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The Courts Government Novell Operating Systems Software The Almighty Buck Unix News Linux

SCO Proposes Sale of Assets To Continue Litigation 290

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

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  • Re:Wow. Just wow. (Score:2, Insightful)

    by Anonymous Coward on Sunday January 11, 2009 @02:22PM (#26408355)

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

  • by rs232 (849320) on Sunday January 11, 2009 @02:23PM (#26408365)
    'One goal of this approach is to separate the legal defence of its intellectual property from its core product business'

    Then why not drop the case and focus more fully on your 'core product business'
  • by symbolset (646467) on Sunday January 11, 2009 @02:23PM (#26408367) Journal

    They want to pay Novell in worthless stock.

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

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

  • by plasmacutter (901737) on Sunday January 11, 2009 @02:24PM (#26408373)

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

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

  • by RicardoGCE (1173519) on Sunday January 11, 2009 @02:25PM (#26408379)
    They're finally owning up to what we've known all along: SCO's business is litigation. Server software? Pffft.

    I love the fact that they're willing to sell the very products they're supposedly protecting from unauthorized use of "their" code, just to keep the legal fight going.
  • What products? (Score:5, Insightful)

    by Jailbrekr (73837) <jailbrekr@digitaladdiction.net> on Sunday January 11, 2009 @02:27PM (#26408391) Homepage

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

  • Re:Wow. Just wow. (Score:5, Insightful)

    by Sponge Bath (413667) on Sunday January 11, 2009 @02:31PM (#26408415)

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

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

  • Captain Ahab (Score:2, Insightful)

    by jjmcwill (3739) on Sunday January 11, 2009 @02:35PM (#26408443) Homepage

    Seriously, does this not seem like Darl McBride is so obsessed with going after "the great white whale" that it's all he can think about, to the exclusion of everything else?

    Where and when does it all end?

  • by Anonymous Coward on Sunday January 11, 2009 @02:36PM (#26408455)

    1. Sell off your (eventually) worthless core business
    2. Continue paying yourself a huge salary
    3. Lose the case, the company goes bankrupt. Core business loses all value.
    4. Use your previous huge salary to retire
    5. Everyone else gets nothing

  • by Trekologer (86619) <adb AT trekologer DOT net> on Sunday January 11, 2009 @02:42PM (#26408499) Homepage

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

  • Re:Wow. Just wow. (Score:4, Insightful)

    by sumdumass (711423) on Sunday January 11, 2009 @02:45PM (#26408523) Journal

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

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

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

  • by dustwun (662589) on Sunday January 11, 2009 @02:47PM (#26408541) Homepage

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

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

  • by Anonymous Coward on Sunday January 11, 2009 @02:49PM (#26408553)

    I suppose Daryl thinks that when he wins (he clearly can't imagine any other outcome, no matter of often his lawyers get their asses kicked in court) he can just buy the software assets back. Of course, when he loses SCO will be even more screwed than before (which I didn't think was even possible before today).

  • by RichMan (8097) on Sunday January 11, 2009 @02:53PM (#26408579)

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

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

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

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

  • by RyanFenton (230700) on Sunday January 11, 2009 @02:58PM (#26408613)

    Sure - it's a completely idiotic move, according to logic and ethics. But like watching a video of someone trying to badly imitate an episode of Jackass, there's just something odd about watching the single-minded drive towards something one knows is a stupid idea that oddly reinforces something about the human spirit.

    Why? He knows he's marching towards a given horrible set of outcomes (damaging his own interests) - he knows he's mostly doing it to the entertainment of others - he even knows he's hurting those he works with (and seems to like that idea for some reason) - but through sheer will and bravado, he's picking up that damn skateboard, and he's going to jump all that freeway traffic, despite the fact that a little man just knocked his kneecap out of joint two minutes ago with a hammer.

    Human drive can do so much - it can push us so far from reason that it can flip past tragedy back to comedy, even for 'successful' men like Darl. There's a twisted Catharsis in that - a fact about the human condition that we can use our focus towards any end, to just about any extent.

    It reminds us why self-reflection, observing your own life from different perspectives occasionally can be so important too.

    Ryan Fenton

  • McUnix (Score:5, Insightful)

    by capnkr (1153623) on Sunday January 11, 2009 @03:05PM (#26408669)

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

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

    Heh. :)

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

  • by Forbman (794277) on Sunday January 11, 2009 @03:32PM (#26408895)

    Bernie Madoff allegedly stashing millions of dollars in checks in his desk (and who knows where he's stashed all sorts of $$$ in international accounts), getting ready to send it somewhere where the System can't touch it when all is said and done?

    I would really argue that SCO Group should not be allowed to do this, as it is in essence allowing them to transfer assets out of the company so that they cannot be used to pay the company's legal obligations when all is said and done.

    If you or I do it, say, to shelter/shed/disburse assets prior to a divorce settlement, bankruptcy or other judgment action (i.e., we attempt to shed assets after filing for bankruptcy), we get pilloried.

  • Re:Wow. Just wow. (Score:2, Insightful)

    by Faluzeer (583626) on Sunday January 11, 2009 @03:54PM (#26409113)

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

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


    I hate what tSCOGroup tried to do, I hate the fud that was generated, I hate the lies that were told, however none of things lead me to want those involved to die horrific deaths, instead I want all those involved to suffer to the maximum extent possible under the law...

    I believe that you and the AC you replied to, need to get a sense of perspective, nothing Darl, or anyone else at tSCOGroup has done warrants such deaths. I honestly believe that attitudes such as yours, do as much harm to the Open Source movement as those expressed by Darl and co.

  • by kimvette (919543) on Sunday January 11, 2009 @04:01PM (#26409155) Homepage Journal

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

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

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

    Want to know the saddest part of this?

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

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

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

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

  • by falconwolf (725481) <falconsoaring_20 ... inus threevowels> on Sunday January 11, 2009 @04:22PM (#26409321)

    Perhaps IBM could buy them and write itself an unconditional irrevokable retroactive perpetual license to the products. And release them under GPLv3...

    That would be terrible, least of all for IBM. Between IBM and Novell SCO is on the ropes and it should die. Actually I think an IBM buyout may of been in Darl McBride's and other's mind when they filed their lawsuit against IBM, hoping IBM would offer to buy SCO.


  • Re:Wow. Just wow. (Score:4, Insightful)

    by iNaya (1049686) on Sunday January 11, 2009 @04:33PM (#26409437)
    Why not? Death is the natural state for an organism that is no longer functioning correctly. And it would appear that Darl certainly fits within that category.
  • by theonetruekeebler (60888) on Sunday January 11, 2009 @04:45PM (#26409555) Homepage Journal

    to say there is no UNIX IP shows your lack of imagination.

    IP is not imaginary.

    IP is the epitome of imaginary.

  • Re:Wow. Just wow. (Score:3, Insightful)

    by religious freak (1005821) on Sunday January 11, 2009 @04:51PM (#26409601)
    New tag: whitewhale. That's right Captain Ahab... keep chasing it, there's a chance you might even win - and what a victory it will be.
  • by msobkow (48369) on Sunday January 11, 2009 @05:14PM (#26409803) Homepage Journal

    Just die already, SCO!

  • Re:Wow. Just wow. (Score:4, Insightful)

    by MooUK (905450) on Sunday January 11, 2009 @05:43PM (#26410049)

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

  • by EmbeddedJanitor (597831) on Sunday January 11, 2009 @05:45PM (#26410061)
    SCO's lawyers include Darl's brother, Kevin. Turning SCO's assets into legal fees gets the money out of the company and into the family. At present SCO is dead in the water like a floating wreck. It still has some value on board. This strategy converts some of that into cash which can be trans-shipped into the family as legal fees.
  • Re:Wow. Just wow. (Score:4, Insightful)

    by Faluzeer (583626) on Sunday January 11, 2009 @06:02PM (#26410215)

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


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

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

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

  • by wwwillem (253720) on Sunday January 11, 2009 @06:37PM (#26410473) Homepage

    When was the last time you saw a real grill at McDonalds?

    So your phrase should be "You have to work up to microwave".

  • Re:Wow. Just wow. (Score:3, Insightful)

    by dbIII (701233) on Sunday January 11, 2009 @06:45PM (#26410559)
    Worst CEO, paticularly since a lot of those legal expenses are going to his brother. I've said it before - the whole thing looks like a two man scam where Darl deliberately drove SCO into the brick wall of IBM and took it to his brother for the repair bill.
  • Re:Wow. Just wow. (Score:3, Insightful)

    by HiThere (15173) <(ten.knilhtrae) (ta) (nsxihselrahc)> on Sunday January 11, 2009 @07:41PM (#26411083)

    The SCOX.pk lawsuit has lost all credibility. Even though I do believe that MS once gave them money to pay for this lawsuit (at whose initiative is a good question), I don't believe that this is still of any value to MS, and so more money will be forthcoming only if they have some incriminating evidence on MS.

    Not likely. I think MS knew what kind of slime they were dealing with. Which argues that they initiative came from SCOX. (But it's a ways short of proof.)

  • Re:McUnix (Score:3, Insightful)

    by ucblockhead (63650) on Sunday January 11, 2009 @07:48PM (#26411147) Homepage Journal

    It is very likely that if they don't have source code, there is some sort of agreement that holds the source code in escrow in case the company goes out of business. (I worked for a company that did exactly this.) It is also very likely that there are programmers running around that have left SCO who could be hired as contractors. (This is exactly what I did when I left that company...I became a contractor at one of their customers.)

    They would have no need to actually buy SCO and in fact might be better off if SCO went under.

  • by HiThere (15173) <(ten.knilhtrae) (ta) (nsxihselrahc)> on Sunday January 11, 2009 @08:03PM (#26411289)

    You do realize that so far Darl has has made multiple millions off this? And that nobody has shown any signs of coercing him into paying it back? Last I heard it was asserted that he had transferred some of his real estate into his wife's name so that it would be harder to reclaim, but thus far that has been an action that hasn't been necessary. (OTOH, I don't know how long such an action can be reverted.)

    I'm sure it's been stressful, but no more running a protection racket. And if he can manage to finagle things properly the results will be legally his.

  • Professional guild (Score:4, Insightful)

    by mcrbids (148650) on Monday January 12, 2009 @02:57AM (#26414117) Journal

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

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

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

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

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

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

It is masked but always present. I don't know who built to it. It came before the first kernel.