SCO hopes selling Unix will raise $36 million

The SCO Group, working to emerge from Chapter 11 bankruptcy protection, hopes to sell its Unix assets to York Capital Management for up to $36 million, the company said this week in regulatory and bankruptcy court filings.

Through the deal, York would provide SCO with $10 million in cash; up to $10 million in credit to fund its Linux-related legal fight and to get 20 percent of revenue from that action; $10 million for a 20 percent stake in the company; and $6 million to license the Hipcheck products from SCO's Me mobile device software effort and to share revenue from that line, according to the U.S. Bankruptcy Court filing.

SCO, which is engaged in expensive, controversial but so far largely fruitless Linux-related lawsuits against Novell and IBM, urged the court to approve an accelerated bidding process for the assets. The auction would allow others to offer a higher price than York, but time is of the essence, the company argued in the bankruptcy court filing.

"Based on debtors' (SCO's) financial condition, but more importantly the skittishness of existing and potential customers" to engage in a business relationship with SCO, "the debtors must move quickly to realize the highest and best price for their assets," the filing said.

The SCO Group has been beleaguered by steadily dwindling revenues. It suffered a major legal setback in August when a court found that Novell retained the Unix copyrights SCO thought it bought. But it looks like the Lindon, Utah-based company plans to keep on fighting: the asset purchase agreement specifically excludes the suits against Novell and IBM from transfer.

Unix has had a long and winding history as assets have been sold from the original sponsor of the operating-system project, AT&T. The assets were sold to Novell, then to the Santa Cruz Operation, then to Linux seller Caldera International, which renamed itself The SCO Group after trying to remake its business on the SCO Unix products. It's a tortured issue trying to decipher exactly what intellectual property--patents, trademarks, copyrights and trade secrets--traveled to new ownership or remained with earlier owners.

An SCO representative didn't comment beyond the filing. York didn't immediately respond to a request for comment.

[sismoc]

Die SCO, Die!!

And the sooner the better.

[enovikoff]

hear, hear

It's high time that the patent trolls started to get their just desserts. There's no place for power-over manipulations in an industry so full of opportunities, good ideas, and bright people that spending time in court is more of an lost opportunity than anything else.

[ferricoxide]

How do you sell what you don't own?

So, what would that $36Mn buy, any way?

[Dr. StrangeOne]

My thoughts exactly

>So, what would that $36Mn buy, any way?

uh, more litigation?

[adasha76]

in the bizness of doin bizness

"$10 million for a 20 percent stake in the company"

ha ha ha shame on them if they do. You'd have to be pretty crazy to invest in SCO now

[patkohler]

sell the stuff to IBM

I bet they would pay $40 million for the assets.

[Penguinisto]

Novell will likely get first refusal.

After all, SCO owes Novell at least $36m and more in unpaid
licensing fees...

This move on SCO's part is just a slimy last-ditch effort to divest
itself of anything useful before it goes under. I suspect the judge
(soon) will (hopefully) forbid any such thing.

/P

[chuck_whealton]

Re: Novell will likely get first refusal.

I hope the judge does see it for exactly what it is. They lost, fair and square, and now they're trying to pull this garbage.

They should be ashamed of themselves. Especially their CEO. He led them full force down that path.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com

[WJeansonne]

Schlocklaw is eating crow this morning...

he, he, eh. As the saying goes, it ain't over until the fat lady sings!

[devbost]

Beg pardon?

This infusion of cash is going to do nothing more than forestall the inevitable demise of SCO. If anyone's eating Crow, it's the stakeholders of York Capital, who are watching $36 million of their money get poured into more fruitless litigation that has little to no chance of succeeding.

If anything, Groklaw gets to kick McBride around for a little longer as a result of this. They're probably out buying champagne over it as I type this.

[ewelch]

York is out of the minds

If they give SCO that money, they are out of their minds. What a
joke SCO has become. What sane person would do business with
those SCOundrals?

[Mister C]

Sleep With The Fishes!

When you get into bed with M$ don't be
surprised when it blows up in your face.

RIP!