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The Courts Government Caldera Software News Linux

SCO Caps Legal Expenses At $31 Million 341

Posted by timothy from the nice-prime-number-of-millions dept.
uniqueCondition points to a story on News.com, writing "With SCO's legal costs reaching $7.3 million in their most recent quarter, nearly half of the $15 million it has spent in the last five quarters, SCO can't afford this kind of litigation. They have therefore limited their payment to $31 million for the entire case and is giving their legal team a larger slice of any settlement SCO achieves. Under the current agreement, the firm's contingency payment is 20 percent of a settlement. Under the new agreement, that increases to a range of 20 to 33 percent." uniqueCondition links also to coverage at Techrepublic.com, InformationWeek and The Inquirer.
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SCO Caps Legal Expenses At $31 Million More

SCO Caps Legal Expenses At $31 Million

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  • To bail or not to bail (Score:5, Insightful)

    by AKAImBatman ( 238306 ) * <akaimbatman@gmaiBLUEl.com minus berry> on Wednesday September 01, 2004 @11:09AM (#10129379) Homepage Journal
    I'd say that their legal team would probably bail under this new contract (given that they probably don't expect to win), but then I read the "capped" number. 31 million dollars?!? Isn't that a bit like capping baseball players? i.e. They already make so much money that the cap doesn't matter in many ways other than principle.

    • Re:To bail or not to bail (Score:5, Insightful)

      by TopShelf ( 92521 ) on Wednesday September 01, 2004 @11:10AM (#10129390) Homepage Journal
      If anything, the cap gives both parties a point at which they can simply throw in the towel and pretend they're saving some face...

      • Question (Score:4, Interesting)

        by Anonymous Coward on Wednesday September 01, 2004 @11:18AM (#10129501)
        Does anyone know why after making a post, your IP is contacted by a Slashdot-server (in my case 66.35.250.150), which makes a "GET /" request, and on success further requests to the links in the directory-index.

        Try it: post something, then watch your access_log.

        • Re:Question (Score:5, Interesting)

          by chihowa ( 366380 ) on Wednesday September 01, 2004 @01:00PM (#10130668)
          66.35.250.150 (resolved to slashdot.org) scanned me for open proxies after I posted. It then poked around on my webserver for a bit.

          • Makes sense to me. (Score:5, Interesting)

            by mcc ( 14761 ) <amcclure@purdue.edu> on Wednesday September 01, 2004 @01:20PM (#10130840) Homepage
            They want to avoid people posting through open proxies since open proxies are the standard method of ban evasion by trolls. So I assume when you post, they do some quick checks to check for evidence your computer has any sort of open or web-based proxy on it.

            I assume if they hit anything, they'll either block you from posting further, or just flag you as a potential "problem user" or something. I suppose the thing to do here would be set up an open proxy on your computer and then attempt to post from it, and see if antyhing happens.
            • Actually that is what happens. Sometimes our admins decide to block slashdot, so I have to use a proxy. When I do, I can't post annon. It tells me i'm a problem user.

      • They. Are. Smoking. Crack. (Score:5, Funny)

        by Anonymous Coward on Wednesday September 01, 2004 @11:27AM (#10129641)
        Saving face?

        SCO: Hello Mr. Lawyer, will you take on our surefire case against Linux?
        Lawyer: Surefire? Ha ha... *ahem*
        (SCO hands lawyer large wad of cash)
        Lawyer: Of course I will, my good man.

        Many large wads of cash later:-
        SCO: Mr. Lawyer, we cannot afford to pay you any more. Will you continue the battle if we divide the spoils with you?
        Lawyer: What spoils?
        SCO: When we win our case
        Lawyer: Win? Have you been smoking crack again?
        SCO: We paid you all that money.... please go along with this.
        Lawyer: We'll *continue* to go along with this if you pay us more money. Why do you think we took this on in the first place?
        SCO: Do you work for magic beans?
        Lawyer: No, fuck off.

        Press release issued where Darl McBride mentions something about "focusing on our core business of selling Unix". Everyone laughs.
        • haha. The last sentance reminds me of the simpsons episode where the Homer squirts the jockeys and says "Marge, get me a trash bag." Following is a cut scene to the jockeys going "Please let us out. We'll give you gold!"

          The point i'm trying to make here is that is SCO employees are just a bunch of midget jockeys. Yeah... thats right.

        • They will! (Score:3, Funny)

          by freeze128 ( 544774 )
          Lawyers can and will work for free. It's called Pro Boner.

          I know what I said...
      • If they have given the legal team an additional 13% from the settlement, we can easily calculate how high considers its probability of success to be.

        If we estimate that the payment cap to the lawyers deprive them of... say $30 million, and they are trying to get $5bn from IBM settlement, they consider their chances to be:

        $5bn * p = $30 million

        => p = 4.6%

    • Re:To bail or not to bail (Score:5, Insightful)

      by bs_02_06_02 ( 670476 ) on Wednesday September 01, 2004 @01:14PM (#10130800)
      The legal team won't bail. Not until they've bled SCO for every last nickel. THEY'RE LAWYERS!

      I can't believe that anyone thinks that the legal team would ever quit. If a lawyer said to a client, "Hey, we can't win." And the client responds, "I've got $30 million dollars," the lawyer is going to turn around and go back to work. They will figure out a way to stretch it out. They'll exhaust every last option, they'll go over everything one more time. They'll re-file. They'll appeal.

      The biggest thing SCO and their legal team can do is issue press releases. Press releases are treated like news. Newspapers print them and treat them as news. The average citizen doesn't discern "news" from PR. They lump it all together, and the sad thing? People believe everything they read.

  • What exactly is a larger slice (Score:5, Funny)

    by Trigun ( 685027 ) <evil&evilempire,ath,cx> on Wednesday September 01, 2004 @11:10AM (#10129385)
    of total annihilation?

    Sounds like a sound investment to me!

  • Begging to be bought out (Score:5, Interesting)

    by SeanTobin ( 138474 ) * <byrdhuntr@hot[ ]l.com ['mai' in gap]> on Wednesday September 01, 2004 @11:10AM (#10129388)
    SCO is just begging to be bought out now. Take a look at this gem from the end of the news.com.com article:
    SCO also announced its board has approved a revised shareholder rights plan designed to make a hostile takeover harder, though no such attempts are under way, McBride said.

    "Where the share prices are at now, we are concerned about somebody who would be opportunistic. What's to keep IBM or somebody else from coming in and taking (SCO) out at a much lower price than the claims you have on the table?" he asked.
    Ahh... the joys of watching scumbag companies dangle in the wind. I almost feel sorry for their shareholders.

    • Re:Begging to be bought out (Score:5, Insightful)

      by Trigun ( 685027 ) <evil&evilempire,ath,cx> on Wednesday September 01, 2004 @11:12AM (#10129403)
      I almost feel sorry for their shareholders.
      If they weren't comprised of the SCO board of directors, that is...

    • Re:Begging to be bought out (Score:5, Funny)

      by ideonode ( 163753 ) on Wednesday September 01, 2004 @11:14AM (#10129442)
      we are concerned about somebody who would be opportunistic

      Mr. Pot, have you met Mr. Kettle?
    • He kind of has a point, though. Of course, it's silly that IBM would buy them because SCO is cheaper than the value of the legal claims against them, but if SCO stock were to drop enough that the company was cheaper than IBM's legal fees in fighting off the suit, then a takeover would make sense.

      IBM could just buy SCO and put it out of everyone else's misery, and save money doing it. Plus, they could get the satisfaction of firing Darl McBride.

      • that's got to be what they've been angling for all along. why reward these fumduckers with a buyout? let 'em go at auction and let linus buy the contracts and rights for 15 dollars.

      • Re:Begging to be bought out (Score:4, Insightful)

        by Dogtanian ( 588974 ) on Wednesday September 01, 2004 @11:34AM (#10129725) Homepage
        IBM could just buy SCO and put it out of everyone else's misery, and save money doing it. Plus, they could get the satisfaction of firing Darl McBride.

        Darl McBride would still get his money, and IBM would have to pay for a sign saying "SCO copycat litigants hoping to get bought out for more than they are genuinely worth: Please Queue Here".

      • Re:Begging to be bought out (Score:5, Insightful)

        by gcaseye6677 ( 694805 ) on Wednesday September 01, 2004 @11:35AM (#10129739)
        As satisfying as it would be for IBM to buy SCO and give the execs 10 minutes to clean out their offices, I believe the reason they have resisted doing this so far is because it would create an enormous incentive for every failing technology company to try the same thing. Getting bought out is a lot more attractive than watching your company wither and die. IBM is a big enough target that they could very well be made to suffer if enough companies thought they could get themselves bought by filing a bogus lawsuit.

      • Re:Begging to be bought out (Score:5, Insightful)

        by Apathetic1 ( 631198 ) on Wednesday September 01, 2004 @11:35AM (#10129757) Journal
        IBM has had the means to buy SCO all along. They'll never do it because it sets a bad precedent: Launch a baseless lawsuit against IBM, get bought out.

        • it's more than just the bad precedent! (Score:5, Insightful)

          by Xtifr ( 1323 ) on Wednesday September 01, 2004 @01:00PM (#10130664) Homepage
          Yes, IBM could have bought out SCO the day the lawsuit was started, and, in fact, they would have spent less to buy the company at that point than they've probably spent on legal fees in the case so far. But it's more than just the precedent involved here. SCO is claiming that IBM violated their contracts, and stole SCO's "intellectual property". They've threatened IBM's reputation and smeared their good name.

          It may shock some of the cynics here, who think that businesses only ever care about maximizing the profit on each nickel that flies by, but IBM actually cares about their reputation. They care about it for good, solid business reasons, but they still care. They know something that MS has yet to learn - if your customers (and partners) feel they can trust you, they're going to be a lot more willing to do a lot more business with you. SCO has accused IBM of being untrustworthy, and that's not something IBM will take lying down.

          This kind of thinking has got to be completely alien to Darl and Ralph, who are probably still in shock that their "buy me, buy me!" scheme didn't work. They may well have studied the odds, and found that IBM only fights a certain percentage of nuisance lawsuits (chosen at random), and figured their chances were pretty good. I don't think they realized that this was a case that IBM would never roll over for, because that kind of thinking (ethical) is not something they're equipped for.

      • Re:Begging to be bought out (Score:2, Interesting)

        by Anonymous Coward

        No, it would not make sense. Think about it: what kind of signal would that send to other crooks looking to make money out of IBM? Also, newSCO have impugned IBM's integrity with respect to IP, and that could be harmful to IBM's business if the outcome of the case leaves any room for doubt on that point.

        No, IBM needs to unequivocally beat them and then sow their fields with salt.

      • Re:Begging to be bought out (Score:5, Interesting)

        by UnknowingFool ( 672806 ) on Wednesday September 01, 2004 @11:40AM (#10129828)
        IBM could just buy SCO and put it out of everyone else's misery, and save money doing it. Plus, they could get the satisfaction of firing Darl McBride.

        That would be the quick and easy solution. I think IBM wants it to be painful for SCO. If IBM wins on its counterclaims of infringement, it could own SCO outright. With its portfolio of patents and copyrights and heavy purse strings, IBM could bankrupt SCO through legal battles and settlement claims. As the major creditor, IBM then owns SCO.

        It could then do worse then just to fire Darl. As the owner of SCO, it then has access to all SCO's files. If it finds any legal wrongdoing on Darl's or any other exec's part, it could pursue legal action against them for fraud, perjury, damage to the company, etc. They could then go after all of the money he's gotten so far. This would send a clearer message to anyone who might think about pulling another stunt like this.

        • This is much the same thing I've been saying for quite some time, but one thing I haven't been able to adequately address is the possibility of a third party buying out SCO. Say someone like Microsoft.

          If you disregard the stupidity of such a purchase from an investment and liabilities standpoint, and just focus on the effects of such a buyout, you then have Microsoft putting their weight behind the motion, which could then drag out the case forever. It also protects the SCO execs from being absorbed by I
      • The problem is that if IBM buys SCO, then every two-bit scammer will try the same thing (sue IBM hoping IBM will settle/buy them out). IBM knows this and is in the process of driving SCO into the ground to make an example of them.
        In the long run, it is (far) cheaper for IBM to fight this case to the bitter end rather then trying to deal with hundreds of similar cases that could arise if IBM buys SCO.
        Besides the point, it is not even clear that SCO owns anything at all. SCO claims to have the rights to s
      • Plus, they could get the satisfaction of firing Darl McBride.

        Fire him? No, no, no, no, far too easy. Perhaps a demotion to the job of cleaning dust from the insides of old servers in the warehouse, or maybe even offering mints and cologne to upper management in the corporate washrooms. He's already familiar with the bottoms of toilets, since that seems to be where his ideas are coming from.
    • Actually, my impression is that the poison pill measure is simply a way for them to "look good." The fact that Canopy, the Board of Directors and various employees own a substancial chunk of the company to begin with even without the poison pill measures anyone who would be interested in buying SCO would have to negotiate with Canopy, et al.

      Basically, its like putting spinning rims on a 1995 Hundai: it does nothing to add to the value of the car, but the owner hopes desperately it will make it look like
    • I almost feel sorry for their shareholders.

      Why? If they own SCO stock (NYSE: SCOX [yahoo.com]) and they lose money then it's their own damned fault. Don't feel sorry for people being stupid. You could make a full time job out of that nowadays. Stupid people only end up costing the rest of us in the end. If they want to make a quick buck on a pump and dump scam that's been widely debunked in investing circles then so be it. It's not our problem and we shouldn't have an sympathy for them. They're stupid.

  • Oooh, a bigger fraction of zero (Score:5, Funny)

    by Anonymous Coward on Wednesday September 01, 2004 @11:10AM (#10129389)
    [SCO] is giving their legal team a larger slice of any settlement SCO achieves.
    SCO's "legal team?" Given their performance to date, I imagine that the sole member of their "team" is probably Chim Chim (the monkey from Speed Racer). He'll be a sad monkey though, cause 22-33% of nothing means no more bananas.

    • Re:Oooh, a bigger fraction of zero (Score:5, Insightful)

      by Erwos ( 553607 ) on Wednesday September 01, 2004 @11:18AM (#10129506)
      The way I see it, they've actually done a fantastic job so far.

      They've managed to keep a very dubious claim afloat, confuse the judge to the extent that the case wasn't summarily tossed, AND keep the public guessing as to whether the case has any merit or not. Honestly, they've been performing pretty well, given the tools at hand.

      -Erwos

      • Re:Oooh, a bigger fraction of zero (Score:5, Insightful)

        by nattt ( 568106 ) on Wednesday September 01, 2004 @11:26AM (#10129624)
        I don't think that the judge is confused. Only in the last week has IBM's legal team stopped pulling punches, and I think they've still got much in reserve, legally speaking. They have the best expert witnesses that blow SCO's out of the water. Now they've started calling SCO liars in the court documents.

        The Judge has been very careful, very measured, and I guess, just giving SCO time to really make sure, before they meet his wrath.

        • Re:Oooh, a bigger fraction of zero (Score:5, Funny)

          by Anonymous Coward on Wednesday September 01, 2004 @12:05PM (#10130100)
          The Judge has been very careful, very measured, and I guess, just giving SCO time to really make sure, before they meet his wrath.

          Uh... the judge is *meant* to be impartial. Unless...

          Judge's verdict: Darl McBride, SCO board and lawyers sentenced to death.
          Shock in courtroom.

          Darl starts mouthing off... "this isn't a murder trial".... "guilty of what?"... "this'll be struck down on appeal, asshole".

          "Silence!" yells the judge with such conviction that those present turn and face him.

          The judge, face covered by a cowl, takes one gloved hand, and makes a strangulation gesture, slowly but surely tightening his grip. As the SCO team start to have severe trouble breathing, a chink of light moves over the judge's cowl, revealing his face.

          "Tux!" gasps McBride with his last breath.

          Judge Tux laughs evilly as McBride and cronies expire, one-by-one.

          Hundreds of geeks rush over the now still corpses of SCO, and hug Judge Tux in gratitude.

          Tux sits back with an expression of stoned satisfaction.... well, the same damned expression he *always* wears, actually.

          "One thing," asks one of the geeks. "Where did you get those supernatural powers? I always thought you were a simple penguin, and yet... what you did there, I mean...."

          A small red figure steps out of the shadows.

          "Tux?" smiles the cute, but evil, sneaker-clad daemon. "Oh yes. Tux is just an ordinary penguin. I think he forgot that without me, he would be... nothing. But I grow tired of his arrogance...."

          The daemon takes his hand and makes the same strangulation gesture as Judge Tux made before. Tux holds his flippers to his throat, but is powerless to prevent his inevitable death at the hands of the daemon.
          His corpse lies lifeless on the floor, surrounded by disbelieving geeks.

          "So.... *BSD is dying, is it, my geek friends?"

          Geeks shake their heads nervously.

          "Too late!" yells the daemon. "Looks like I'm the only one who won't be dying around here today".

          With a wave of his hands, BSD daemon slams every exit in the room shut and sets the curtains on fire.

          Within minutes, the room is a scene of horror and carnage; there is no escape for the massed ranks of business reporters, and Linux geeks.

          BSD daemon smiles....

          "Netcraft... you're next."

          The End.
        • They have the best expert witnesses that blow SCO's out of the water

          Yeah. I'm dying to see how SCOX will try to discredit Brian Kernighan. That should be fun to watch.

          • Re:Oooh, a bigger fraction of zero (Score:5, Insightful)

            by swillden ( 191260 ) * <shawn-ds@willden.org> on Wednesday September 01, 2004 @01:46PM (#10131103) Journal

            I'm dying to see how SCOX will try to discredit Brian Kernighan.

            Even more, I'd like to see them try to discredit Randall Davis. Davis' declaration says that SCO doesn't know how to compare code and discover if it's substantially similar. Who is Davis to know this? Well, aside from the Director of MIT's AI lab, Chairman of the NSF committee on software intellectual property and frequent testifier to Congress, he was the man consulted by 2nd Circuit Judge Pratt when Pratt defined the Abstraction-Filtration-Comparison test, which is the technique used by most US Federal courts -- including the 10th Circuit -- to determine if software is substantially similar.

            This means that when Judge Kimball goes back to review the rulings that defined the AFC test, so that he can be sure to apply it correctly, he'll be reading Davis' name, Davis' ideas and probably even some of Davis' words.

            Kernighan is well-known and well-respected in geek circles, but Judges know that Davis is the expert of experts on software copying.

            IBM to SCO: (Eying Sandeep Gupta) That's not an expert. (Pointing at Randall Davis) *That's* an expert. (SCO drops Gupta and runs away).
    • Hey, don't be dissing Chim Chim! He was probably the most level-headed of that whole crew! ;)

  • Oh Nos! (Score:2, Funny)

    by GeekDork ( 194851 )

    Them lawyers are gunna starve!

  • source license revenue from where (Score:5, Insightful)

    by alw53 ( 702722 ) on Wednesday September 01, 2004 @11:12AM (#10129411)
    What I want to know is: who is paying them 660K in sco source licensing reveunue last quarter? Did Microsoft make another payment, did they recategorize other income into that program; what's the deal? It can't possibly be real income.

  • SCO Lawyers (Score:5, Insightful)

    by bucketoftruth ( 583696 ) on Wednesday September 01, 2004 @11:12AM (#10129419)
    I kinda wish I was a SCO lawyer. They're making phat bank and they must know it's all going to fall apart in the end. They'll walk away with pockets full of cash and they won't be liable for anything I bet. (IANAL)

  • A hundred percent of nothing is still nothing. (Score:2, Funny)

    by Anonymous Coward
    Might as well invest in losing lottery tickets.
  • *suprise*
    *shock*

    IBM, luckily is on Linux's side, and has the coffers to litigate with SCO into the next century

    *sigh*

  • Unfortunately for the Lawyers... (Score:4, Insightful)

    by HenryKoren ( 735064 ) on Wednesday September 01, 2004 @11:15AM (#10129463) Homepage
    A bigger slice of nothing is still nothing.

    Reminds me of fly by night dot-bomb executives trying to appease their employees by giving them tantalizing (restricted) stock options.

    Then pumping, dumping, and running like hell.
  • So if they are limited to $31 million and they have already gone through $15 million that means I got about 2 quarters left. So at least 6 more months of this drama. Fun eh?

    Rus

  • On the day of closing statements... (Score:5, Funny)

    by Vexler ( 127353 ) on Wednesday September 01, 2004 @11:16AM (#10129478) Journal
    Judge: You may go ahead with your closing statement.
    SCO: Yes, Your Honor. Ladies and gentlemen, this is a case about intellec... (looks at watch abruptly) Oh, sorry, I guess the fund ran out just now. Another day, another trial. (Picks up briefcase, then bolts.)

  • The *Actual* FleeceMasters Here... (Score:5, Insightful)

    by MooseByte ( 751829 ) on Wednesday September 01, 2004 @11:17AM (#10129488)

    As someone pointed out over at groklaw [groklaw.net], 31 million is almost exactly all SCO is now worth in reserves, assets, etc. Team Boise ain't exactly sacrificing much here.

    Everyone talks about SCO running a sleazy poorly executed shakedown (I agree), but I'm wondering if Boise and Crew have just shown us how to run a sleazy *brilliantly* executed shakedown - of SCO.

    And from reviewing all the filings, it's clear Boise et al weren't exactly working overtime with their best and brightest in putting the case together.

    Boise: "Hey look, it's a moron with tons of money. Let's string him along and see where it takes us."

    The would-be con men have been conned, and damn well I'd say.

  • Works on contingency? (Score:3, Funny)

    by sczimme ( 603413 ) on Wednesday September 01, 2004 @11:18AM (#10129505)

    No, money down!

    /I move for a bad... court... thingy.

  • A large percentage of the settlement? (Score:5, Funny)

    by Zangief ( 461457 ) on Wednesday September 01, 2004 @11:19AM (#10129512) Homepage Journal
    Does this means that if the judge "settles" that Darl spends his next 10 years in jail, he actually gets 4 years, and the lawyers get 6 years?

    Sounds good to me...
  • Once the 32 Million is billed out I think you will see a quick resolution of the SCO lawsuits. As pointed out in the conference call yesterday several IP legal firms have offered an opinion that the SCO suits have no legs (I think one of the callers adviced them to get a second opinion instead of relying only on the firm you just promised $31 Million). So once the money is gone so will the motivation.

    These high rate of expenditures are interesting as quality of legal work so far has been sophmorphic and
    • These high rate of expenditures are interesting as quality of legal work so far has been sophmorphic and low quality.

      I'd like to think SCO is getting some value for the $7 million dollars they spent in the last 3 months. But, simply by accepting this case the law firm has demonstrated questionable ethics.

      In fact, I bet they're sending McBride a listless shaved chimpanzee and a bottle of cheap tequila every evening, but are billing SCO for 12 year old boys and Perfidio.

  • Predictions... (Score:2, Insightful)

    by l4m3z0r ( 799504 )
    When they spend all $31 Million and a settlement is still not coming what will the lawyers do then? I highly doubt they are going to keep working. My bet is the second that $31 mil is gone the lawyers are going to walk away and watch the company die. Perhaps SCO just dictated how and when it will fall.

  • opportunistic (Score:5, Funny)

    by HogGeek ( 456673 ) on Wednesday September 01, 2004 @11:21AM (#10129551)
    I think every slashdotter should chip in $100, and WE buy SCO!

  • Stock (Score:2, Insightful)

    by doctor1 ( 739197 )

    Do lawfirms have stock? I want to buy stock in SCO's legal representatives. They are certainly having a banner year. And then I want to sell that stock as soon as the last legal fee payment has been made by SCO. At that point, I expect they won't really have a great reputation in the legal community; so they won't be in much demand as lawyers after this case has been decided. I mean, who wants to hire a lawfirm that has a reputation for tying up the courts with a nonsense case, just to bill their client int

  • What a waste. (Score:4)

    by suso ( 153703 ) on Wednesday September 01, 2004 @11:24AM (#10129578) Journal
    Imagine what $31 million dollars could have done had they given it to various open source projects. Money in this world could really be put to better use.
    • With link!!!
      And imagine what $800 billions dollars [warresisters.org] each year could have done had they given it to various peace and development projects. Money in this world could really be put to better use.

      (And please consider that I know this sound like a trolling bait but please please:
      - consider that my comment is related to the parent comment.
      - I wasn't insulting someone or anything.
      - Just thinking outside of the box, we are here to have a discussion after all. I am not affiliated in anyway with that website I

  • Everyone loses on SCO's side (Score:5, Interesting)

    by UnknowingFool ( 672806 ) on Wednesday September 01, 2004 @11:24AM (#10129579)
    The contigency increase only matters if SCO wins. SCO won't win. Therefore their attorneys will only get their fees paid. In the event IBM wins on any of it's counterclaims of infringement, that means SCO will have to shell out lots of money to fight it. If they're lucky IBM will settle, but I don't think IBM wants to settle. If IBM finally gets the discovery it wants, IBM might find more issues of wrongdoing.

    Then SCO has to fend off Novell, RedHat and Autozone on any counterclaims they may have. Then they all could sue SCO for slander of title, abuse of process. If the GPL holds up in court, everyone that has code in Linux (including IBM, SUSE, RedHat, etc) could sue for damages. The only winners for SCO are the execs that have cashed out. But the SEC is looking into that.

  • and 0 future earnings comes out to approximately... zero freakin' nothing. sounds like these lawyers need to chase another ambulance, this one is rusted in the ditch and full of dead people. good call, champs! maybe they can take possession of the SCO letterhead and let their kids practice writing demand letters on it. even in purple crayon, they'd make more sense than ol' buddy darl's quest.

  • The worst part is... (Score:5, Interesting)

    by DownWithTheMan ( 797237 ) on Wednesday September 01, 2004 @11:29AM (#10129669)
    They still believe they can win and are in the right... I live in Provo UT (student at BYU; yes yes I know crazy mormons blah blah blah, i totally agree)... Anyways I go to the same church ward as Ralph Yarro (Chairman of the Board of SCO, and CEO of Canopy Group)... Every Sunday I love to slam Ralphie with questions about what's going on on the SCO Titanic... He tells me over and over that they (SCO) have the moral highground and are in the right... He also says that in his heart of hearts he believes they will win the lawsuite against IBM... And after a win against IBM, he thinks the lawsuites like the ones against Chysler and AutoZone, will all just start to drop in... Whatever crack that guy's smokin'... I want some...

    • Re:The worst part is... (Score:5, Funny)

      by Just Some Guy ( 3352 ) <kirk+slashdot@strauser.com> on Wednesday September 01, 2004 @11:53AM (#10129972) Homepage Journal
      Anyways I go to the same church ward as Ralph Yarro (Chairman of the Board of SCO, and CEO of Canopy Group)

      Want to have more success with new recruitment? Swing by the CompSci department at a non-Mormon college:

      You: Hi! Would you like to learn about the second gospel of Jesus Christ?
      Them: Argh! A cyclist in a necktie - run!
      You: Did I mention that the guy from SCO goes to my church?
      Them: What time should I be there?

      Man, I'm a dyed-in-the-wool Southern Baptist, but even I would be willing to swing by for a little face time.

  • Muppets (Score:5, Funny)

    by chill ( 34294 ) on Wednesday September 01, 2004 @11:31AM (#10129702) Journal
    Just to show my age...

    The first thing that popped into my mind was an episode of the Muppett Show I was when I was but a wee lad.

    Fozzee Bear wanted a raise and brought in his agent (a rat) to negotiate w/Kermit the Frog. Kermit worked the rat into a frenzy (100% raise...no, 200%...no, 300%!) getting everyone all hype.

    Then Kermit left and the rat asked Fozzee what he made before. $0. The rat was, well now you get 300% of that! And remember, I get 30% of THAT!

    Sad.
  • SCO just adopted a poison pill [yahoo.com], intended to prevent a hostile takeover.

    SCOX has been in the $3.50 to $4 range all week, with light trading. Six months ago, it was at $14.

    Next court date: September 15, Judge Kimball. Motions in both the Novell vs. SCO and SCO vs. IBM cases will be heard. SCO has been stalling to put off this date, but it looks like the judge won't tolerate any more delay and some major issues will be decided in two weeks.

    • SCO just adopted a poison pill

      I don't really understand what that means, although I have a vague idea. Care to give a short explanation to save the Slashdot hordes from having to do our own research (50% of it invariably leading to a completely wrong "understanding")?

  • SCO is in a unique position...On one hand, they can't afford to keep paying their lawyers to drag out the case, which they must do because they don't have one. On the other hand, they can't wrap it up either because then they will be exposed.

    And what happens when they reach this $31 million cap? Lawyers don't work well when you stop paying them, and IBM can afford to sit around until SCO runs out of money. This would certainly not please BayStar Capital.

  • DIVIDE BY ZERO ERROR (Score:3, Informative)

    by Progman3K ( 515744 ) on Wednesday September 01, 2004 @11:35AM (#10129754)
    SCO Halted.
    Please reboot underhanded business practices, or better yet, install Linux.

  • How much money has SCOG really got? (Score:5, Insightful)

    by Mostly a lurker ( 634878 ) on Wednesday September 01, 2004 @11:37AM (#10129777)
    Darl stated in the teleconference that SCOG now has US$43 million in cash. As usual, it is dangerous to take anything coming out of his mouth at face value. It appears that (as of 31 July) they had about 16 million in cash, 13 million reserved for the BayStar settlement (since paid) and about 27 million in "available for sale securities". I am particularly suspicious about this last figure. Do you suppose this is mostly SCOG stock bought in a desperate attempt to bolster the stock price (perhaps at an average price of US$10), grossly overvalued today and incapable of being translated into any significant amount of cash?

    Other issues that are relevant. The above figures are a month old and last quarter SCOG was burning about 2.4 million a month in legal fees. Also, outstanding legal fees that had not yet been paid as of 31st July were unclear.

    Who is SCOG's auditor and will they need to insist that SCOG presents a truthful balance sheet? And when?

  • Why would anybody want to buy SCO? (Score:5, Interesting)

    by Secrity ( 742221 ) on Wednesday September 01, 2004 @11:39AM (#10129794)
    I find it pretty amazing that SCO has the cajones to believe that anybody would be interested in taking them over. I believe that their stock is as high as it is right now (if under $4 a share is high) only because SCO has been buying it's own stock. What do they own? They have some money in the bank, much of which they owe to their lawyers and to others; they also own a UNIX distribution that that people are not busting down the doors to buy. SCO seems to believe that they own the copyright to System V, Linux and UNIX in general; they may actually own some sort of rights to System V, but SCO's copyright claims are being contested by somed of the current owners. SCO has a number of pending lawsuits, and so far the verdicts in their lawsuits have been against them. Their anti-takeover defense is as useless as any of their other claims.

  • This was on GrokLaw .. (Score:5, Informative)

    by talexb ( 223672 ) on Wednesday September 01, 2004 @11:40AM (#10129819) Homepage Journal
    .. almost 18 hours ago. See this [groklaw.net] page.

  • Go To $31M Then Stop (Score:5, Insightful)

    by blueZhift ( 652272 ) on Wednesday September 01, 2004 @11:46AM (#10129890) Homepage Journal
    As many have quipped here already, there isn't likely to be a settlement in this case. So assuming that the lawyers themselves are not stupid, this cap agreement would seem to indicate that SCO has not yet racked up $31M in billing charges. And again, if the lawyers are not stupid, they probably already know, perhaps better than anyone else, that there isn't going to be a settlement. So it seems likely that when the $31M cap is reached, the lawyers will bail out. There's probably some kind of contract clause that will allow them to do this. If one knows how much has been billed already and the rate of billing, then it is possible to estimate how long it will be before the lawyers bail given the cap.

    It all sounds pretty slimy when you think about it. I mean, how many millions were made on the SCO share run-up for largely baseless litigation? And one can bet that the lawyers aren't taking a loss on this deal. So they all do okay. To borrow a Chinese expression, its a sharing pork world!

  • That's $31M in *future* payments (Score:3, Informative)

    by ToLu the Happy Furby ( 63586 ) on Wednesday September 01, 2004 @11:52AM (#10129956)
    Just so it's clear, the $31M cap does not include payments that have already been made; the "total" in "total legal costs" refers to the fact that the cap would apply to all the firms representing SCO, not just Boies, Schiller and Flexner.

    This is all made a bit more complicated by the facts that SCO currently owes something like $8M in unpaid bills for legal services already rendered--which apparently is covered by the cap; that the detailed terms of the deal haven't been released yet; and that in fact the details haven't been agreed upon yet (so far there's only a signed letter of intent). But the bottom line, confirmed at yesterday's conference call [yahoo.com], is that SCO currently has ~$43M of cash on its balance sheet, and that assuming their future legal expenses hit the cap, they have ~$12M left to run the rest of their business--roughly 4 months of operating expenses at last quarter's burn rate.

    In other words, barring some last minute capital infusion, SCO will run out of cash well before they hit the spending cap--unless, of course, they plan on dropping the pretense of running a business outside of their lawsuits.
  • Just finished reading SCO's quarterly report, and it irks me that their licensing program is still generating cash flow from companies who may be too cowardly to admit that they paid real money for SCO's FUD.

    Here is an idea that is more in the spirit of the aforementioned movie than anything else:

    We could start an "I Am A Linux User" movement, and it works pretty simply by gathering signatures from Linux users. We could then send this to SCO and deliberately contrast our "I Am One Of Them And Darn Proud
  • ... about the "little guy" crushed by the costs of meritless litigation?

    This example suggests, even the "bigger guys" can suffer...

  • Comment removed based on user account deletion
  • Why don't we all kick in $1, and send SCO packing?
  • let's see, 33 percent of nothing, is.... umm, let's see... nothing! Whoohoo! Another lawyer gets screwed! What a country!

  • Poor Darl (Score:4, Funny)

    by mehaiku ( 754091 ) on Wednesday September 01, 2004 @12:08PM (#10130134) Homepage

    Through lawyers the courts Darl has mocked
    Jail is where he will be locked
    It will not be funny
    When Darl's out of money
    Then he'll pump more than just stock

  • SCO city to city tour (Score:5, Informative)

    by Anonymous Coward on Wednesday September 01, 2004 @12:11PM (#10130160)
    It looks like they are planning to go on the road to spread their FUD:

    http://www.sco.com/partners/city_to_city/2004/

    It might be a good idea to organize groups of people to show up and voice some opposition. Handing out free GNU/Linux distros would be fun too!
  • Looking at SCO's SEC filing [sco.com] you can see that their $7.3 million loss is roughly equal to the " Cost of SCOsource licensing revenue" (i.e. legal fees). Their Unix business itself is still (marginally) profitable. I'm willing to wager that some of their other costs (like marketing) are also related to the ScoSource FUD campaign. Now factor in the cost of lost goodwill and lost sales. If SCO would just quit the ScoSource business and stop alienating potential customers, it would actually make a profit. They ar

  • Larger "slice" of the settlement? (Score:5, Funny)

    by swillden ( 191260 ) * <shawn-ds@willden.org> on Wednesday September 01, 2004 @12:24PM (#10130292) Journal

    They have therefore limited their payment to $31 million for the entire case and is giving their legal team a larger slice of any settlement SCO achieves. Under the current agreement, the firm's contingency payment is 20 percent of a settlement. Under the new agreement, that increases to a range of 20 to 33 percent.

    But the way things are shaping up, any settlement between SCO and IBM is going to require SCO to pay large amounts of money to IBM in order to get IBM to drop the copyright infringement claims, the patent infringement claims, the Lanham Act claims, etc., because IBM's attorneys are quickly demolishing all of SCO's claims.

    IMO, the lawyers should have to pony up 20% to 33% of *that* settlement. They should get a "slice" all right...

  • SCO Boss McBride's bonus (Score:3, Interesting)

    by edibobb ( 113989 ) on Wednesday September 01, 2004 @12:25PM (#10130313) Homepage
    At the end of FY 2003, SCO president McBride got a $755,000 bonus, more than triple his salary, for his excellent performance.

  • I see it comming... (Score:5, Funny)

    by WillRobinson ( 159226 ) on Wednesday September 01, 2004 @01:28PM (#10130916) Journal

    ERROR: divide by 0

  • The law-weasels should pay 20% in countersuits (Score:3, Interesting)

    by EvilAlien ( 133134 ) on Wednesday September 01, 2004 @06:31PM (#10133786) Journal
    How's that for an idea?

    Hold those law-weasels accountable for 20% of any damages IBM, Red Hat or others might be awarded in return salvos at SCO. That might teach lawyers to be a bit more selective about which idiotic cases they bring to the courts.

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