SCO Group files for Chapter 11 Bankruptcy

Tuxrocks has the bankruptcy filing: http://sco.tuxrocks.com/Docs/SCO_CH11/SCO_CH11-1-B.pdf

Novell is missing, I'm sure they owe Novell money. And those debts are piddling.

They probably left it out because they don't know how much they owe Novell. They're still arguing about that. IIRC the judge said that Novell was entitled to a (large) part of the MS and other license money, but not all.

Quoting:IIRC the judge said that Novell was entitled to a (large) part of the MS and other license money, but not all.

I believe SCO's part is 5% and Novell 95%.

> I believe SCO's part is 5% and Novell 95%.

If I'm Novell, my position now is that SCO forfeited their rights to the 5% (and owes interest). This is gonna get Ugly. I think the directors and officers of SCO have significant personal liability.

Also, SCO's quarterly 10-Q filing was due yesterday. It doesn't look like they filed it.

>I think the directors and officers of SCO have significant personal liability.

Why do you think that?

Lawsuits against directors and officers alleging mismanagement have become commonplace when companies go belly up. And SCO has done a lousy job of disclosing potential liabilities to their shareholders.

My take on this is that SCO had a fiduciary responsibility to pass royalties along to Novell. SCO is not a debtor to Novell in the usual sense. The cash actually belonged to Novell, with SCO acting as agent. But (most of) that cash is gone.

So you have to add that to the mix of "normal" lawsuits by shareholders and creditors. I don't know, maybe those suits won't be successful, but it's certainly not a position I'd want to be in.

>Lawsuits against directors and officers alleging mismanagement have become commonplace when companies go belly up.

Lawsuits for all kinds of things have become commonplace. Personal liability, however, does not come as the result of somebody filing a lawsuit. It comes as the result of somebody winning a lawsuit, and that is a different matter altogether.

Mismanagement, btw, is not sufficient reason to impose personal liabality. Personal liability requires actual bad faith.

Missing in action. Has any one seen Laura Didio or Rob Enderle!. SCO is desperate for their help.

dinotrac...

IMO, SCO has engaged in behavior that borders on securities fraud. The SEC has stepped up enforcement efforts against individuals by levying fines and penalties. Meanwhile, the business environment is changing. (Settlements with Enron's and Worldcom's directors actually precluded them from seeking insurance reimbursement.)

I have a great deal of respect for your interpretation of the law, but the fact is that a large number of these suits end up being settled outside of court. Losing a court case is not the only way to assume personal liability.

jrm -

With all due respects, if you were to take a close look at filing of this type, you would find:

1. Most suits get bounced out of court at some point in motion practice, never making it to trial.

2. Of the suits that get settled, there is significant evidence of bad faith on the part of directors and/or the company has indemnified the directors against personal liability in all but the most egregious situations, and

3. Directors nearly never end up holding the bag personally for their corporate actions.

That's actually a good thing, BTW, or companies would never be able to recruit competent outside directors.

Quoting:I believe SCO's part is 5% and Novell 95%.

Nope :-) You're talking about the fee. That works differently. SCO should pay 100% to Novell, then afterwards Novell pays 5% back to SCO for handling the client.

The discussion I am talking about has to do with the recent ruling that Novell owns the copyrights. You see, Novell only owns the copyright of what they sold in 1995. Anything SCO developed after 1995 is SCO's property. However, SCO did very little development since 1995. What they're arguing about now (or will argue about again after the chapter 11 bankrupcy stay goes away) is how much of MS's license money was for Novell's 1995 code and how much was for SCO's stuff developed after 1995. Ofcourse, SCO trying to argue that the vast bulk of the money was for the post-1995 stuff.

Quoting:Ofcourse, SCO trying to argue that the vast bulk of the money was for the post-1995 stuff.

SCO doesn't have to argue at all, Darrell Mcbride will tell the truth, for once in this endeavor, that the money was for a service supplied to MS. :)

Haha, yes :-) SCO always has a nice way of trying to wiggle the left foot free and shooting themselves in the right foot at the same time :-)