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SCO and just desserts

Backspin By Mark Gibbs , Network World , 07/17/2008
Gibbs

We love it when Batman defeats the Joker because we love to see the bad guys get their just desserts. But as enjoyable as it is seeing fictional villains lose, it's far more satisfying when the bad guys get their comeuppance in real life. This is what just happened in a small but hopefully decisive way to the infamous Santa Cruz Operation.

For the last five years SCO has been on a quest to undermine the legal foundations of Linux. Over that period I've written about SCO's progress several times – the last was at the end of October 2007, in a column titled (rather cleverly if I say so myself) “Look out! It's FrankenSCO!”

Quick joke: Little Jimmy told his father he wanted a cowboy outfit for Christmas so his father bought him SCO.

Anyway, just a month earlier SCO had filed for bankruptcy protection and was running on fumes. Then along came an outfit named York Capital Management (a nom de guerre for JGD Management) that was going to throw SCO a financial life ring to the tune of $36 million.

Alas for SCO that deal was objected to by Novell and IBM (both of which, you will recall, SCO was in litigation with) as well as the Department of Justice's bankruptcy administration agency. Thus it was that SCO had to back out of the deal, and two days after Christmas '07 the company was de-listed from the Nasdaq.

When I wrote the FrankenSCO column I marveled at the sheer audacity of York Capital to want to invest in a business that was based on one of the most brazen scams ever seen in the high-tech world. Little did I know that York was not the only potential investor.

Nope, in the middle of February 2008, SCO announced a proposed deal with Stephen Norris Capital Partners (SNCP) that would give SCO up to $100 million, allowing the company to restructure, exit Chapter 11 and go private. In the process SCO would repay all of its creditors including Novell and IBM, but annoyingly a joint SNCP and SCO press release talked of "see[ing] SCO's legal claims through to their full conclusion." Curiously SNCP pulled out of that deal in April but then turned around and proposed simply buying SCO's assets!

On June 19 SCO got yet another extension (until Aug. 11) to file a bankruptcy reorganization plan with the courts (boo), and on July 16 a court found in Novell's favor and determined that SCO had to cough up $2,547,817 “for unjust enrichment and breach of fiduciary duty.” Hooray! Score one for the good guys.

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Comments (8)
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SCO and just dessertsBy Anonymous on July 29, 2008, 1:05 pm..."Could someone please explain how these investors could ignore more-or-less an entire market telling them that the case was unethical, unfounded and untenable..." Um...hello,...

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Wrong companyBy Anonymous on July 23, 2008, 10:37 pmDon't confuse SCO Group with Santa Cruz Operation.

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Inadequate Court CloutBy Anonymous on July 18, 2008, 7:14 pmFor certain concerns, investment - back door and otherwise - in SCO's legal wrangles is a cheap way to keep the Linux and general open source communities squirming....

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Easy, investment companies are playing with money from other peoBy Anonymous on July 18, 2008, 3:22 pmEasy, investment companies are playing with money from other people, so what do they care? Due to their horse blinders, they only see the potential gain, even though...

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Not quite rightBy Anonymous on July 18, 2008, 1:05 pmThe company suing world+dog over Linux is The SCO Group, not the Santa Cruz Operation, which became Tarantella, which was then was bought by Sun.

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