SCO Bankruptcy "Imminent, Inevitable" 234
mattaw writes "From analysis by Groklaw it seems that SCO may owe Novell nearly all the SCOSource licensing fees, and has been hiding the fact for 3 years. Imminent. Inevitable. Bankruptcy. Those are the words from Novell's lawyers. Perhaps the IBM/SCO case could close earlier than planned? Perhaps we can finally be rid of this specter once and for all?"
Can they drop the suit? (Score:4, Insightful)
-GiH
Re:Can they drop the suit? (Score:5, Funny)
Re:Can they drop the suit? (Score:5, Interesting)
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Its current share price is $1.19, giving a market cap of $25M. Since it's requesting at least $5 billion in damages, the market's view is that this outcome is a 40/1 shot. That's long odds in a 2 horse race.
That's an interesting way of looking at it.. but it downplays the degree to which the market is risk-averse. Even if many stock brokers were to look at SCO and find them likely to win, such an award would be on the other side of several years of highly variable legal practice (the result can turn with new laws, new SC rulings, even if IBM were to find a new line of argument) - thus much more risk than an average broker would be willing to absorb.
I think. I am not a stock broker.
-GiH
Correction (Score:5, Funny)
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I do not think it reasonable to equate current SCO shareholders with "an average broker". Any current SCO shareholder would be so far off the norm to make any rational evaluation impossible. That is not an anti-SCO-biased claim... that is a simple fact based on the stock price history. Any stock with that sort of price history simply would not be held in the portfolio of any average risk-adverse investor. A stock that has fallen from over
IBM counter claims unavoidable (Score:2)
But there is no way for SCO to avoid IBM's counter claims. Even in bankruptcy the trustee gets to decide to continue a case or just fold their side. The case still must have an outcome.
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Opportunity for Novell (Score:2)
Re:Opportunity for Novell (Score:5, Funny)
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I'm excited (Score:4, Insightful)
Hopefully Novell and IBM can split the leftovers, I think it's owed to them.
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I believe, that in it's current incarnation, SCO doesn't have any such employees. When they were the Santa Cruz Organization, they had such people. But, I believe the current SCO is a holding/IP company who doesn't actually do such mundane things as writing software. I think it's been about a decade since SCO had coders in its employ.
(If people have more accurate informati
Re:I'm excited (Score:5, Informative)
The current SCO (newSCO) is what used to be Caldera. Santa Cruz (oldSCO) became Tarantella, and was bought by Sun.
166 Employees (Score:2)
About 50 developers? (Score:5, Interesting)
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Unix/Linux - they do not do any development anymore. At least all people responsible for Caldera are not there anymore. Needless to say SCO never employed any Unix folks - they acuired rights only. Also SCO recently acquired "Vultus" or something like that - web services company (no need for guesses - internal shuffles in Canopy group).
Note, that SCO is R&D company. And it is also public company. If current management would mark itself with irresponsible management, they would be crossed as manageme
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And I assumed about $160,000 per employee per year. $100,000 per developer is optimistic, although possible under some circumstances.
Re:About 50 developers? - way too high (Score:5, Insightful)
You should go through the list and add up the costs. It's not that great. For example, it's hard to imagine having more than one manager and one secretary per 10 developers. Hardware is dirt cheap (a few thousand per year at most). Electricity and office space likewise, at least compared to a developer's salary. Health insurance is a serious expense, but still only a fraction of the cost.
And if SCO is paying $1.5 million for coffee, the management should be fired tomorrow. A dollar or two per day per employee, that's it.
Trust me, $8 million per year buys a lot more than 10 developers.
They're Hiring! (Score:2, Funny)
Please have a look at their services too... looks fantastic.
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You can check it out here. [sco.com]
Please have a look at their services too... looks fantastic.
Hiring in India at that, so the above speculation on how much the developers are being paid is probably inaccurate... they probably have a couple hundred developers if they're paying $2mil/qtr and employing folks in New Delhi.
Looking at their services, I'm considering recommending the company I work for immediately employ their consulting services... I've no doubt these boys really know what they're doing. heh.
Darl (Score:3, Insightful)
I personally think Darl should get jail time. I consider him no better than Lay or Skilling.
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I know we can hope, BUT ... (Score:2)
SCO is like that bug that won't go away or die. When you considering how long they have waited this out, what makes this really any different.
Now, I hope it is true and these guys do go away. But I won't be holding my breath. Keeping my fingers crossed though.
RonB
I doubt it (Score:5, Insightful)
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Re:I doubt it (Score:5, Funny)
In a word: Chainsaws (Score:5, Funny)
You monster, I can't believe you'd do that (Score:2)
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NO! (Score:5, Insightful)
IBM should crush SCO in court and be awarded whatever is left of the company as compensation.
If IBM gives up any money to SCO or SCO executives, IBM has lost and will be sued again over this same kind of crap.
Re:I doubt it (Score:4, Insightful)
One, IBM would then face lawsuits from other two bit companies that might have even less of a case, leading to IBM spending even more money on legal fees. The more money they blow defending their linux ventures, the less profit their linux ventures make. This is less money for them, and for us... a greater likelihood that they will eventually pull out of linux entirely. Bad for IBM, bad for us. A decisive win now, good for IBM and good for us.
Two, it would appear to be an admission that SCO had a case. Technically it isn't, but people would see it that way even if the courts didn't. This is bad.
Three, this would encourage other people to go after potential copyright/contract problems related to Linux in courts, rather than approach Torvalds and his crew and say "We've got concerns about this code here" before resorting to a lawsuit.
Four... there are concerns about the GPL actually holding up in court. While I have heard vague references that it has held up a few times, this is a high profile case where one of the largest companies in the world has thrown down GPL violations in its countersuit. Winning on those counts will be a significant boost in public confidence about how well it will hold up, hopefully leading to more people who were considering it actually going with it.
Re:I doubt it (Score:4, Funny)
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Re: Novell would love that. (Score:2)
The whole point of the article is that the "millions" that Sun and Microsoft paid for "precious SCO software licenses" are likely to end up -- in large part -- in Novell's pocket. If they did it again I'm sure Novell would demand the court impound the money immediately before SCO got a chance to fritter it away again. Kimball might throw in a contempt of court charge to top it off, since they're re
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My understanding is the lawyers were paid in advance.
From what I remember from when this whole mess began, SCO paid the lawyers for the IBM suit with SCO stock.
It's more than bankruptcy. (Score:5, Informative)
- Novell owns the copyrights and not SCO.
- SCO needs to give Novell a full accounting of unreported money it owes Novell for SVRX licenses.
- Novell wants to court to order SCO to comply with their contract, which gives all the royalties from SVRX to Novell.
- Novell has the right to waive SCO's claims on UNIX code. Including those against IBM.
- Novell wants the court to issue a "declaratory judgment" that Novell has the right to audit SCO's performance to make sure that it doesn't take any more of Novell's money.
- SCO needs to put all the money it "converted" (i.e., "stole") from those licenses into a constructive trust. (This is the one they're fussing about now. Sun and Microsoft gave SCO a bucket of cash to carry on the lawsuit against Linux under cover of a UNIX license. But SCO is supposed to give UNIX license money to Novell.)
- Number seven repeats number six and asks for the trust again. Eh, lawyers. Go figure.
- Number eight asks for the trust again, but adds punitive damages for swiping the money in the first place. Since SCO has already spent most of the cash, this is pretty much just adding insult to injury.
- Finally, Novell wants a complete accounting of all SVRX agreements or "other agreements relating to royalty bearing products." That's because SCO was claiming that the Sun and Microsoft agreements weren't "real" SVRX agreements, so SCO didn't owe Novell any money. Novell wants an accounting to make sure SCO isn't hiding any more ill-gotten gains.
So, yeah, the cash is a big deal and it's going to bankrupt SCO. Couldn't happen to a more deserving bunch of fellas. But read number four again. If Novell has it's way, the IBM case is gone too because SCO never had the right to sue in the first place.Of course, there are always IBM's counterclaims, but it's unlikely there will be anything left after Novell is done.
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Re:I don't think they knew. (Score:5, Informative)
Keep in mind that nobody was much interested in UNIX by this point. The original deal was between the original Santa Cruz Operation and Novell because Novell wanted out of the UNIX biz while Santa Cruz wanted some stuff so they could do a joint project with IBM. That project didn't pan out, so they renamed themselves Tarentella and sold the UNIX business to Caldera. Novell didn't much care who owned the business as long as they got their checks, which both Santa Cruz and Caldera sent them as per the contract.
Caldera didn't want the UNIX business either. They were a Linux business and thought they could convert SCO's UNIX distribution network to selling Linux instead. That didn't work out either; apparently the UNIX resellers didn't want to switch to Linux and Caldera was making more selling UNIX than distributing Linux. So they ditched Linux (and their CEO) and switched to concentrating on UNIX and changed their name to SCO for the name recognition.
But there was no scam -- at least with the UNIX royalties -- until the whole Linux shakedown started. Santa Cruz and Caldera sent Novell the checks and Novell pocketed the money. The Linux shakedown was just supposed to get IBM to buy them out, in which case it would have stayed business as usual. Things didn't hit the fan until after SCO tried to up the ante by threatening to sue Linux users over UNIX rights. And even then it took a while.
I'd have loved to have been in the Novell staff meeting when someone (I've always pictured a balding accountant with a slight paunch) looked up from his notes and said, "Hey, isn't SCO supposed to be giving most of the UNIX money to us?"
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They should allow open-source supporters to make donations to them. Someone should start an organized "Adopt a lawsuit" campaign. It is in our best interest to keep SCO's doors open until it gets trounced in court.
IANAL.... (Score:5, Insightful)
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Re:IANAL.... (Score:5, Insightful)
Unfortunately, lawyers can't use NormalSpeak. The maze that is modern law requires a very large amount of terms with very specific meanings to convery what is being said. It's wrapped up in hundreds (if not thousands) of years of history and the like, and embodies a large vocabulary of concepts, precedents, and methods.
That's why we like Groklaw, becuase they do a very good job of summarizing the legalese, as well as explaining it in context of the issues as they relate to tech.
Sadly, I don't think you'll see your wish any time soon. Legalese is probably going to get more complex over time than less.
Cheers
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Those requirements are impossible to meet, the law is hard to read because it is unambiguous and concise. Sure sometimes lawyers purposefully make the law confusing. But if laws were written in plain English there would be multiple interpretations of them leading to more confusion. Though I do agree all laws should include an English translation.
Re:IANAL.... (Score:5, Insightful)
Define NormalSpeak. New speech codec that only works on English?
Define "legal doings." Lawyer guano?
Define "boil this down." Are you talking about putting legal doings in a bubbling pot of water?
Define "us mortals." Presumably, it means that Cokie Roberts is immortal. Based upon past assumptions, this means that once Cokie Roberts boils down the lawyer guano, it's safe for everone else to use. Do you make bowls out of them or something? Or do you eat it to become immortal yourself?
To be serious, I know what you probably mean. The point is, though, that the language of the law will always be with us. It helps let one say exactly what they mean without room for interpretation, or to fit all interpretations that they want it to fit.
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The legal language is exact and well-defined.
Ok, I'll follow along...
The perceived "slipperyness" of lawyers is a side-effect of their function: To help their employers present effective arguments for the most-favorable-to-them interpretations of legal matters in dispute.
You mean to say that the job of a lawyer is to exploit the fact that laws, as written, are open to interpretation? That doesn't really sound very "exact" or "well-defined" to me. Certainly there is a lot of technical jargon involved, and some terms are very specific but, overall, I can't think of a single law, article of the constitution, or amendment which hasn't resulted in someone in the legal system having to interpret exactly what it means. And those interpretations often c
the short inaccurate version (Score:2)
It's called "being a professional" (Score:2)
Law should be open and accessible to all. (Score:3, Insightful)
Re: Once more (in English). (Score:3, Informative)
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"Could
Not as well as Groklaw.
Can anyone explain? (Score:2)
What are SCOSource license fees? And why would SCO owe Novell money? What does this have to do with Microsoft and Sun license fees?
I tried to read the Groklaw FA but I'm not getting it.
Anyone care to explain?
Thanks in advance.
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You basically missed episodes #6, #8, #34 and #42. Given that we are today at episode #300 or something and that nobody knows how many more are to come, it is impossible to summuarize the whole issue to you.
You could actually consider yourself lucky not to know.
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Novell is basically saying that SCO hasn't given them all the royalties SCO owes them.
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SCO fudged and didn't pay Novell the money from the Sun and Microsoft licenses.
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Either way, SCO owes Novell a lot of money...
Re:Can anyone explain? (Score:5, Informative)
SCO has been acting as if they had bought some sort of IP rights to SysV UNIX from Novell, and sold licenses based on those rights to Sun and Microsoft ("SVRX licenses").
Novell is now pointing at the actual text of the contract, which says that all SCO acquired was the right to act as an agent of Novell - basically, they can sell licenses in Novell's place, then hand over all the money to Novell. After that, Novell will return them 5% of the money as an agent fee.
It all seems pretty undisputable, from following Groklaw. As Novell claims SCO did its job badly so they won't even have to give them the 5% back, they're basically claiming that those cash infusions from Microsoft and Sun belong to Novell. And it's asking the judge to make haste, since this is simply their money, SCO is wasting it, and they'll soon be bankrupt.
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What are SCOSource license fees?
SCOSource license fees are the fees SCO charges to folks for [unix|linux] licenses. It seems very unlikely that they have the right to sell licenses for Linux (that is sort of what the lawsuits are about). They do have teh right to sell licenses for unix, which br
Re:SCOSource (Score:2)
It's only a spector (Score:5, Insightful)
Their stock has actually gone up! (Score:4, Interesting)
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This would mean that SCO falsely represented ownership claims to IBM in that lawsuit, and would have a huge liability regarding that fraud. In addition to all the other IBM counter claims, there is no way either Novell nor IBM would buy anything of SCO, if only to avoi
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It was a little strange because it was mostly garbage text, but the included gif explained it all... time to start buying!
Woo!
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People who expect a stock price to drop "sell it short;" that is, they sell shares they don't yet own, with a promise to buy later. Later, when the price (hopefully) drops, they actually pay for the shares they sold -- covering their sale. If they do enough of it, the price actually goes up a bit with all of the demand to buy the shares.
Most stock price day-to-day/week-to-week/month-to-month movement comes from this kind of game-playing, not from actual value-m
Re: Look again. (Score:3, Informative)
According to Yahoo [yahoo.com] it closed yesterday at $1.24 and spent the day bouncing around between $1.15 and $1.25, finally closing the day $1.17. That's down seven cents. It's a pretty volatile stock, but the trend has definitely been down as the case wound its way through the courts.
This is not exactly true. I haven't seen a "buy" recommendation on this stock in a long time. I think that the reason for the c
Resolved by bunkruptcy? (Score:4, Insightful)
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While generally bad(though a properly timed bankruptcy filing can be the best decision under the circumstances), and sometimes the first sign of a dead company, it doesn't free them from their other legal obligations. The case will likely go forward unless SCO outright liquidates, and even then the bankruptcy court
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There already are counterclaims by IBM and Novell, and a bankruptcy filing does not make them go away.
They've been doomed for how long now? (Score:5, Interesting)
I mean seriously. We've been hearing variations of the "OMG SCO is teh doomed!" now for so long my eyes just glaze over when I see another one.
Call me when Darl is in jail or flees the country.
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Oops, how embarrassing! I forgot to provide my number. You can call me at work. 1-800-986-8378. Ask for Weaselmancer, or "That Weasel guy".
SCO: Just Go Away. Let the Adults Work. (Score:2)
So hurrah for SCO's bankruptcy. Now the rest of us can finally get some proverbial litigation silence.
Live Sacrifice Required (Score:4, Insightful)
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And, if my intuition is correct, they intend to run themselves into insolvency in order to avoid being sued by their shareholders.
The insiders in the company have already made millions in either stock options, or (in the case of Baystar) selling long stock at a profit.
Everyone is happy in SCO land. The only
Really... (Score:3, Funny)
egregious punctuation (Score:3, Funny)
Rid of this specter (Score:2)
Personally, I'd rather have to worry about SCO; they were never a serious threat.
like getting excited about the Ford presidency (Score:2)
Don't die yet, SCO! (Score:2)
But I have been so enjoying the slow death - perhaps we could string it out a little longer?
Not so fast! (Score:2)
Typo (Score:5, Funny)
Shouldn't it be "sphincter"?
Next prediction.. SCO sues Tarantella/Sun (Score:3, Interesting)
- Didn't understand what they bought from Santa Cruz (i.e. they thought they "owned" Unix, when they really didn't).
- Didn't read the Santa Cruz - Novell APA, in which case they are morons for not reading the fine print in a multi-million dollar deal.
- Understood the APA, but were greedy/crooked enough to try to get away with 'converting' Novell's royalties.
After Novell smacks down SCO/Caldera into bankruptcy, I would bet to see a lawsuit from Caldera's investors against Sun (now owners of the old Tarantella/Santa Cruz) claiming that Tarantella/Santa Cruz mislead them and misrepresented the nature of what they were buying when Caldera bought the Unix assets.Re: (Score:2)
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Very much doubt it. If any stone would fall - it would fall on heads of Caldera's management.
Caldera really never wanted to sell Unix - it were acquiring rights so that it can easily migrate users o
Blast from the past (Score:2)
CALVIN: My gosh, those Commies are brilliant! You've got to hand it to 'em! "No, we didn't drop any bombs! Oh yes, our evil empire has collapsed! Poor, poor us!" I bet they've even asked the West for aid! Right?!
Ability to look over all docs? (Score:2)
Yeesh. (Score:2)
Schadenfruede (Score:2)
Just for laughs (Score:4, Insightful)
Ummm.... (Score:3, Informative)
Someone needs to take these guys out (Score:4, Funny)
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Doesn't matter. itsatrap. or fud. or notfud. or whatever.