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SCO Files Chapter 11, Plans Reorganization, Lawsuits On Hold

By Scott M. Fulton, III, BetaNews

September 14, 2007, 7:05 PM

After the close of business Friday, the SCO Group -- which was recently found not to own the UNIX trademark after all -- announced it would be filing for Chapter 11 bankruptcy protection.

In a prepared statement, SCO President and CEO Darl McBride said, "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. Chapter 11 reorganization provides the Company with an opportunity to protect its assets during this time while focusing on building our future plans."

Only the headline of tonight's press release referred to "potential financial and legal challenges," although the remainder of the statement did not mention whether its future plans involve continuing or withdrawing its lawsuits against Novell and IBM. The company did say it planned to devote the cash flow from its consolidated operations to meeting its business needs in the near term, pending approval by a bankruptcy court.

Contributors to Groklaw late today located SCO's legal filing for bankruptcy in Utah, which by law lists the company's many creditors. At the top of the list, the company owes just over a half-million dollars to document management firm Amici, a company profiled in a 2005 Wall Street Journal article as having close ties to attorney David Boies.

Chapter 11 bankruptcy protection in the US enables a company to continue doing business while a court-appointed overseer maintains its ledger. A contributor today informed Groklaw that Monday's proceedings in the SCO v. Novell trial have been indefinitely postponed.

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By Alex Stevens

posted Sep 17, 2007 - 2:38 AM

SCOwned.

Score: 0

By DeadFly

posted Sep 16, 2007 - 4:43 PM

I think when SCO is finally gone, someone should create a public memorial to it... that way people can dance on their grave. Hmm, it might get kinda gross though as I can see people wanting to piss on SCO's grave as well.

Score: 0

By rsx508

posted Sep 16, 2007 - 9:39 PM

They already have a public memorial. It's porcelain and mounted on tiled walls and has a ceremonial toggle handle with chrome plating. I stop to pay my respect to it several time each day.

Score: 0

By foxfyre

posted Sep 16, 2007 - 3:51 AM

Don't let the door hit you on your way out.....

Score: 0

By ingram091

posted Sep 16, 2007 - 2:50 AM

See this is the point all this Chapter 11 BS is wrong. Both with this and the airlines and any other entity that uses Chapter 11 to write off their incredibly bad business decisions and lack of any thing of a resemblance of a good business model, and yet still be allowed to operate and in the end repeat all the same mistakes costing people more millions upon millions of dollars to justify their Legal losses. Basically they are saying Well we lost but now that we are in Chapter 11 we do not have to pay for that loss, and we are going to refile and if we win this time you will pay out the nose with no choice in the matter, and we will be justified in our filing legal action after legal action to get our unjustified way. The point is if they go into Chapter 11 they should be FORCED to change their business model. If not then dismantled. This should be the case for airlines as well, if they can not operate anymore under their current business practices, then Maybe they should not be in the business of flying passengers around the world anymore and make way for a company that can. In this case SCO should just basically disappear as a company and let the people that actually run Linux do things as they have been with success for over a decade now.

Score: 0

By leo132

posted Sep 16, 2007 - 2:18 AM

SCO tried to make some quick money from Linux, with the support of Microsoft, Like US funded Pakistan and Bin Ladens to fight USSR.
Rest is history.

Score: 0

By rsx508

posted Sep 16, 2007 - 9:39 PM

errr, um, uh, what?

Score: 0

By leo132

edited Sep 15, 2007 - 11:04 PM

SCO was trying make some quick buck from Linux, with help of Microsoft, who paid huge sum to fight the case against Linux. Like US funded Pakistan and Bin Ladens to fight USSR. Yes rest is history.

Score: 0

By imafurby

posted Sep 16, 2007 - 2:18 PM

Your data seems to be repeating itself.

Score: 0

By mjm01010101

posted Sep 15, 2007 - 12:52 PM

What was amazing was how long and drawn out this whole thing was. I expected a few years, max.

Score: 0

By tarrith

posted Sep 15, 2007 - 6:59 AM

If this was the last I ever read about SCO it would.t be a moment too soon. When finally it dies the death it deserves there will be nary a tear to be found.

Score: 0

By kbsoftware

posted Sep 15, 2007 - 12:06 AM

This whole law suit pretty much blew up in their faces, in a big way.
Just remember if you ever need a lawyer, don't use the same ones SCO did.

Score: 0

By amroliwala

posted Sep 14, 2007 - 10:34 PM

Awesome! Great news...great news...

Score: 0

By meb

posted Sep 14, 2007 - 9:17 PM

This is likely NOT to affect Novell collecting.

The judge has already ruled in Novells favour, and as such SCO were acting as a collection agency.

In that sense, they are not so much a debter (Novell), but actually SCO is holding assets of Novells.

Just because one 'contributor' to Groklaw posts that the case is indefinitely postponed, doesn't make it so.

Kimbell is bound to have quite a bit to say, particularly after SCO were repeatedly asked if they could proceed financially.

Statements made by SCO and even Darl McBride could also see him/the company in some sticky water...

1. Contempt of court.
2. SEC may investigate about 'misleading' statements made to shareholders.

This story is far from over.

Score: 0

By Alexq

posted Sep 14, 2007 - 7:57 PM

Great news.

Score: 0

By ogman

posted Sep 14, 2007 - 8:39 PM

Yes, it is.

Score: 0

By dougau

edited Sep 14, 2007 - 10:27 PM

And they filed bankruptcy on their law firm. Poetic justice :)

Score: 0

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