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US Trustee Asks To Send SCO Into Chapter 7 259

Posted by kdawson
from the long-dark-teatime-drawing-to-a-close dept.
Several readers including Pop69 inform us that the US Trustee's office has asked to convert SCO's Chapter 11 bankruptcy to Chapter 7 — a.k.a. liquidation. Groklaw has the text of the filing: "...not only is there no reasonable chance of 'rehabilitation' in these cases, the Debtors have tried — and failed — to liquidate their business in chapter 11."
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US Trustee Asks To Send SCO Into Chapter 7

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  • Re:Liquify what? (Score:5, Informative)

    by nairnr (314138) on Tuesday May 05, 2009 @11:47PM (#27841613)
    Everything! Furniture, chairs, computers, bookcases. You name it, it goes. This is not so anyone can reorganize it into anything meaningful, this is so creditors get every last stinking dime out of them.

    If you have ever been to a liquidation of a store, after they sell you what is left on the racks, they sell you the racks,display cases, lights, left over toilet paper...

  • Re:I wonder... (Score:3, Informative)

    by Brian Gordon (987471) on Wednesday May 06, 2009 @12:49AM (#27841969)
    Ubuntu does not break even. Canonical is still burning through Shuttleworth's money, although it's starting to fight its way against its downward spiral and could become profitable in the future. It still has plenty of assets though.
  • by shentino (1139071) on Wednesday May 06, 2009 @12:49AM (#27841971)

    According to Groklaw, the motion has been granted and Judge Gross has ordered the conversion to Chapter 7.

    This is way beyond ding dong the witch is dead.

    This is "hail dorothy, the wicked witch is dead!" level stuff.

    That hissing you hear is the wicked witch melting after Judge Gross dumped a bucket of water on SCO.

  • by shentino (1139071) on Wednesday May 06, 2009 @12:52AM (#27841987)

    My mistake, Gross hasn't signed the second pdf yet.

  • Re:I wonder... (Score:2, Informative)

    by Anonymous Coward on Wednesday May 06, 2009 @01:54AM (#27842301)

    For RedHat, profit to revenue is about 14% compared to Oracle which is 25% and Microsoft at 29%

    It seems to be difficult for people to understand Red Hat's business model, they are not a software company like Oracle or Microsoft. Oracle and Microsoft provide both software licensing and service, Red Hat provides service. The profit margins on software licensing are insanely high for any mass deployed application as the reproduction cost is virtually zero. Red Hat does not license software so they do not benefit from the fake limited supply created by closed source licensing. Comparing the margins is, well, dumb.

    2 of the 3 top linux distros are either not making or just making a profit

    14% is far from barely making a profit, Novell's profits were crap long before the SuSE purchase as Netware is a dead end. Good luck in extracting linux specific details from Novell's SEC filings, the last time I checked they buried the results in their dead end Netware product. As you already noted Ubuntu is private so their margins are unknown.

    As far as Caldera, a.k.a. The SCO Group, goes they were seeing the beginnings of the same double digit revenue growth that Red Hat experienced prior to the suicide attacks. The purchase of the SCO Unix business brought on a large existing market to Caldera but just like Netware a dead end product line. It seems there was an opportunity to take advantage of that market to further sell Caldera linux and compete with Red Hat but instead they went for the get rich quick lottery ticket with a suicide lawsuit against IBM.

  • by Todd Knarr (15451) on Wednesday May 06, 2009 @02:04AM (#27842351) Homepage

    No, he didn't. He found he could rule on summary judgement that SCO owed money, but exactly how much involved questions of fact that he had to defer to the trial. Since he couldn't pin down an amount, he couldn't order a constructive trust until after the trial. And of course SCO filed for bankruptcy the day before the trial was to start. Later the bankruptcy judge unstayed the case as far as determining the amount SCO owed went, and Judge Kimball finally ruled on the matter last August.

    Novell did ask during the bankruptcy proceedings to have the money put into a trust, and SCO's attorneys argued that wasn't neccesary. I expect that'll come back to haunt SCO during the Ch.7 proceedings.

    At this point, though, the big monster in the room isn't Novell, it's IBM. Novell may be PO'd, but IBM... is Darth Vader back before George turned him into a whiny emo kid.

  • by Anonymous Coward on Wednesday May 06, 2009 @02:24AM (#27842445)

    Where do you get that? The hearing didn't even happen yet.

  • Re:Where's Darl now? (Score:3, Informative)

    by evilviper (135110) on Wednesday May 06, 2009 @02:50AM (#27842593) Journal

    Does any still even actively license their craptacular "Unix" from them?

    Damn. How lazy can one person possibly be? You didn't even TRY visiting their website to look at their marketing hype, vis-a-vis SCO Unix market share?

    http://sco.com/products/openserver6/
            * SCO UNIX has more than 40% market share among U.S. pharmacy retailers
            * Six of the top 10 global retailers are SCO UNIX customers
            * Seven of the top 10 U.S. retailers are SCO UNIX customers
            * SCO UNIX runs more than 12,000 McDonald's restaurants worldwide
            * Most voice mail systems run on SCO UNIX
            * SCO UNIX helps run BMW Service Centers
            * SCO UNIX runs 22,000 branches for the Bank of Russia
            * SCO UNIX helps the German train system run on time
            * SCO UNIX runs thousands of locations throughout China for the China Post

  • Re:Where's Darl now? (Score:5, Informative)

    by dbIII (701233) on Wednesday May 06, 2009 @03:26AM (#27842775)
    An important thing to remember is that Darl McBride's brother was one of those lawyers getting truckloads of cash. I still see it as a two man scam where the company was deliberately driven into the brick wall of IBM and then the repair work contracted out to the driver's brother.
  • Re:SCO OWNS LINUX!!! (Score:3, Informative)

    by Opportunist (166417) on Wednesday May 06, 2009 @04:39AM (#27843073)

    Actually, Linux pwned SCO.

    And not even in Soviet Russia.

  • Re:I wonder... (Score:3, Informative)

    by Anne Thwacks (531696) on Wednesday May 06, 2009 @07:11AM (#27843593)
    Sure they were a respected UNIX vendor. They were the only serious choice at one time for Intel,

    No they were not. This is a completely different company who bought the name. You are talking about the Santa Cruz Operation. Their "Unix" was not very good, but it was not likely to be until the invention of the 386, cos the 286 MMU was not up to the job. (Both MMUs were reworks of earlier DEC ones, so experienced Unix users knew what the issues were.)

  • Re:I wonder... (Score:5, Informative)

    by Lorien_the_first_one (1178397) on Wednesday May 06, 2009 @07:29AM (#27843659)
    Your points are well taken. But discovery, months of discovery, showed that there was no stolen code. There were also some other trigger events that eventually released IBM from the partnership (I can't remember all the details, but they include change of ownership, expiration dates, etc.). In the end, there was really no evidence of wrong-doing on the part of IBM. In fact, well before the lawsuits, IBM made many statements of its intentions and followed through with no objection from SCO.

    This is all very well documented at www.groklaw.net and available for your reading.
  • Re:Circuit City (Score:3, Informative)

    by Antique Geekmeister (740220) on Wednesday May 06, 2009 @08:08AM (#27843815)
    Circuit City was mostly an excuse to sell resources at normal prices to suckers. I looked: those "closing" prices were the same as other commercial retailers, with perhaps a 5% discount, at least in my neighborhood.
  • by troll8901 (1397145) <troll8901@gmail.com> on Wednesday May 06, 2009 @09:20AM (#27844527) Journal

    There was a point in time when there was an SCO ... that actually focused on technology. ... They also made some products in their Tarentella line which was a port of the Microsoft SMB stack ...

    I'm pretty sure I misunderstood you, and you knew more than me. But in case there's any confusion:

    • The "old SCO" that produced the Tarentella was renamed to Tarantella, Inc. in 2001, and was bought by Sun Microsystems in 2005.
    • The present "SCO Group" was formerly Caldera, renamed to The SCO Group in 2002.

    I think you're quite right - Caldera simply wanted to use the good "SCO" name for their greedy purposes.

    Credits to schon (31600) for writing an easy-to-understand message.

  • Re:I wonder... (Score:3, Informative)

    by UnknowingFool (672806) on Wednesday May 06, 2009 @10:00AM (#27845037)

    I can understand why SCO sued IBM. IBM, SCO and Sequent got together to work on Project Monterey. SCO's role in that was providing their leading Unix on x86 work. Then the project fell apart, IBM bought Sequent and SCO got nothing for their efforts.

    First of all, Project Monterrey fell apart not because of anything that IBM, Sequent, or SCO did. Project Monterrey fell apart because it relied on the presumption that Intel Itanium would become the defacto and prevalent server CPU. Intel was late and that never happened.

    Second, IBM shared with SCO their work, too. While IBM eventually was able to use some of the work from the project. SCO was never able to find a use. That is not IBM's fault that SCO could not because nothing was stopping them.

    Then all of a sudden, IBM puts more effort into Linux, an alternate Unix like OS that can run on x86.

    IBM was able to see Linux was the server OS that was going to be the next big thing. SCO did not. Again, that's not IBM's fault that IBM's crystal ball was better.

    If you were SCO, had spent a lot of time with IBM showing them your Unix/x86 secrets, then they ditch your work and all of a sudden put a big push into a competing unix like os on x86 that could benefit from the knowledge you shared with IBM, you'd probably want to sue too. I would.

    That's a biased and unsubstantiated view of what happened. SCO, Sequent, and IBM got together figuring a single Unix spec on Itanium would make them all money. Unfortunately no other vendors got on board so no drivers were supported. However, at the same time, a free OS named Linux was gaining traction. IBM seeing the writing on the wall and having lost a lot of money in the project, decided to kill it. They all shared technology which each of them could use. IBM found a use for some of their technology in their own projects. However none of the technology went directly to Linux, SCO just thought it did. Also it turns out SCO was laying claim to all of Unix which they did not have rights.

    Maybe they did, maybe they didn't, but you'd have to go to trial to get to the bottom of it.

    No you don't. Most of the time when there are questions about copyrights, patents, etc, both sides get together first and see if there is a case. Most of the time the dispute is resolved without a lawsuit because lawsuits are expensive. In this case, not only did SCO refuse to meet with IBM, they have refused to show IBM without being ordered why they even sued IBM. In the end, they had nothing. But an internal audit in 2001, SCO hired an outside consultant that told them there was no SCO code in Linux.

  • by Todd Knarr (15451) on Wednesday May 06, 2009 @12:37PM (#27847389) Homepage

    You said the magic word: reorganization. The reason the US Trustee gave for asking for conversion to Chapter 7 or dismissal was that SCO wasn't making any progress towards reorganizing, they had no reasonable prospects for ever being able to reorganize and turn themselves into a going concern again, and all they were doing was wasting what money they had left to pay creditors with. Chapter 11 isn't intended to be a permanent shield against creditors, and the Trustee is saying SCO isn't supposed to use it as such.

  • Re:Ahem. Ahem. (Score:5, Informative)

    by Grishnakh (216268) on Wednesday May 06, 2009 @02:57PM (#27849631)

    The sad thing is that once upon a time, they provided a Unix variant (Xenix),

    No, they didn't. That was the Santa Cruz Operation, or SCO, of Santa Cruz California, which did that. They are now named "Tarantella", and are still in business as far as I know.

    The company in this article is "The SCO Group", of Linden, Utah, formerly named "Caldera" (of Linux fame).

    Caldera bought some assets from old-SCO, renamed themselves "The SCO Group", and that's who they are now. They have never been the same company as the one that made Xenix, or had any of the same people.

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