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SCO Group auctions UNIX division
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Comments (4)
If they can't find a buyer, the natural end result is Chapter 7 (dissolution) bankruptcy, but that brings its own set of complications.
For now, SCO has a loan from Ralph Yarro, with some pernicious terms. Converting SCO's bankrupts case to Chapter 7 immediately turns over many SCO assets (such as they are) to Yarro's possession, thus denying Novell the funds improperly converted by SCO.
The only upside I can see, is that Chapter 7 could "pierce the corporate veil" and expose the internal finances, including any and all monetary support from The Canopy Group and/or Microsoft.
For now, SCO has a loan from Ralph Yarro, with some pernicious terms. Converting SCO's bankrupts case to Chapter 7 immediately turns over many SCO assets (such as they are) to Yarro's possession, thus denying Novell the funds improperly converted by SCO.
The only upside I can see, is that Chapter 7 could "pierce the corporate veil" and expose the internal finances, including any and all monetary support from The Canopy Group and/or Microsoft.
Don't be too sure that they could pierce the corporate veil... The corporate veil refers to the protection of individuals from the creditors of the corporation, and has nothing really to do with the finances of the corporation.
In addition, converting their bankruptcy to a Chapter 7 wouldn't immediately expose their internal finances to the public. A creditor would need a valid reason for discovery, such as an allegation of a fraudulent conveyance (and not just one that is a "fishing expedition").
Plus, unless Yarro's loan was made under the Chapter 11 trustee as an administrative expense, he has to wait in line with other creditors. And, if any of the SCO debt to Novell was considered fraud, Novell would be able to petition the Bankruptcy Court for relief from stay and pursue their judgements immediately. There is no bankruptcy protection from a tort action based on fraud. But, first, you have to convince the Banktuptcy Court, which effectively means trying a fraud case twice. That, however is very unlikely to happen, as the Court would not likely grant relief from stay.
In addition, converting their bankruptcy to a Chapter 7 wouldn't immediately expose their internal finances to the public. A creditor would need a valid reason for discovery, such as an allegation of a fraudulent conveyance (and not just one that is a "fishing expedition").
Plus, unless Yarro's loan was made under the Chapter 11 trustee as an administrative expense, he has to wait in line with other creditors. And, if any of the SCO debt to Novell was considered fraud, Novell would be able to petition the Bankruptcy Court for relief from stay and pursue their judgements immediately. There is no bankruptcy protection from a tort action based on fraud. But, first, you have to convince the Banktuptcy Court, which effectively means trying a fraud case twice. That, however is very unlikely to happen, as the Court would not likely grant relief from stay.
@JaseP:
Yarro's loan was made post-Chap11, "for operating expenses".
And Novell's funds, improperly converted by SCO, were lumped in with pre-Chap11 creditors by the BK court.
Groklaw.net is your friend, but you'll need a strong stomach to wade through the mountains of litigious crap SCO and their lackeys have tossed around.
Yarro's loan was made post-Chap11, "for operating expenses".
And Novell's funds, improperly converted by SCO, were lumped in with pre-Chap11 creditors by the BK court.
Groklaw.net is your friend, but you'll need a strong stomach to wade through the mountains of litigious crap SCO and their lackeys have tossed around.
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Naturally I hope they can't find a buyer. It's time the SCO Group was dead and buried.