT

Ah, Delaware. The place where litigation is left to slowly rust away, pending the outcome of something or other that seems to involve similar names. So, in the year 2525, if man is still alive, Delayware may notice that SCOG filed bankruptcy on the eve of trial in which it would be determined just how many dollars they grabbed by "breach of fiduciary duty, conversion, unjust enrichment, and breach of express contract." [See Memorandum Decision and Order 2007-09-10]. Leave a note in a 'time capsule' for your ancestors alerting them to watch for some courtly activity regarding a novel little case in their ancient history. I wonder if much will come of APA §1.2(b) where it says, "not equitable interest in such royalties within the meaning of Section 541(d) of the Bankruptcy Code." Will Delayware decide that such things need not be bothered with until after, say, the Daimler case finishes? SCOG sure knows how to game a system. Reminds me of someone else, somehow. ---

-- grouch



"People aren't as dumb as Microsoft needs them to be."

--PJ, May 2007

[ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 03:14 AM EDT

Question for the more experienced:



Is it possible when it is found that SCO holds more of Novell's money than they

can pay without asset liquidation, that in essence the APA be annulled and all

it covered reverted back to Novell in Lieu of cash payment - or are those assets

worth more than what is owed? [ Reply to This | # ]



Authored by: mtew on Saturday, September 15 2007 @ 03:24 AM EDT

NOT A LAWER!



Will the SCO vs Novell trial be stayed?



1) The start of the trial on Monday has been 'vacated'.

2) 'Vacated' is not the same as 'stayed' but I don't know what the difference is

or what that implies.

3) The bankrupcy filling changes things enough so that the judge and Novell need

time to react. In other words, the delay may not be due to the rules of

bankruptcy.

4) The court is closed for the weekend. More information will not be available

until Monday.



Will the bankruptcy prevent the various trials?



1) Several issues on trial do not involve money. These will probably continue

in spite of the bankrupcy filing.

2) The SCO vs Novell trial will only add to tSCOg's debt incidently. The

'equity' vs whatever issue hinged on that difference. Judge Kimball and the

bankruptcy court will probably have a consultation on the issue before SCO vs

Novell proceeds.

3) The Redhat vs SCO case is not about money. The copyright questions in Utah

have been decided so there is no reason this can not proceed. This wasn't due

to come up until the end of the month anyway.

4) Autozone and others (if any): Your guess is probably better than my guess.



Are Darl, Ralph and so on going to jail?



1) The bankrupcy does increase their risk but it's still an open question.

Don't expect resolution until next year. (In my opinion Darl is just a scape

goat. The one that deserves the big sentence is Ralph. Scape goats also need

to be locked up but they are dumb beasts and do not really understand what is

going on.)



---

MTEW [ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 04:10 AM EDT

Non-Dischargeable Debts



There are certain non-dischargeable debts which a bankruptcy petition cannot

eliminate and remain legally enforceable. One such non-dischargable debt is a

debt incurred by fraud, false pretenses, false statement in writing, fraud

committed while serving in a fiduciary capacity including embezzlement and

larceny, and other false acts.



The U.S. District Court has already ruled that tSCOG breached its fiduciary

obligations by unlawfully converting Novell's monies to its won use. Does this

finding of unlawful conversion perhaps satisfy the criteria for fraud, false

pretenses, and so forth needed to classify the debt owed to Novell as a debt

which is non-dischargeable in a Chapter 11 bankruptcy?

[ Reply to This | # ]



Authored by: drh on Saturday, September 15 2007 @ 04:24 AM EDT

I know, applying logic to a legal case...



The summary judgement issued by Judge Kimball has declared that SCO

"converted" monies due to Novell. SCO is therefore illegally in

possession of these funds, and there is also the matter of intent.



This means that the list of SCOs assets is incorrect because some or all of

those assets belong to Novell. Novell is not technically a creditor, they did

not give this money to SCO in offer of repayment, the money was taken from

them.



The judgement was released before the bankruptcy filing and is binding upon

those proceedings. Novells request for a constructive trust was also filed prior

to the bankruptcy and may also be binding. Technically these funds are not

actually available to SCO upon entering into Chapter 11.



In light of the conversion judgement, what is Novells standing in the bankruptcy

proceedings? How do they go about getting their money (what little is left)?



As mentioned above in another post, SCO may have filed for Chapter 11, but the

court is not obligated to accept. There are a range of people/companies who can

file objections to the acceptance including creditors, shareholders,

leinholders, etc. These same entities can also, if the court accepts the

application, file for relief outside the normal proceedings.



If accepted, SCO is placed into an "estate" that is governed by the

bankruptcy court and its appointee(s). This estate I believe is legally

obligated to settle all outstanding matters, including court cases. Cases

involving non-monetary matters should be allowed to proceed (REDHAT, portions of

IBM). I don't think the bankruptcy court can take precedence over these types of

cases. Monetary cases can and will be delayed, settled, allowed to continue, or

denied as the appointed trustee sees fit with court approval.



I think the Novell trial must be allowed to proceed because it is crucial to the

actual determination of SCOs assets prior to entering Chapter 11.



And SCO has achieved another delay. But at this stage of the game, what are they

achieving by delay? The money is gone...





---

Just another day... [ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 05:25 AM EDT

Please note that the named Hans Bayer from Bad Homburg, Germany is most likely

the CEO of The SCO Group GmbH, Norsk-Data-Straße 3, 61352 Bad Homburg. [ Reply to This | # ]



Authored by: Vaino Vaher on Saturday, September 15 2007 @ 05:41 AM EDT

Istn't this similar to how Microsoft mutilated and sarcrificed Sendo in its fight for mobile phone market share? Did they use the same plan for both operations? Will both operations fail (leaving only a trail of unhappy investors and unemployed staff)? And why do we not see the press shading light on this?

(In my opinion these stories are just as juicy as Watergate. But again, I read groklaw every day and my wife does not understand a thing of what I'm ranting about). [ Reply to This | # ]



Authored by: Toon Moene on Saturday, September 15 2007 @ 05:48 AM EDT

> Groklaw. When you want to know more, but don't know where

> to look.



Groklaw: Everything you wanted to know about law, but were afraid to ask.



---

Toon Moene (A GNU Fortran maintainer and physicist at large) [ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 07:27 AM EDT

Novell can now tell SCO, that since SCO is not paying anything on their contract

with Novell, that Novell revokes SCO's right to sell any Unix since they've

defaulted on the Novell SCO contract.



That puts out of any business with UNIX.



[ Reply to This | # ]



Authored by: rfrazier on Saturday, September 15 2007 @ 08:10 AM EDT

I thought that they were in Utah, not California.



Best wishes,

Bob

[ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 08:30 AM EDT

To come out of bankruptcy, they have to settle with Novell, IBM and Red Hat. At

least one of them will insist on a lot of money. Since SCO's revenues have been

going down and it doesn't look like the trend will change in the near future,

they will not have the money to pay the amount needed. At some point, a trustee

will be convinced that the operation cannot be salvaged and convert the

Bankruptcy from 11 and 7. [ Reply to This | # ]



Authored by: dobbo on Saturday, September 15 2007 @ 08:35 AM EDT

I just clicked on the Nasdaq link in the main article and the code against SCO's name has now gone to T3. T3: Halt - Resumption Times

The news has been fully disseminated through a Regulation FD compliant method(s); or NASDAQ has determined either that system misuse or malfunction that caused extraordinary market activity will no longer have a material effect on the market for the security or that system misuse or malfunction is not the cause of the extraordinary market activity; or NASDAQ has determined the conditions which led to a halt in an Exchange-Traded Fund are no longer present. Two times will be displayed: (1) the time when market participants can enter quotations, followed by (2) the time the security will be released for trading. All trade halt and resumption times will be posted in HH:MM:SS format. [ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 08:40 AM EDT

Seems to me there should be some way to point out and address this obvious abuse

of process. Is there anything thta can be done? [ Reply to This | # ]



Authored by: om1er on Saturday, September 15 2007 @ 08:58 AM EDT

In the list of creditors, there appear to be companies and organizations that could only be affiliated with SCOG because they have purchased support contracts. PJ says: Irony here is that SCO says it owes Missile Defense Agency in Alexandria, Va. Uh oh. And Sara Lee Underwear.... They are probably both folks with a support contract or something perfectly normal. From the SCOG Press Release: Reorganization ensures business as usual and that assets remain for continued support of customers and channel partners ... "We want to assure our customers and partners that they can continue to rely on SCO products, support and services for their business critical operations," said Darl McBride, President and CEO, The SCO Group. "Chapter 11 reorganization provides the Company with an opportunity to protect its assets during this time while focusing on building our future plans." I have a question about those support contracts. Does filing Chapter 11 relieve SCOG from providing support for the remainder of the support contracts? If customers with support contracts are listed as creditors, and the creditors get less than they are owed, then that would seem to be the case. But that is not what the SCOG press release says. ---

August 10, 2007 - The FUD went thud. [ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 09:00 AM EDT

As SCO made the deals with Microsoft and SUN there should have been outstanding

debts somewhere in SCOs financial statement for the fees SCO has to pay to

Novell.



The last chance to do that, should have been as Novell filed SCO for paying the

license fees. These (uncertain?) debts should have been somewhere in the

financial statement. Has anyone seen them? And if SCO has to pay the license

fees, the old statements are simply wrong.



As Novell isn't listed in the dept list. Who is in charge that the license debts

have not been considered in the financial statements? [ Reply to This | # ]



Authored by: rfrazier on Saturday, September 15 2007 @ 09:17 AM EDT

Doesn't this have the characteristics of a "Hail Mary" pass? They are already in a world of hurt, and this puts off the day of reckoning for a bit longer. (And makes things even more costly for others.) Well, regarding SCO not having a plan, perhaps the DAUPHIN in Henry V got it right when he said the following. But though we think it so, it is no matter:

In cases of defence 'tis best to weigh

The enemy more mighty than he seems:

So the proportions of defence are fill'd; Which of a weak or niggardly projection

Doth, like a miser, spoil his coat with scanting

A little cloth. Best wishes,

Bob [ Reply to This | # ]



Authored by: Anonymous on Saturday, September 15 2007 @ 11:21 AM EDT

It is interesting that absent from the list of Equity Security Holders of the

SCO

Group is the Chief Executive Officer of the company, Mr. McBride. Usually

corporations like to have senior management hold some stock in the

company under the theory that decisions affecting the company should also

affect the fortunes of those ma