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SCO Blames Linux For Bankruptcy Filing
Posted by
Zonk
on Tue Sep 18, 2007 02:22 PM
from the comment-write-themselves dept.
from the comment-write-themselves dept.
Stony Stevenson writes "SCO Group CEO Darl McBride is now claiming that competition from Linux was behind the company's filing of Chapter 11 bankruptcy. 'In a court filing in support of SCO's bankruptcy petition, McBride noted that SCO's sales of Unix-based products "have been declining over the past several years." The slump, McBride said, "has been primarily attributable to significant competition from alternative operating systems, including Linux." McBride listed IBM, Red Hat, Microsoft, and Sun Microsystems as distributors of Linux or other software that is "aggressively taking market share away from Unix.""
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Linux: SCO Files for Chapter 11 Bankruptcy 421 comments
Can you say "the SCO, the" in German? writes "Trading of SCO's stock has been halted on news that SCO has filed for Chapter 11 Bankruptcy. This move just so happens to fall on the eve of SCO's trial with Novell. One would think that their prior boasts were mostly bluster, that they believe they have almost no chance of prevailing at trial, and that they're now desperate to protect their executives from SCO's creditors while seeking yet another delay. From the release: 'The SCO Group intends to maintain all normal business operations throughout the bankruptcy proceedings. Subject to court approval, SCO and its subsidiaries will use the cash flow from their consolidated operations to meet their capital needs during the reorganization process. "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."'"
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Novell to SCO - Pay Up 151 comments
gosherm writes with word that, now that the dust is beginning to settle on the long-running SCO case, Novell wants to get paid. Now. They're requesting that the customary stay on SCO's finances (as a result of their bankruptcy) be lifted so that Novell can begin recouping some of its losses from the protracted legal battle. "'We need to adjudicate if this is money owed to Novell or if it is Novell's property,' said Bruce Lowry, spokesman for Novell. That could determine how quickly Novell can recover those funds. And time is of the essence since there's a possibility SCO 'may run low or even completely out of cash during the process of trying to reorganize,' Novell said in court documents filed Thursday. Novell is also trying to protect royalties SCO collects from Unix and Unixware software licensees and remits annually to the software developer. SCO is required to continue to remit between $500,000 and $800,000 annually to Novell -- the next payment is due Nov. 14. SCO remitted $696,413 to Novell between the third quarter of 2006 and the second quarter of this year."
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Caldera to SCO: Backing the wrong source (Score:5, Insightful)
But let's not forget that a few years back, this SCO was known as Caldera. They were a Linux distributor. They were a founding partner in UnitedLinux [unitedlinux.com]. Then they bought Unix -- well, they bought something -- and changed their name to sound like the old SCO (Santa Cruz Operation), and refocused their business on Unix and lawsuits.
Anyone want to bet that if they'd stuck with Caldera Linux as their primary business, they'd be doing a lot better today?
To pull out an old analogy, it's like they started out as an automobile company, and then decided to switch to the buggy-whip business -- and now they're blaming the automobile companies for their business failures.
Re:Caldera to SCO: Backing the wrong source (Score:5, Insightful)
I don't know that if they'd stuck with the Caldera name and business model that they would have succeeded. After all, how much space is there really for commercial support in the Linux space. Maybe they'd have succeeded, maybe not - but their legal antics and operatic press releases made them look like maniacs. And that is entirely their own fault.
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Re:Caldera to SCO: Backing the wrong source (Score:4, Insightful)
The old line about polishing a turd comes to mind. Caldera was one of the poorest distributions around.
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Re:Caldera to SCO: Backing the wrong source (Score:5, Interesting)
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Re:Caldera to SCO: Backing the wrong source (Score:5, Funny)
Yeah, and it let you play pacman while you waited for it to install. That was the most innovative thing Caldera ever did as far as I'm concerned.
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Tough noogies (Score:5, Funny)
Damn users, running away when we sue them! (Score:5, Funny)
Furthermore, McBride also noted, "These alternate distributors neglect to sue their customers, a service which we provide for our own customers, and thus they are able to undercut our price of $699 per customer. Despite making a concerted effort to protect our intellectual property through the legal system, IBM has failed to buy us out, so the expected funds did not materialize which had been earmarked for expansion plans for my summer cottage --I mean, er, corporate conference facilities.
"We expect our recovery to be delayed somewhat while we initiate the appeals procedure. At that point, we anticipate a healthy rebound, as our business partner tells one of those investment firms to give us more money.
"Even though shares of our stock cost less than an order of French fries at McDonald's, we want to allay any concerns about being delisted for having a low price. Our accountants have said
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Re:Tough noogies (Score:5, Insightful)
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Re:Tough noogies (Score:5, Insightful)
Funny, that.
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He will blame... (Score:4, Insightful)
Microsoft distributing Linux? (Score:4, Insightful)
Re:Microsoft distributing Linux? (Score:5, Informative)
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"Staying the course" eh ? (Score:4, Insightful)
lawyers of this company should be hanged in order to prevent more exploits in u.s. legal system.
oh yeah? (Score:4, Funny)
Re:oh yeah? (Score:5, Funny)
Not just any two, though, curiously enough.
We have not figured that part out yet.
We will stay on it, so to speak, till we do.
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Competition killed SCO. (Score:5, Funny)
So
Stop complaining! (Score:5, Insightful)
Indeed. And what's wrong with that? They filed for chapter 11, so now they naturally have to explain why. Competition that they cannot beat is the reason. The real one. What's wrong with little Darl saying that, other than that it probably is the first accurate business related statement coming out of his mouth in years and that he should have said it a long time ago?
I truely don't understand why you guys are screaming so much about this one. What McBride said is true amd he has to say it: Linux is the thing that ruined their business. It was doing that back in 2003 already. The fact that SCO used the dirty method they did to try to escape from the inevitable, does not change the basic facts. Get over it. You should all be happy, for $YOUR_DEITY_HERE's sake! So stop wasting time on such blahblah and get back to work, making Linux even better. SCO is history.
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Translation for those who don't know... (Score:5, Insightful)
McBride listed IBM, Red Hat, Microsoft, and Sun Microsystems as distributors of Linux or other software that is "aggressively taking market share away from Unix."
We would like to blame other entities for our inability to make a quality product that can compete in a competative marketplace. Simple put they are responsible for our incompetance.
SCO's reason for lawsuits? (Score:5, Interesting)
Wasn't the reason why SCO started suing everyone who was using Linux due to their assertion that the code in Linux was "stolen" from SCO Unix? So now they're claiming that competition from Linux (now that the courts see that the code was not, after all, stolen from them) is forcing them into Chapter Eleven?
And their assertions of this poverty are not due to the enormous amounts they have paid lawyers to prosecute ostensibly innocent companies?!
From now on, when I think of the term "pinhead" I'll think of the people at the soon-to-become-defunct SCO.
Other choice quotes (Score:5, Informative)
My favorites:
and:
and:
Ouch. To their credit (heh, I are teh funny), they managed to only lose $4.6M during that 9-month period, down from $12.9M a year earlier. Unfortunately, it looks like they're also out of things to cut.
Magnificently flawed business model (Score:5, Interesting)
So, reverting to the original argument, I suspect that McBride is not stupid, and that the whole thing is indeed a sock puppet. However, as a scam it is probably too arcane to be explained in a fraud trial. Expect McBride to turn up in a Microsoft advert before too long, explaining that it is the fate of all Linux companies to go bankrupt, so best stick with Windows.
So, let me get this straight.... (Score:5, Insightful)
SCO is solvent (Score:5, Informative)
Thus, . . . even if you accept that competition from Linux has hurt them, what really cooked their goose was suing Novell and, thus, forcing Novell to counter-sue. (Once SCO sued Novell, if Novell hadn't countered with the demand for payment of owed royalties, they might have been permanently barred from suing SCO for that $20M at a later date).
Of course, in their bankruptcy filings, SCO doesn't acknowledge that they owe Novell anything ... presumably under the premise that nothing is owing until the judge declares so in the trial (that is now being held in limbo by the Chapter 11 request). The problem that SCO may have, however, is that -- until, and unless Novell's royalties are declared (or acknowledged) owing, SCO is actually solvent, which means that the bankruptcy court may actually deny their request to go into chapter 11.
On the other hand, admitting that they owe all of this money to SCO would defeat the probable purpose of the filing -- which appears to be keeping Novell off of the list of top creditors. (I'm not going to link to groklaw, here, because their servers are SOOO snowed under by all this sudden attention -- and that just after they upgraded!).
The reason why SCO probably fears Novell being on their list of top creditors is that Novell would then lead a board of creditors which would have an incredibly wide-ranging ability to look into the recent actions of SCO from the inside -- and given how much SCO has been dancing to prevent certain disclosures in court, I expect that they'll be very unhappy to see Novell lawyers walking into the office to pull that very same information out of SCO's files in person.
And then there's the question of how much 'encouragement' Microsoft provided for the lawsuit against Linux in the first place.
Yeppers. I expect that there's gonna be a whole lot of hand-wringing in Utah over the next week or so... possibly even for over the next couple of years.
It's not going to work for SCO (Score:5, Informative)
Novell already sent five heavy-hitters from Morrison and Foerster, the leading bankruptcy law firm, to Delaware to present their side of the SCO bankruptcy. SCO originally wanted to keep paying their lawyers for their various pre-existing lawsuits during bankruptcy. But they didn't even try to convince the bankruptcy judge of that in court today. So that legal money drain stops. Novell indicated they're going to file a motion to restart their lawsuit (it's just stayed temporarily after the bankruptcy filing), and on October 5, Novell gets to argue that their financial claim preempts most of the other creditors. SCO was just supposed to pass royalties through to Novell, not keep them. Judge Kimball agreed, and put that in his summary judgment order last month, so Novell will probably win that one.
Meanwhile, SCO stock is now at $0.18, down 99% from the peak after SCO sued IBM.
Re:Oh that Darl McBride! (Score:5, Funny)
Citing his vast experience, General Motors has announced Darl McBride is being named CEO, in hopes of ramping up flagging sales of GM products by suing Honda and Ford.
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