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Feature: Business

SCO files for bankruptcy

By Joe Barr on September 14, 2007 (9:05:02 PM)

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SCO announced today that it has filed for reorganization under Chapter 11 of the US Bankruptcy Code. Business operations, according to SCO, will continue as normal during the reorganization.

SCO is best known these days for its baseless intellectual property claims against Linux companies and Linux users, but as it became increasingly clear that the legal cases against IBM, Novell, Red Hat, and others were without merit, the stock price dropped as investors stopped betting on the cash boon they were gambling on winning. The company's stock lost 43% of its value today, last trading at 37 cents, down from around $20 a share in 2003, shortly after the company filed its first lawsuit.

At one point. Darl McBride -- the CEO who has walked SCO off the legal gangplank -- claimed that Linux contained and was infringing the copyright on a million lines of code belonging to SCO. Linus Torvalds responded at the time to McBride's claim by saying "He's lying." A judge eventually agreed with Torvalds.

Microsoft guaranteed investments in the SCO case through a third-party investment firm, but even with help from Redmond, SCO is now admitting that it prefers to simply shrug off its debts through Chapter 11 than to continue bleeding red ink.

The press release:

The SCO Group Files Chapter 11 to Protect Assets as It Addresses Potential Financial and Legal Challenges

Reorganization ensures business as usual and that assets remain for continued support of customers and channel partners

LINDON, Utah, Sept. 14 /PRNewswire-FirstCall/ -- The SCO Group, Inc. ("SCO") (NASDAQ:SCOX) , a leading provider of UNIX(R) software technology and mobile services, today announced that it filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code. SCO's subsidiary, SCO Operations, Inc., has also filed a petition for reorganization. The Board of Directors of The SCO Group have unanimously determined that Chapter 11 reorganization is in the best long-term interest of SCO and its subsidiaries, as well as its customers, shareholders, and employees.

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."

The SCO Group has filed a series of first day motions in the Bankruptcy Court to ensure that it will not have any interruption in maintaining and honoring all of its commitments to its customers. The motions also address SCO's continued ability to pay its vendors, the retention of various professional advisors, and other matters.

About SCO

The SCO Group (NASDAQ:SCOX) is a leading provider of UNIX software technology and mobile services. SCO offers UnixWare for enterprise applications and SCO OpenServer for small to medium businesses. SCO's highly innovative and reliable solutions help customers grow their businesses everyday, especially into the emerging mobile market. SCO owns the core UNIX operating system, originally developed by AT&T/Bell Labs and is the exclusive licensor to UNIX-based system software providers. The Me Inc., product line focuses on creating mobile platforms, services and solutions for businesses and enhances the productivity of mobile workers.

Headquartered in Lindon, Utah, SCO has a worldwide network of thousands of resellers and developers. SCO Global Services provides reliable localized support and services to partners and customers. For more information on SCO products and services, visit http://www.sco.com/.

SCO and the associated logos are trademarks or registered trademarks of The SCO Group, Inc. in the U.S. and other countries.

Forward Looking Statements

The statements contained in this press release regarding (i) filing for protection under Chapter 11 and our reorganization efforts under Chapter 11 bankruptcy protection, and (ii) other statements that are not historical facts are forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks and uncertainties. We wish to advise readers that a number of important factors could cause actual results to differ materially from historical results or those anticipated in such forward-looking statements. These factors include, but are not limited to the outcomes and developments in our Chapter 11 case, court rulings in the bankruptcy proceedings, the impact of the bankruptcy proceedings on our other pending litigation, our cash balances and available cash, continued competitive pressure on the Company's operating system products, which could impact the Company's results of operations, adverse developments in and increased or unforeseen legal costs related to the Company's litigation, the inability to devote sufficient resources to the development and marketing of the Company's products, including the Me Inc. mobile services and development platform, and the possibility that customers and companies with whom the Company has formed channel partnerships will decide to terminate or reduce their relationships with the company. These and other factors that could cause actual results to differ materially from those anticipated are discussed in more detail in the Company's periodic and current filings with the Securities and Exchange Commission, including the Company's Form 10-K for the fiscal year ended October 31, 2006 and Form 10-Q for the fiscal quarters ended January 31, 2007 and April 30, 2007, and future filings with the SEC. These forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date.

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on SCO files for bankruptcy

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Thank you!

Posted by: Anonymous [ip: 76.110.127.100] on September 14, 2007 09:31 PM
There is a God!! I knew it!

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Re: Thank you!

Posted by: Anonymous [ip: 82.212.49.168] on September 16, 2007 01:01 AM

What you talking about???

"Filing for bankruptcy" == "management avoiding responsibility". Bankruptcy is basically protection from personal responsibility.

And we all here wish Darl "best" - including personal responsibility of spiraling the whole business down into nothingness.

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Re(1): Thank you!

Posted by: Anonymous [ip: 70.153.27.160] on September 20, 2007 03:19 PM
I don't think many folks will want to sign a contract with a bankrupt company. Those that have existing contracts will surely be looking for ways to bail. Else they deserve the results of natural selection. Same with their employees. How would you like to have SCO on your resume.

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SCO files for bankruptcy

Posted by: Anonymous [ip: 96.232.49.191] on September 14, 2007 09:35 PM
Well I've been waiting for this moment for a long time. and now I'm happy

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SCO's FUD had a bitter after taste I hope...

Posted by: Anonymous [ip: 162.129.104.198] on September 14, 2007 10:06 PM
/dance

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SCO files for bankruptcy

Posted by: Anonymous [ip: 137.99.65.243] on September 14, 2007 10:46 PM
it's gin and tonic for me tonight. and probably for darl mcbride, too - the farce is finally over.

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SCO files for bankruptcy

Posted by: roblimo on September 14, 2007 11:46 PM
Lots more details <a href="http://www.groklaw.net/article.php?story=20070914152904577">now at Groklaw</a>. Hmm..... I wonder.... What is Groklaw going to do now?

- Robin

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Re: SCO files for bankruptcy

Posted by: Anonymous [ip: 4.236.204.3] on September 15, 2007 01:04 AM
Robin, your idiocy never ceases to amaze me. First giving an award to Microsoft at Linux World, now acting like a dumbass by not noticing all the other topics covered by Groklaw. The information on OOXML and the ISO alone is worth a visit to the site.

The real point everyone is missing is that this may completely freeze all of their court dates, which I find regrettable.

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Re(1): SCO files for bankruptcy

Posted by: roblimo on September 15, 2007 05:15 AM
Dear Humorless,


1) I never gave Microsoft an award at LinuxWorld. Ye be daft and mistaken.


2) Of *course* Groklaw will continue to be worthwhile. Become less laughless in your life and you will be less inclined to bitterness and hatred.


3) I'm glad you choose me to insult and lie about rather than doing it to someone close to you. If this is the only joy you have in your life, I am glad I am around to give it to you. :)


- R

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Re(2): SCO files for bankruptcy

Posted by: Anonymous [ip: 24.80.34.124] on September 15, 2007 07:08 PM
Robin gave an award to Microsoft at LinuxWorld. Well I'll be damned.

Try to get those worms back in the can Robin. It's going to be all over the net now. I'm afraid you're fscked.:-(

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Re(3): SCO files for bankruptcy

Posted by: Anonymous [ip: 4.237.53.227] on September 15, 2007 10:00 PM
If I remember correctly, he colluded with Chris DiBona (or one of the Slashdot people) to give Microsoft some kind of Linux World "Open Source" award at their New York show several years ago, for their "Services For Unix" repackaging. Free publicity that some other project could have certainly used, and used better.

He thought it was "funny", but then judging by his original comment he is significantly humor-impaired. When you are actually funny, Robin, I will be among the first to laugh.

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I don't... get it! What about the *profitable* mobile technology?

Posted by: Anonymous [ip: 76.105.104.17] on September 15, 2007 12:17 AM
Didn't Darl said the business has a potential of 70 billions and SCO wants at least 20% of that?

I just don't... get it. And, and McBribe did say that SCO was doing fine.

:) :) :)

Honest! I really don't.

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SCO files for bankruptcy

Posted by: Anonymous [ip: 24.18.54.75] on September 15, 2007 12:51 AM
Let me be the first to say"HAHAHAHAHAHAHAHAHAH!!!!"
Darl sez "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". Right, he says this while they're FILING FOR BANKRUPTCY. lolololol!!!

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SCO files for bankruptcy

Posted by: Anonymous [ip: 207.189.187.16] on September 15, 2007 12:57 AM
will continue as normal?

More of the same?

Is that the plan?

I can't wait.

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Sign of Insanity?

Posted by: Anonymous [ip: 75.36.25.78] on September 15, 2007 03:34 PM
Isn't that a sign of insanity -- doing the same thing over and over again, and expecting different results?

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SCO files for bankruptcy

Posted by: Anonymous [ip: 70.188.21.140] on September 15, 2007 01:20 AM
Yes, the is the best news I've heard in while!

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SCO files for bankruptcy

Posted by: Anonymous [ip: 84.228.97.118] on September 15, 2007 01:21 AM
I hope Billy and friends are watching. This is what happens to hypocrites :)

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Hooray!

Posted by: Anonymous [ip: 88.112.13.58] on September 15, 2007 01:28 PM
Hooray!

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SCO files for bankruptcy

Posted by: Anonymous [ip: 76.84.189.212] on September 15, 2007 09:54 PM
Nice.

Ordinary people were cut off from the benefits of filing bankruptcy by changes in the law engineered by "campaign contributions" to our politicians, but "corpus people" were not.

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Re: SCO files for bankruptcy

Posted by: Anonymous [ip: 24.80.34.124] on September 16, 2007 09:21 PM
Well of course not. Corporations are owned by people who matter. People who can't be bothered to set up shell corporations to avoid personal bankruptcy are just too useless to protect.

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SCO files for bankruptcy - fact check

Posted by: Anonymous [ip: 207.6.254.232] on September 17, 2007 06:48 AM
You wrote:
"At one point. Darl McBride -- the CEO who has walked SCO off the legal gangplank -- claimed that Linux contained and was infringing the copyright on a million lines of code belonging to SCO. Linus Torvalds responded at the time to McBride's claim by saying "He's lying." A judge eventually agreed with Torvalds."

While I'm no fan of SCO (any more) or McBride (ever), the above might lead some to a false conclusion. No judge has yet to rule on whether or not Linux infringes on any copyrights -- what the judge has ruled is that SCO does not *own* the copyrights so any infringement is moot as it is not SCO's to prosecute. Linux may infringe but the copyright owner (Novell) has stated it will not pursue any copyright infringements.

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Re: SCO files for bankruptcy - fact check

Posted by: Anonymous [ip: 24.80.34.124] on September 17, 2007 03:24 PM
I say you infringe on my copyrights in your comment. No judge has yet to rule that I do not own the copyright. You may infringe but since you are unable you will not pursue any copyright infringements.

Why are you disseminating this FUD about Linux copyright. It would be far more factual to point out that SCO is completely lacking in credibility (lying) when they talk of Linux copyright violation and that no one with any credibility has ever accused Linux of copyright violation. If you want to split hairs I've got a fine razor too.:-)

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Re(1): SCO files for bankruptcy - fact check

Posted by: Anonymous [ip: 24.80.34.124] on September 17, 2007 03:26 PM
That should be "I am unable to pursue..."

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SCO files for bankruptcy

Posted by: Anonymous [ip: 212.67.36.147] on September 17, 2007 08:43 PM
Hip, hip, hip, houra !
Champagne !
Now, Microsoft turn ?

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SCO files for bankruptcy

Posted by: Anonymous [ip: 70.50.248.176] on September 17, 2007 10:02 PM
take that you dipsh*ts! w00t!

*dances on SCO's tumb*

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SCO files for bankruptcy

Posted by: Anonymous [ip: 72.67.62.247] on September 18, 2007 01:51 AM
I seem to remember a bunch of naysayers many years ago actually believing and defending SCO's trash. Well, history has proven otherwise, hasn't it? Finally, the beginning of the end for SCO. It's been a long time coming.

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Re: SCO files for bankruptcy

Posted by: Anonymous [ip: 205.208.133.68] on September 18, 2007 05:19 AM
Chapter 11 is rarely a death knell for a corporation, it is just a sign that they can't (or don't want to) pay their bills. Usually, the banks will take over the company and restructure it to become profitable enough so that it can pay its bills, generally by replacing upper management and laying off a lot of people.

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SCO files for bankruptcy

Posted by: Anonymous [ip: 58.71.34.138] on September 20, 2007 11:57 AM
SCO deserves to go under, and worse. These dolts served as the M$ attack dogs, and they are getting their just desserts. McBride can now go looking or a job at WalMart.

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SCO files for bankruptcy

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SCO files for bankruptcy

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Good


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SCO files for bankruptcy

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Good Jobs, thanks..
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SCO files for bankruptcy

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SCO files for bankruptcy

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