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Caldera Government The Almighty Buck The Courts News

SCO Puts a Cap on its Legal Expenses 247

Posted by CowboyNeal from the buck-stops-here dept.
prostoalex writes "The SCO Group reached an agreement with the lawyers to limit the litigation expenses to $31 million until the IBM lawsuit is resolved. The company already paid $12 million to Boies Schiller & Flexner LLP, Kevin McBride and Berger Singerman, which provide legal services to the company."
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SCO Puts a Cap on its Legal Expenses More

SCO Puts a Cap on its Legal Expenses

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  • Until Microsoft slides more money under the door (Score:5, Funny)

    by justanyone ( 308934 ) on Thursday November 04, 2004 @10:15PM (#10731001) Homepage Journal

    Enough for now...
    Until Microsoft slides more money under the door...

  • goodbye CS... hello law school (Score:5, Funny)

    by xannik ( 534808 ) on Thursday November 04, 2004 @10:16PM (#10731003)
    I need to get me a piece of that. :-)

    • Re:goodbye CS... hello law school (Score:4, Funny)

      by elid ( 672471 ) <.moc.liamg. .ta. .dopi.ile.> on Thursday November 04, 2004 @10:36PM (#10731139)
      But then there's this little issue of morals that you might need to deal with.... :-)
    • I need to get me a piece of that. :-)

      What makes you think McBride has got it? linuxguy [slashdot.org] seems to have the scoop and McBride has nothing.

      Stay is school. The job market is terrible, thanks in part to lawsuit happy wipes like SCO. Still, it looks like the bad guys are losing. In a few years, you might emerge onto a better market. If you get out now and whore like McBride, you might end up in jail.

  • God Bless The Laywers (Score:5, Funny)

    by NETHED ( 258016 ) on Thursday November 04, 2004 @10:16PM (#10731010) Homepage
    You know, I think the Lawyers are on our side FOR ONCE. They are milking SCO dry. Anyway I could contact them so they would have to bill SCO? I know, lets SLASHDOT the Lawyer office, and make sure that they bill SCO.

    Better be quiet, FBI might come knocking (*AGAIN*)

    • Well, they are not really hurting SCO. That was money from elsewhere. But the lawsuit and McBrides antics have killed SCO.

      But I wonder, are there groups here that might wish to do some lawsuits against SCO? That will drain this money faster, even though I think they only have to last until MS comes out with Longhorn

    • Re:God Bless The Laywers (Score:5, Interesting)

      by yog ( 19073 ) on Thursday November 04, 2004 @10:52PM (#10731226) Homepage Journal
      I know you're kidding but it's still a sad commentary on the way the legal profession has undermined the economy.

      Those lawyers have done nothing for SCO and yet they have greatly enriched themselves from shareholders' money. Granted some of that money came from outfits with questionable morals themselves, like The Canopy Group, but that's also money that could have been invested in hiring software people to help improve their products and their competitive position in the market. SCO was once a reputable company, after all.

      Here's a question for some legal expert. Since Boies et al were paid in stock a while back, they are now a major stockholder in SCO, 25% as I recall. I wonder if they can therefore be sued by any parties who have a grievance against SCO? Like practically the entire open source development community, IBM, Redhat, Novell, etc.

      I have personal experience with the damage they have caused; I have dealt with people in the embedded market who were avoiding embedded Linux because of "the lawsuit". The very lawyers who represent this rogue company are its owners; they are purely and openly in it for the profit regardless of right and wrong.

      • Re:God Bless The Laywers (Score:5, Insightful)

        by superpulpsicle ( 533373 ) on Thursday November 04, 2004 @11:33PM (#10731482)
        How the hell do you turn all this legal negativity into a product or service to sell? Amazingly SCO lawyers did it! Go to http://www.sco.com, under product & services you see

        "SCO vs. IBM"
        "SCO vs. Autozone"
        "SCO vs. Novell"

        You know your lawyers are good when they have convinced the webmaster to advertise their lawsuits just like any other products.

        • Re:God Bless The Laywers (Score:3, Insightful)

          by Surazal ( 729 )
          Sure the lawyers may be competent to some degree. However, there's some issues with the abilities of the CEO, the software engineers, the managers, and the rest of the disillusioned employees of the poor company.

          Good lawyers. Yup. That's about all there is to SCO.

          *Ahem* maybe

      • Re:God Bless The Laywers (Score:5, Insightful)

        by rkent ( 73434 ) <rkent@post.ha r v a r d . edu> on Thursday November 04, 2004 @11:37PM (#10731495)
        I know you're kidding but it's still a sad commentary on the way the legal profession has undermined the economy. Those lawyers have done nothing for SCO and yet they have greatly enriched themselves from shareholders' money.

        And who do you blame for this? The first response to jump to mind should be "whatever jackass decided to pay the lawyers so much for such a hopeless lawsuit". An old saw in the legal profession is that the reason lawyers are such assholes, is that clients are such assholes (see my profile for more about my stake in the whole debate). A lawyer is the agent of his client's interests in the legal realm; simply that and nothing more.

        Here's a question for some legal expert. Since Boies et al were paid in stock a while back, they are now a major stockholder in SCO, 25% as I recall. I wonder if they can therefore be sued by any parties who have a grievance against SCO?

        No. As another poster said in this thread, the very point of setting up a corporation is to establish a firewall for legal liability. There are a couple of recourses, though:

        1) If you think the lawsuit is truly malicious and has no plausible basis in fact, you could sue SCO et al for bringing a frivolous suit, but you would have to have standing (i.e., actually be injured yourself). You could accomplish that several ways, but being an IBM principal or employee, or someone else whose livelihood "depends" on Linux would be a good start.

        2) If you are a shareholder of SCO, you could bring an action against the board of directors, personally as individuals and in their role as directors, and probably McBride and other "wayward" executives. The basis for this would be that the management of SCO is doing things that are actually against its shareholders' best interests (as confirmed by the miserable performance of SCO stock), and thus violating securities regulations.

        See how it always comes back to the company, not the lawyers? It's because they can only be as mean as SCO tells them to be. Actually, I'm kind of surprised that someone hasn't tried #2 yet; I guess there's always the hypothetical possibility they'll prevail and make some money, but it seems much more likely that they're tilting at windmills and wasting money that would be much better spent on, oh, R&D or something.

        • Re:God Bless The Laywers (Score:4, Funny)

          by Lord_Dweomer ( 648696 ) on Friday November 05, 2004 @02:25AM (#10732329) Homepage
          "2) If you are a shareholder of SCO, you could bring an action against the board of directors, personally as individuals and in their role as directors, and probably McBride and other "wayward" executives. The basis for this would be that the management of SCO is doing things that are actually against its shareholders' best interests (as confirmed by the miserable performance of SCO stock), and thus violating securities regulations."

          So let me get this straight, all you would need to do to fit this category is buy a single share of SCO stock? Hmmm......lets see.....

          One share of SCOX - $3.50
          Price of litigation - $0.00 (contingency basis)
          Going down in history as the geek who finally called SCO on their shit, and got its execs put behind bars? Priceless.

          • I highly doubt that you can find an attorney to take your case on contingency on the basis of one share for which you paid $3.50. I'm not sure what sort of damages you're expecting to collect, but if the stock dropped to $0.00, you'd at best be able to collect $3.50.

            That's even if you actually had a legitimate case. See this post [slashdot.org] as to why I think you wouldn't.

        • A lawyer is the agent of his client's interests in the legal realm; simply that and nothing more.

          That's akin to saying soldiers who commit war crimes are just agents of the Gov't. Sure, legally that may be true, but doing something morally reprehensible just because someone's paying you/ordering you still makes you morally bankrupt. More so for Lawyers, since they don't face face anything worse than losing a client by saying no.

          Better example: Doctors who perform dangerous and unnecessary surgery at t

        • Re:God Bless The Laywers (Score:4, Interesting)

          by Ohreally_factor ( 593551 ) on Friday November 05, 2004 @02:59AM (#10732432) Journal
          Good reply. I couldn't have explained it better.

          As far as #2 goes, Actually, I'm kind of surprised that someone hasn't tried #2 yet

          the share price of SCOX [fool.com] is still higher than it was pre-litigation. So Darl has actually increased shareholder value since the days before litigation. Anyone who bought after the start of litigation was buying into "litigation as business model", and has no leg to stand on, regardless of whether they got in early and cheap or too late and when the stock was at it's peak.

          What needs to happen, and probably won't (due to an underfunded SEC and a look-the-other-way Justice Dept.), is an investigation of stock manipulation by Canopy Group as well as an investigation of the Microsoft connection.

          SCOG was already a soon-to-be dead company, before they took on IBM. If anything, Darl has managed to keep SCOG alive, and for a while, with an impressive stock price. I'm sure he has made Ralph Yarro very happy, and that's the only shareholder he need ever answer to.
      • It's all part of the strategy.

        It's obvious to everyone that the lawyers have done nothing for SCO. There's been claim after ludicrous claim, sure, but sweet zombie jesus, they are insane claims!

        If the legal system actually, amazingly, stupidily buys-in to these insane claims, then SCO wins bigtime.

        And if the legal system rejects those claims, saying in effect, "sweet zombie jesus, those claims are insane, guys!" then SCO turns around and sues its lawyers, claiming that SCO was an unfit client, obviousl

      • Those lawyers have done nothing for SCO and yet they have greatly enriched themselves from shareholders' money.

        They have been asked to do things and given money for it. It may not be in the intrests of the shareholders at all - but the CEO and not the legal team he has hired (including giving vast amounts of SCO money to his brother) is fully responsible. If you instigate silly court actions, you need to pay someone to carry them out. Personally I think it is all a con - share pumping and funnelling as m

      • Those lawyers have done nothing for SCO and yet they have greatly enriched themselves from shareholders' money. Granted some of that money came from outfits with questionable morals themselves, like The Canopy Group, but that's also money that could have been invested in hiring software people to help improve their products and their competitive position in the market. SCO was once a reputable company, after all.

        I'm guessing the lawyers are in the same position a coder or a webmaster is in when their cl

      • Source of cash: Baystar, MS and Sun (Score:4, Interesting)

        by linuxguy ( 98493 ) on Friday November 05, 2004 @03:40AM (#10732556) Homepage
        > but that's also money that could have been invested in hiring software people to help improve their products

        Most of the new money came to SCO from Baystar, Microsoft and Sun. I believe all 3 of these wanted SCO to put the hurt on IBM and Linux. None of these companies wanted SCO to develop any products. Baystar actually said it in no uncertain terms in several interviews they did.

        > Here's a question for some legal expert. Since Boies et al were paid in stock a while back, they are now a major stockholder in SCO...

        This was the plan but it never did happen this way. SCO ended up paying ~ $8mil. cash. We dont know why the lawyers did not want stock anymore. Maybe because they realized it was worth less than toilet paper in the end.

        Funny thing is last year when Boies agreed to be paid in stock (it was flying high then) he said in the investor conference call that getting paid in stock is a bit unusual but they do it when they are confident of the direction of the company.

        I wonder what changed?
    • I wonder if this is a neat way of siphoning dollars into the Darl Family Trust? It has been obvious for a while that Darl has no interest in making money from selling software, so what angle are they playing?

  • So where's the rest going? (Score:5, Interesting)

    by tomhudson ( 43916 ) <barbara.hudson@b ... m ['son' in gap]> on Thursday November 04, 2004 @10:17PM (#10731017) Journal
    From the article:
    SCO Group said it paid its attorneys roughly $12.6 million under the agreement for outstanding legal fees and expenses. For future legal fees, the company is to pay a total of $12 million plus contingency fees, it said.
    Okay, that gives a total of $24.6 million. Which leaves $6.4 million unaccounted for. Or is this what McBride is going to have SCO pay Kevin?
    • Which leaves $6.4 million unaccounted for.
      I bet it's set aside for things like filing fees, court costs, contempt fines, brib... er, inversigations. Don't forget that The State always gets it's share.
    • Something else I saw had mention of $5M for expert witnesses. With contingency, that might come to $6.4M (or court fees as another poster mentions).

  • Kevin McBride, WTF? (Score:5, Interesting)

    by mr.henry ( 618818 ) * on Thursday November 04, 2004 @10:18PM (#10731023) Journal
    Is he related to Darl?

  • Cap (Score:5, Funny)

    by tuxter ( 809927 ) on Thursday November 04, 2004 @10:18PM (#10731028) Journal
    Executioner puts cap on Darl McBride's head before throwing the switch......

  • Planning for the Countersuit (Score:5, Funny)

    by Magickcat ( 768797 ) on Thursday November 04, 2004 @10:19PM (#10731030)
    After all, they need to save their cash for the money they'll loose when it comes to the countersuits after they loose. All in all, it's great to see SCO planning ahead.

    I want first dibs on an official SCO ergonomic chair when the sell off comes around.

  • like deja vu al over again (Score:5, Informative)

    by Fishstick ( 150821 ) on Thursday November 04, 2004 @10:21PM (#10731042) Journal
    SCO Caps Legal Expenses At $31 Million [slashdot.org]
    Posted by timothy on Wednesday September 01, @10:08AM
    from the nice-prime-number-of-millions dept.

  • Welcome to September (Score:5, Informative)

    by pez ( 54 ) * on Thursday November 04, 2004 @10:22PM (#10731043) Journal
    News.com story [com.com]

    • Re:Welcome to September (Score:2, Informative)

      by Anonymous Coward
      It has been pointed below that while September story talks about intent, this is an actual agreement.

  • Math time! (Score:5, Interesting)

    by Lord_Slepnir ( 585350 ) on Thursday November 04, 2004 @10:22PM (#10731051) Journal
    Alright, so this crap has been going on for about 18 months now. A bit longer, but let's just say 18 for a round number. That has cost them $12 million. Thier cap is $31 million. 31 / 12 = 2.58. Now we multiply that by how long they've done this, so 2.58 * 18 = 46.5 months, or a little over 2 more years, assuming they keep spending the way they are now

    This is less than encouraging

    • Re:Math time! (Score:5, Informative)

      by InfiniteWisdom ( 530090 ) on Thursday November 04, 2004 @10:57PM (#10731266) Homepage
      Not quite....they have reached an agreement with the lawfrm to cap their bill at 31m. Not that they will fire their attorneys and call it quits once the bill hits 31m. Their attorneys may get a little less enthusiastic once they hit the cap, but the litigation itself will continue.
      • I don't think SCO has the cash flow to drag this out much longer. Remember they have the Novell case and the RedHat case pending as well. I seem to recall over at Groklaw (http://www.groklaw.net)that somone did the math which showed at the rate they are going with NEGATIVE net income, plus legal expenses they could hold out around 16 months with the cash they have on the books. And that was about 4 months ago. Even when they go "tits up" the legal cases will continue. If you really want deep insight into S

  • It sucks to be Boies (Score:3, Interesting)

    by GQuon ( 643387 ) on Thursday November 04, 2004 @10:23PM (#10731053) Journal
    It really sucks to be Boies. He, and the snide side of my personality was looking forward to weeks and weeks of election litigation. And now this SCO deal is failing.
    Oh, well. At least the lawyers got paid.

  • Linux is not relevant to this - two man scam (Score:5, Interesting)

    by dbIII ( 701233 ) on Thursday November 04, 2004 @10:28PM (#10731089)
    It may as well have been some secret snake oil formula at stake. I see the whole thing of the CEO of a small company setting up an unwinnable court case against IBM as a way to funnel funds into the family pockets. Stay tuned for SCO to implode and Darl to sue for what he can get from it's smoking corpse. If legal dogs chase, Darl will simply funnel the funds somewhere inaccessable, pretend he is bankrupt, and blame it all on those kids and their darn penguin destroying the American way.
  • SCO does not put a cap on crap!

    Oh Well Darl McBride in his role as the Snidely Whiplash of the tech world has provided hours of entertainment. Can't wait for the ending....

  • For those of you keeping track at home... (Score:2, Informative)

    by Anonymous Coward
    Insider trades at SCOX:

    10/12/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 88,580 Open Market Sale proceeds of $314,280.59

    10/05/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 59,865 Open Market Sale proceeds of $215,714.00

    10/04/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Class of Security 90,135 Open Market Sale proceeds of $326,372.70

    9/29/04 BAYSTAR CAPITAL II L P Beneficial Owner of more than 10% of a Cl

  • Wow. (Score:5, Insightful)

    by philovivero ( 321158 ) on Thursday November 04, 2004 @10:30PM (#10731110) Homepage Journal
    I thought SCO were a bunch of scam artists. Looks like the lawyers are the ones running the scam. $31 million for a clearly fraudulent case. Nice.

    Surely it must be hard for these guys to go home and sleep at night?
    • Oh! Ha ha. Silly me. The SCO scammers *ARE* the lawyer scammers!
      The company already paid $12 million to Boies Schiller & Flexner LLP, Kevin McBride and Berger Singerman, which provide legal services to the company.
      No, no. It could be coincidence. If it was Korl McBride or Keveryl McBride then it'd be undeniable proof. But Kevin McBride may be a perfectly scummy non-SCO-related lawyer.

      • Re:Wow. (Score:3, Informative)

        by mlyle ( 148697 )
        No, Kevin McBride is Darl's brother:

        CRN's top 25 execs of 2003 [crn.com]:

        His brother, Kevin McBride, says the boys were also taught how to shoot. "We were taught to protect ourselves and what was ours at a very early age and started carrying guns for hunting when we were very young," Kevin says.

    • Re:Wow. (Score:5, Funny)

      by evilroot ( 156363 ) on Thursday November 04, 2004 @10:53PM (#10731236)
      Are you kidding? I know if it were me I wouldn't lose a minute of sleep for taking large amounts of money from SCO! And I have MORALS!

    • Re:Wow. (Score:3, Funny)

      by ATomkins ( 564078 )
      Surely it must be hard for these guys to go home and sleep at night?
      I doubt it; not while being cushioned by huge piles of money, surrounded by many beautiful women.
    • Yeah, all that money stuff in their matresses must not be good for the back, huh. :)

    • Re:Wow. (Score:3, Funny)

      by Anonymous Coward
      A bed of cash isn't as comfortable as it sounds. Every morning you wake up with a few Ben Franklins in your butt crack. There's just some places Ben Franklin doesn't belong.

      Sincerely,
      Boies Schiller

  • In Other News... (Score:4, Funny)

    by Kurt Wall ( 677000 ) on Thursday November 04, 2004 @10:35PM (#10731132) Homepage

    Darl McBride announced today that he would sell licenses to use his face on Halloween masks. The licenses will reportedly be available for $695.00 and come with a guarantee that you won't be sued.

    ...until he changes his mind.

  • Yikes (Score:5, Funny)

    by Anonymous Coward on Thursday November 04, 2004 @10:38PM (#10731147)
    Why do I keep seeing the Disney logo in that caldera logo? why doesnt Mickey Mouse sue them into oblivion?

  • Suing IBM is 'patently' insane (Score:5, Funny)

    by gelfling ( 6534 ) on Thursday November 04, 2004 @10:45PM (#10731186) Homepage Journal
    IBM has over 400 people on the payroll who do nothing but look at other companies to sue for possible intellectual property infringement.

    IBM fought the United States government for more than 20 fucking years to a stalemate in their antitrust case.

    Taking on IBM is a little more crazy than taking on entire Chinese Army.

    • Re:Suing IBM is 'patently' insane (Score:5, Insightful)

      by Anonymous Coward on Thursday November 04, 2004 @11:22PM (#10731402)
      Taking on IBM is a little more crazy than taking on entire Chinese Army.

      Yeah, no kidding.

      The Chinese army has nukes, but nobody will use nukes because they destroy so many lives and businesses, wipe out economies, and make areas uninhabitable for decades.

      IBM has lawyers, and everyone uses lawyers as a first strike, despite the fact that they destroy so many lives and businesses, wipe out economies, and make areas uninhabitable for decades.

      The question is, is it better to elect a rich businessman from a large multinational, or a lawyer? I would have rather voted for a plumber, they take all your money, but at least leave you with a working shitter.

  • Capping the fees means Novell/SuSE wins (Score:3, Insightful)

    by postbigbang ( 761081 ) on Thursday November 04, 2004 @10:52PM (#10731229)
    If SCOG can't get adequate representation because their counsel is distracted now that their fees aren't going to be paid, then an avalanche happens. The SCOG v Novell litigation surrounding copyright title slander goes in favor of Novell. Novell, ostensible owner of the copyright can then get sued by SCO, but there's a cap now and Novell has lots of cash remaining to burn on litigation. It also sets a precedent that Novell owns Unix copyrights. They manifest themselves through a fairly loyal GPL/FOSS follower, SuSE. Ipso facto, Novell faces down SCOG, Microsoft and Sun. Then they roll out the serious Microsoft busters in the form of ways to do FOSS-based services from the top down. Noorda will finally smile.

  • 31 million eh? (Score:5, Informative)

    by deek ( 22697 ) * on Thursday November 04, 2004 @10:52PM (#10731233) Homepage Journal
    And afterwards, Boies et al will be able to buy SCO outright, for all it will be worth. With plenty of change left over.
    • And afterwards, Boies et al will be able to buy SCO outright, for all it will be worth. With plenty of change left over.

      Do you really think anyone is going to be paid? Well, the unlimited Linux license perk will work. Works for me.

  • easy way out (Score:5, Interesting)

    by sPaKr ( 116314 ) on Thursday November 04, 2004 @11:02PM (#10731296)
    Any one else wonder if SCO is just setting themselfs an easy out later? I mean when this doesnt go SCOs way and they hit the cap all Darl has to say is 'We would have won if we had more time and money' then he keeps the shadow over linux serving his Micky$oft masters. Since this was never about making money only hurting linux, I suspect this is a winning stratgy in the end. All MS has to say is point to some shlep that buys up the reminants of SCO and say they can sue you, this was never settled. Lets hope SCO implodes and someone like IBM or Novell buys them for pennies on the dollar and kills this lawsuit business.

  • on top of it all, SCO is nepotistic (Score:5, Informative)

    by MMHere ( 145618 ) on Thursday November 04, 2004 @11:06PM (#10731321)
    To top it all off, SCO is nepotistic. [reference.com]

    The above mentioned, Kevin McBride, is brother to Darl McBride acording to this Computer Shopper News article. [computershopper.co.uk]

    So even if Darl fails in his quest to sue every sentient being (and SCO dies), he will have kept lots of money in the family.

  • Time == $$$$ (Score:5, Informative)

    by hwestiii ( 11787 ) on Thursday November 04, 2004 @11:13PM (#10731366) Homepage
    So this can go on approximately 1 1/2 times as long as it has so far? That's good news?

  • A cap? Don't they mean a cork? (Score:4, Funny)

    by AndroidCat ( 229562 ) on Thursday November 04, 2004 @11:17PM (#10731381) Homepage
    "I'll never forget the look on that poor monkey's face as it tried to put that cork back in." (from that pig joke)

  • Cent of Blood in the Water (Score:4, Interesting)

    by iamlucky13 ( 795185 ) on Thursday November 04, 2004 @11:20PM (#10731394)
    I am continuously amazed at the ability of lawyers to run up huge bills. I've heard $200/hour quoted somewhere as an average, so I'll run with that, even though I know many charge way more. Someone else quoted 18 months of activity in the discussion above. I skipped a lot of assumptions, but that translates to about 60000 hours, which means 19 lawyers working 40 hour weeks, raking in about $600000 each ($400 K/year).

    Does anyone know the actual number of lawyers involved or their rates and can anyone enlighten me about what other costs SCO is likely including in their figure of $12 million spent so far?

    • I am continuously amazed at the ability of lawyers to run up huge bills. I've heard $200/hour quoted somewhere as an average, so I'll run with that, even though I know many charge way more.

      For criminal law, the average fee seems to be about $125/hour [1 [appealsbyjohnhall.com],2 [state.il.us]]

      For civil law, the average fee seems to be higher, about $150/hour [3 [state.il.us]]

      You are off by at least $50/hour for a fee.

      Now consider -- in many of the high-priced cases, you aren't paying for a lawyer to sit around all day playing golf. That fee go

  • Actually, SCOX was in the $2 territory, but they've miraculously bounced back up to $3.50 over the last couple of days. No, I can't understand it. Makes as much sense as the recent election.

    40% "none of the above"
    30% Dubya
    15% Not-Bush
    14% Kerry

    (Okay, guessing on the split, but "none of the above" definitely won again.)

  • Very Misleading Statements From SCO (Score:4, Interesting)

    by linuxguy ( 98493 ) on Thursday November 04, 2004 @11:59PM (#10731632) Homepage
    [From Yahoo Finance Posting by stdsoft0]:

    Investors need to be very, very careful. The wording of the legal fee "cap" announcement is highly deceptive.

    While it may sound good to the uninformed, the legal fee "cap" does nothing practical to help SCO with the legal expense problem. Taken together, the following statements from the 8-K filing are HIGHLY misleading:

    Statement 1:
    "For future legal fees, the Engagement Agreement will require SCO to pay to the Law Firms $2.0 million per quarter for each successive quarter beginning September 1, 2004 and ending December 1, 2005..."

    Statement 2:
    "SCO's purpose in entering into the Engagement Agreement was to limit the cash expenditures needed to pursue the SCO Litigation to approximately $31 million, until the litigation with IBM concludes."

    Taken together, SCO is saying that the litigation with IBM will end by December 2005. The problem, though, is that only the FIRST round of court action with IBM will have concluded by 12/2005. For the sake of argument, consider the highly unlikely event that SCO wins some sort of favorable decision. The appellate process will have only just begun. The odds of a decision being sufficiently favorable to warrant additional equity investment is highly unlikely, and SCO will be out of cash. Further, SCO is likely to still be defending against counter-claims.

  • Scam (Score:3, Interesting)

    by attobyte ( 20206 ) on Friday November 05, 2004 @12:06AM (#10731665)
    I bet they had this planned from the beginning. The banks that loaned them the money must feel like a a$$.
    • They gave them our money (in my case literally since I'm a RBC customer). SCO didn't scam anything our of IBM, big deal - the loss is the cost of doing business. Seriously, did you ever think about the type of jackass in the bank who approved investing in SCO? Talk about gross incompetence.

  • Effects on share price (Score:3, Interesting)

    by siskbc ( 598067 ) on Friday November 05, 2004 @12:13AM (#10731697) Homepage
    So anyone know why this puts their share price http://finance.yahoo.com/q/bc?s=SCOX&t=3m&l=off&z= m&q=l&c= [yahoo.com] up 15% on the day and it looks like 25% on the week? Seems to me someone out there thinks they could still make money if they'd just sell some of their great software instead of wasting their money on this lawsuit. *snicker*
  • If SCO had any sense they'd put a cap in their lawyers.

  • Does it matter anymore? (Score:4, Interesting)

    by theolein ( 316044 ) on Friday November 05, 2004 @01:12AM (#10732050) Journal
    I've noticed this SCO litigation story not even making major news headlines anymore, and even here on slashdot the interest is tailing off. SCO is not going to win their case. That is fairly certain by now unless certain, uhm, vested interests *cough*new reelected friends of microsoft*cough* bring their weight to bare on the legal system. But I don't think that's going to happen, and if it does happen, expect many tech companies to simply pull up stakes and move outside the US.

    In the time being, Linux is continuing to gain corporate and government mindshare all over the world. I don't think that all that many people really listen to MS paid for FUD tactics. The rate of Linux uptake speaks for itself.

  • Instead of putting a cap on legal expenses.... (Score:3, Funny)

    by Radiantal ( 302895 ) on Friday November 05, 2004 @03:40AM (#10732555)
    Maybe someone should put a "cap" in SCO's ass instead!

  • Lawyers are just corporate soldiers (Score:3, Insightful)

    by panurge ( 573432 ) on Friday November 05, 2004 @08:16AM (#10733272)
    Indeed, don't blame the lawyers, blame the legal system and the clients. Agreed, many lawyers are well paid (but not all) but in a way they have an impossible job. They have to represent the interests of rampant egomaniacs who are born liars, in a legal system produced ultimately by politicians with the attention span of a gnat and a desire to stay in power. It's a bit like being a soldier with the main risk being heart attack, nervous breakdown, marital breakdown, rather than getting shot in the head.

    Before deciding to become a lawyer, ask yourself the question: given how I feel about _users_, how would I feel about working with clients who are the kind of people who end up in expensive lawsuits and so, for the most part, are not friendly, cooperative individuals who get on well with other people. And demand that you listen to their idiotic ramblings and read their pathetic documents and, instead of laughing at them, take them seriously because they are paying? Because, don't forget, to be a hotshot lawyer you have big outgoings and you have to keep the cash flowing. And telling Mr. Moneybags to anglo saxon sexual intercourse(1) off because his case is piss(2) poor will soon result in a negative cashflow situation. So please, focus your ire on the honest businessmen of SCO who are spending the company funds on this stuff.

    (1) Now the Christian Right is in charge, I think we need to be careful about using naughty words.
    (2)But not when it comes to words from the Bible, of course.

  • I spoke with David Boies yesterday (Score:5, Informative)

    by tuxlove ( 316502 ) on Friday November 05, 2004 @09:17AM (#10733451)
    Yesterday David Boies (SCO's lead attorney) was on the Ronn Owens show on KGO-AM, taking calls from listeners. The topic was supposed to be his new book, but I couldn't pass up the opportunity to hear his justification for his horrible work with SCO. So I called and asked him.

    He seemed a little daunted by my opening, in which I told him I had lost all respect for him. When faced with the question of "Why!?", he predictably said "everyone's entitled to a defense". Never mind that SCO's on the *offense*... His justification basically boiled down to the simple, "the courts will decide if SCO's claims are legitimate". In other words, he doesn't give a shit. He just wants the money, win or lose.

    I have worked with attorneys before, more than once, and the ones I worked with didn't want a case unless it seemed somewhat meaningful, and definitely very winnable. The money was important, but reputation was moreso. Bad reputation translates to less money for the shortsighted, quite often.

    I guess this simply shows he's a whore, moreso than most attorneys.

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