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SCO Admits They Might Just Not Win - Maybe

Zonk posted more than 7 years ago | from the it-tolls-for-thee-sco-it-tolls-for-thee dept.

Linux Business 126

inetsee writes "According to Groklaw, SCO has admitted in a 10K filing that if the court grants any or all of IBM's six motions for summary judgement, 'We can not guarantee whether our claims against IBM or Novell will be heard by a jury.' The site goes through a statement by statement run-down of SCO's filing, noting things like the absence of employee numbers (a piece of information they told investors they would disclose). Elsewhere in the document, it is revealed that SCO's stock is in danger of being delisted from NASDAQ, they may come under further litigation from an unrelated legal matter, and SCO is now claiming that OSes like HP-UX and Solaris are derivatives of code that they 'own'. Despite the dire pronouncements throughout the filing, if everything else runs according to plan their 10K indicates they could keep fighting the good fight for another 12 months."

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126 comments

1000 times par value, still. (0)

Short Circuit (52384) | more than 7 years ago | (#17812796)

According to Google [google.com], SCOX is will open today at $1.00/share. According to Caldera Systems's certificate of incorporation [edgar-online.com], their stock has a par value of $.001 par value, so their market price is still 1000 times their par value.

Whether or not SCO survives, anyone taking a paycheck from them has already made their cash.

Re:1000 times par value, still. (4, Informative)

Otter (3800) | more than 7 years ago | (#17813042)

Par value is a non-zero value that the stock needs for regulatory reasons. It's as meaningless as, well, cautionary statements made in a 10K filing. It has nothing to do with how much profit any stockholder has made.

Re:1000 times par value, still. (5, Informative)

tessaiga (697968) | more than 7 years ago | (#17813068)

Not sure who modded you insightful, but in today's regulated markets, par value for stocks is essentially a meaningless concept. Companies can basically set it at whatever value they like, and it has no relation to the IPO value or any other meaningful quantity. From the Motley Fool glossary [fool.com]:

Par value (stock)

An arbitrary dollar value that a company assigns to its shares. Par value has no economic significance. The legal significance of par value is, roughly, that if shares are issued below par value, the holders of those shares might be assessed the difference between par value and the issue price. Most stock certificates state that the shares are fully paid and nonassessable to indicate that holders are not on the hook for additional contributions because the shares were issued at a price greater than par value. Companies usually assign a very low par value to common stock.

Not to mention, most CxOs and other highly-placed insiders make their money from option grants, whose strike price the company's board can set to guarantee a profit for the recipients no matter where the current stock price is.

Re:1000 times par value, still. (1)

jaweekes (938376) | more than 7 years ago | (#17814146)

I am not 100% sure but I think you have to maintain a share price of $1 or more to stay listed in the Nasdaq. In other words, if SCOX's price falls below $1, I think they will be delisted.

I'm sure someone will correct me if I am wrong...

Re:1000 times par value, still. (1)

Short Circuit (52384) | more than 7 years ago | (#17814266)

That's my understanding, too.

That doesn't mean people can't still purchase their stock, though. They just have to know where to go to buy it.

Re:1000 times par value, still. (3, Informative)

sconeu (64226) | more than 7 years ago | (#17814978)

Not quite. SCOX has closed below $1.00 a few times. My understanding (IANASB -- I am not a stock broker) is that you have to be below $1.00 for an extended period of time (30 days?) before you're in serious danger of delisting.

SCO should skip Trial by Jury (5, Funny)

Anonymous Coward | more than 7 years ago | (#17812832)

...and demand Trial by Combat.

And I'm not just saying that because I want Darl whacked by a sword.

Re:SCO should skip Trial by Jury (5, Funny)

Teresita (982888) | more than 7 years ago | (#17813198)

And I'm not just saying that because I want Darl whacked by a sword.

IBM: What are you going to do, bleed on me?

SCO: I'm invincible!

IBM: You're a looney.

SCO: SCO always triumphs! Have at you! Come on, then. [whop]

[IBM chops SCO's last leg off]

SCO: Oh? All right, we'll call it a draw.

IBM: Come, Patsy.

SCO: Oh. Oh, I see. Running away, eh? You yellow bastards! Come back here and take what's coming to you. I'll bite your legs off!

Re:SCO should skip Trial by Jury (4, Funny)

shadowknot (853491) | more than 7 years ago | (#17813256)

One small correction

SCO: Oh. Oh, I see. Running away, eh? You blue bastards! Come back here and take what's coming to you. I'll bite your legs off!

More like this (4, Funny)

splatterboy (815820) | more than 7 years ago | (#17814628)

SCO Lawyer: Our motion to compel was denied by the judge
Darl McBride: Denied? Inconceivable!
SCO Lawyer: Our sealed motion for reconsideration, which tossed out 187 of SCO's items of allegedly misused materials by IBM, was also denied by the judge
Darl McBride: Denied? Inconceivable!
SCO Lawyer: Most recently, our motion for Motion for Relief for IBM's Spoliation of Evidence was denied by the judge
Darl McBride: Denied? Inconceivable!

IBM Lawyer: You keep using that word, I do not think it means what you think it means...

SCO vs. SCA (1)

Weaselmancer (533834) | more than 7 years ago | (#17814054)

I'm in the SCA, and would love the opportunity. Only problem is, once we smashed them on the field they'd sue us. Clearly we're a derivative work. Two out of three of our letters are the same.

Re:SCO should skip Trial by Jury (1)

meringuoid (568297) | more than 7 years ago | (#17817040)

And I'm not just saying that because I want Darl whacked by a sword.

Not fatally, mind. He'll be up against one of the Nazgul. They go in for Morgul-blades, slow poisoning leading to hideous wraithform undeath... wait, how would we know the difference?

Stock price... (3, Interesting)

eggoeater (704775) | more than 7 years ago | (#17812834)

Isn't SCOs stock price/equity low enough to where IBM could just buy them outright?
Or at least 51%.


Re:Stock price... (5, Insightful)

Spad (470073) | more than 7 years ago | (#17812866)

Which is exactly what SCO want - to be bought up rather than to lose the case and end up bankrupt.

Not to mention the precedent it would set for other low-lifes to start legal action against IBM with the hope of being bought.

Re:Stock price... (3, Interesting)

eggoeater (704775) | more than 7 years ago | (#17812948)

Yes, but unlike other low-lifes, SCO does have some
IP (NO I'm not talking about Linux) and other non-lawsuit related
revenue sources that could make it a good buy.

You make a good point though. IBM should wait until there's a judgment against SCO and the stock will plummet.

IBM could make arrangements with some of the larger private (non-employee)
stock holders to buy the stock at a higher price so the upper management doesn't
reap the rewards of a buy out. Once they get 51% they can dissolve the company
and absorb the assets.


Re:Stock price... (3, Interesting)

KokorHekkus (986906) | more than 7 years ago | (#17813220)

...IBM could make arrangements with some of the larger private (non-employee) stock holders to buy the stock at a higher price so the upper management doesn't reap the rewards of a buy out...
Besides the posion pill plan there are other problems: According Yahoo Finance 44.5% of the shares are held by insiders. I would be very very surprised if at least 6% of the shares is held by some non-insider that is very close and comfy with the insiders. Indirect indications of this is were the keeping up of the share price by somone who bought sizeable chunks (relative to the days trade) of stock near the end of the day.

But here is the real kicker... about riskfactors from their 10Q:

The right of our Board of Directors to authorize additional shares of preferred stock could adversely impact the rights of holders of our common stock. Our Board of Directors currently has the right, with respect to the 5,000,000 shares of our preferred stock, to authorize the issuance of one or more additional series of our preferred stock with such voting, dividend and other rights as our directors determine. The Board of Directors can designate new series of preferred stock without the approval of the holders of our common stock. The rights of holders of our common stock may be adversely affected by the rights of any holders of additional shares of preferred stock that may be issued in the future, including without limitation, further dilution of the equity ownership percentage of our holders of common stock and their voting power if we issue preferred stock with voting rights. Additionally, the issuance of preferred stock could make it more difficult for a third party to acquire a majority of our outstanding voting stock.
Now isn't that a nice (in the most cynical manner) way to have pretty much full control over what happens with your stock - 45% is held by insiders... who can choose to dilute the voting power of common stock holders. (Bold emphasis added by me)

Re:Stock price... (0)

Anonymous Coward | more than 7 years ago | (#17815604)

"IBM should wait until there's a judgment against SCO and the stock will plummet."

I don't think IBM would be the only vulture circling overhead waiting to pick the remaining meat off the dead bones of SCO in this case.

Re:Stock price... (1)

speculatrix (678524) | more than 7 years ago | (#17813764)

it was once observed by Israel that going to war with the USA and losing resulted in massive investment by the USA into your country... and senior politicians jokingly debated declaring war and rapidly losing... but then decided there was a risk of winning!

Or that's how that bit of urban legend came to me.

Re:Stock price... (3, Informative)

MrNiceguy_KS (800771) | more than 7 years ago | (#17814468)

Check out a great movie called "The Mouse That Roared" starring Peter Sellers (in several roles). It's a very funny movie based on this premise. I stumbled on it in my local library back in college.

A tiny European country with a failing economy declares war on the U.S. planning to lose and then collect millions in post-war aid. Unfortunately they win.

Re:Stock price... (1)

contrapunctus (907549) | more than 7 years ago | (#17815994)

I've heard this (no reference, sorry) about a very poor city or county in one of the Dakota states as means to get federal funds (or enough publicity to the same effect).

Re:Stock price... (5, Funny)

stanmann (602645) | more than 7 years ago | (#17812884)

IBM could have bought them any time they wanted. They haven't because they're going to kill them, burn them, stomp the ashes, salt the earth, burn the salted earth, burn the salty earthy ashes, stomp that out, pour gasoline around, burn the remaining mess, and then piss on it to put it out.

Re:Stock price... (1)

Captain Sarcastic (109765) | more than 7 years ago | (#17814120)

IBM could have bought them any time they wanted. They haven't because they're going to kill them, burn them, stomp the ashes, salt the earth, burn the salted earth, burn the salty earthy ashes, stomp that out, pour gasoline around, burn the remaining mess, and then piss on it to put it out.
"And then, Vir, he would have gotten nasty..." (paraphrase from Dust to Dust, Babylon 5 (Season 3)

Re:Stock price... (1)

Random BedHead Ed (602081) | more than 7 years ago | (#17812952)

That may have been the original purpose of the lawsuit. But IBM has the cash and the legal expertise to make anyone who threatens them like this very sorry. Case in point: SCO is very sorry. Those of us who have been reading about this lawsuit from day one have been grinning from ear to ear from day one as well, but the past few months have been particularly entertaining. Here's hoping no one buys SCO. Ever.

Re:Stock price... (0)

Anonymous Coward | more than 7 years ago | (#17813510)

Why would anyone after this? What's the value? If they lose, you think someone else will want to try? Does UNIX mean anything to anyone if they lose?


When I was younger, like in 1992ish, I thought that there was some value in real UNIX. I was mid-teens and UNIX was moving around. I had this feeling that the actual code age meant something and that there was like some sort of precursor knowledge in it. Linux was raw and primitive, workable, but not UNIX. The fact that the same code had been running somewhere for 20 years meant it was of quality.


The reality is, of the successful commercial UNIXes, (Mac OSX, AIX, Solaris, HPUX, and I'll include the defunct TRU64) they basically run well on a very small set of hardware. They all have shitty default tools and I've maybe one time actually seen someone using one without GNU tools. It's a custom hardware kernel, shitty tools and some custom management tools, that's what makes a commercial UNIX anymore (ignoring Apple.) If you look at the actual SCO products, it's a joke. It's more primitive than Linux was in like 1996 or 1997 and it's nowhere near Linux today, in any capacity. I'm certain Linux is more reliable, runs on more hardware, scales better, performs better and even has more POSIX support. (Can you do threads on SCO yet?)


I thought it was foolish when AT&T sold UNIX, I thought it was foolish that IBM, Sun or somebody didn't buy it. In retrospect, it was brilliant. SCO is stuck in a bad place, they believed that UNIX was in and of itself valuable and they have an old crummy UNIX that they haven't kept up with the times. I think this lawsuit was like the only chance that they possibly had and it's an all or nothing play. I cannot understand why anyone would buy them, other than their customer base and even then, you can probably wait it out and take those customers if you're Novell or Redhat.

Re:Stock price... (2, Informative)

ZorbaTHut (126196) | more than 7 years ago | (#17812958)

Another issue is that, if IBM buys them, they probably end up having to deal with SCO's various madcap lawsuits. It's quite possible SCO is worth literally less than nothing right now, considering all the reverse lawsuits they're liable for.

Re:Stock price... (4, Informative)

KokorHekkus (986906) | more than 7 years ago | (#17813020)

Short answer: No

First: The board of SCOX has adopted a poison pill plan which pretty much allows them to set any price regardless of what the company is worth on the stockmarket, should anyone be as daft as want to buy it. If you buy a company you also buy their liabilities. (And remember that some 45% of the shares is still held by insiders in the company) Darl McBride said in 2004:

In an apparent response to industry rumors that SCO may become the target of a hostile takeover bid, SCO's Board of Directors has implemented a "shareholders rights plan" designed to deter unsolicited takeover attempts, McBride said. "We believe that this will basically keep any outside offers or potential takeovers that are not in the best interest of the shareholders at bay," he said. The plan, which was adopted by the board on Aug. 10, gives SCO's board the right to determine the "fair value" of the company in the event of a takeover attempt, McBride said.
And that fits pretty well with the suspicion that their original plan was to force a buyout from IBM (Source http://www.infoworld.com/article/04/08/31/HNscocap s_1.html [infoworld.com])

Second: as many others have pointed out - give in to extortion tacticts and they will just keep coming again and again and again.

Re:Stock price... (0)

Anonymous Coward | more than 7 years ago | (#17813364)

One cannot set the "fair price" of anything. Only the market can do that. The SCO board may think the company has a certain value. But if the market doesn't agree it's irrelevant.

Re:Stock price... (0)

Anonymous Coward | more than 7 years ago | (#17813128)

No. It's not that simple. If I understand it correctly, at the simplest level, the stock price is the lowest amount anyone will sell a share for. If you buy a share, then you've bought the cheapest one available. After you've bought all the shares anyone is willing to sell at that price, the price goes up, and you're buying from someone who is not willing to sell until you pay more. And of course, people get more attached to their shares if IBM seems to be buying every single one they can get hold of, so the act of buying shares increases the price. Result is that even if you have 49.99999999% of the company, there may be nobody willing to sell that share for any amount that you're willing to pay.

Re:Stock price... (1)

Fordiman (689627) | more than 7 years ago | (#17813678)

Thank you. That may be the simplest explanation of the mechanism behind supply and demand I've ever heard. (ie: as the supply is reduced, so is, statistically, the number of people that will sell at the low price).

Re:Stock price... (1)

UnknowingFool (672806) | more than 7 years ago | (#17813250)

No, IBM could have bought SCO long ago. Right now, it's about punishment. IBM recognizes this extortion scheme for what it is. If IBM paid up, many companies would try this stunt. IBM must make an example of SCO. It would serve as a warning: Do not mess with IBM. Do not mess with the Nazgul. They will crush you.

Re:Stock price... (1)

fermion (181285) | more than 7 years ago | (#17813398)

I am now of the belief that the best thing would be some VC to buy them out, and then sue management for something like gross incompetence, recover funds, and cut the golden parachute.

There might be enough funds in company and management assets to bring a significant profit.

IRC, the big problem with a buyout is the lack of readily available stock.

Re:Stock price... (1)

burnin1965 (535071) | more than 7 years ago | (#17814070)

Isn't SCOs stock price/equity low enough to where IBM could just buy them outright?
No. While the cost to simply purchase the company outright may seem cheap there are going to be some hidden expenses. tSCOG owes Novell more cash than they actually have on hand so whoever buys up tSCOG will also inherit that debt. And on top of that there is the Red Hat lawsuit resulting from the lies tSCOG representatives were spreading in the press when they started this fake crusade. And, who knows what kind of new lawsuits will pop up from investors who've been bilked out of millions and other companies who have been harassed by these clowns.

No, there is no reason to buy tSCOG, unless you enjoy pain, and I doubt IBM will be buying anytime soon.

Re:Stock price... (0)

Anonymous Coward | more than 7 years ago | (#17815240)

NO! Remember a couple of years ago, SCO went through the exersize of setting up contingencies for a hostile take over. Which isn't unheard of for a company, but IBM would not want to trigger any of the conditions that give Darl and Co. their golden parachutes. They are falling, so let them depend upon their OWN reserve chute.

Nothing New (2, Informative)

Anonymous Coward | more than 7 years ago | (#17812842)

ALL public companies say things like this in 10k filings. They ALWAYS state the possibility of failure. This is another "non-story".

Re:Nothing New (0)

Anonymous Coward | more than 7 years ago | (#17812928)

SCO has usually been positive, even in it's 10K.

Re:Nothing New (1)

UnknowingFool (672806) | more than 7 years ago | (#17813108)

Yeah, I think companies must present the worst case scenario for prospective investors. If you look at extremely profitable companies like MS and Apple and read about their potential liabilities in their 10K, you'd think they could go under.

Re:Nothing New (1)

Hemogoblin (982564) | more than 7 years ago | (#17813724)

I'm not an accountant, and I'm only taking my second accounting course.

Your statement is correct. If a company is involved in litigation where loss is likely they must report it in the annual report. If the chance of loss is indeterminate, they must also make a note. However, if they are certain that they will win, then you don't make a note at all. Clearly they aren't going to win, so they made a note in their report.

Now I haven't read the report, but I'm going to assume they didn't put a monetary value on the possible loss. This is probably a good assumption since it definately would have been mentioned*. This means that either SCO don't know what the loss would be, or they're not certain they will lose. Clearly they haven't given up yet.

*Unless no-one else read the report. This is Slashdot after all.

Re:Nothing New (0)

Anonymous Coward | more than 7 years ago | (#17814466)

Sheesh. Another one of those "This is not news" comment....
Who the hell has mod you up as "informative" ? I'd mod you down as "Annoying"

Speling errors too (0)

Anonymous Coward | more than 7 years ago | (#17812874)

OSes like HP-US and Solaris are derivatives of code that they 'own'.

That should probably be HP-UX, one of the best known Unix derivatives although pretty much dead these days. More information in wikipedia [wikipedia.org].

Even Miss Cleo saw this coming (2, Funny)

Merkwurdigeliebe (1046824) | more than 7 years ago | (#17812876)

SCO should have hired her. She could have told them their scam's chance was slim.

Re:Even Miss Cleo saw this coming (1)

Fordiman (689627) | more than 7 years ago | (#17813728)

Worse yet, she could have suggested a better scam. I hear she's pretty damned good at those.

SCO: The Unix what Knows Your Future!

Re:Even Miss Cleo saw this coming (0)

Anonymous Coward | more than 7 years ago | (#17813816)

"SCO should have hired her. She could have told them their scam's chance was slim."

It's been pretty fat and long-lived for the average lifespan of a scam.

Re:Even Miss Cleo saw this coming (1)

gbobeck (926553) | more than 7 years ago | (#17814492)

SCO should have hired her.
Why should they hire her? The could just call her and get a free reading instead. :-)

I thought that was standard for 10K... (4, Insightful)

Jeff DeMaagd (2015) | more than 7 years ago | (#17812922)

I thought 10K filings are supposed to have that type of information, on the forseeable risks. I don't care what sort of PR bravado a company has, a 10K filing is not the place to pretend you are guaranteed a win everything.

In short, nothing to see here, move along.

Re:I thought that was standard for 10K... (3, Insightful)

tverbeek (457094) | more than 7 years ago | (#17813244)

Mod parent up. These kinds of filings always contain statements of potential doom that you'll never find in any press release. If they're in a legal dispute, they have to say what the consequences will be if they lose... even if they sincerely and correctly expect to win. So it's not an admission that their case is weak, only of the fact that they are involved in litigation whose outcome is still pending.

They must maintain the fiction that they're right (1)

postbigbang (761081) | more than 7 years ago | (#17814438)

Down to the bitter end.

If they were to change their stance, or their doggedness, they'd be crushed in a heartbeat-- and end of story. Instead, what they don't reveal is that they launched a lot of litigation that was fruitless, because their basis of injury didn't exist, because their rights to Unix code were bogus. They exacerbated their problem by sending out their letters of injury to large corporations. Then they took money in license fees that would be owed to Novell, who in turn, immediately stanched their claims to IP/copyright ownership of SVR3/4 code. Then they made the mistake of trying to queer Linux IP by infering that IBM took code illegally through AIX development and put the code into Linux.

Of the aforementioned, there is no evidence, and what little they tried to publicly prove was laughed off, and apparently, rightly so. In the interim, they've tried to make continuing development efforts succeed with a brave face, and have tried to make mobility code development efforts pay off (they were at CES at Pepcom, I believe; Darl McBride in a table top kiosk, hawking mobile code).

SCOX is essentially worthless at this point. If they hadn't noted the travails in a 10K, then they could add shareholder litigation to their list of problems as well.

What would become of UnixWare and OpenServer? (1, Interesting)

Anonymous Coward | more than 7 years ago | (#17812980)

Were SCO to go under, what would become of UnixWare and OpenServer? I would imagine they'd be sold off to the highest bidder in some sort of liquidation proceedings. Hopefully a company like IBM or Sun would buy whatever rights SCO held, and then negotiate with Novell to release the source code to both products, ideally under a liberal open source license (BSD, MIT, zlib/libpng).

While UnixWare and OpenServer are of limited practical use these days, especially with Linux, *BSD and OpenSolaris, there would still be much historical value in their source code. I'm sure that there are a number of people still using older hardware that wouldn't mind using either system, since it actually runs quite well on such systems. There are even still some businesses who use UnixWare and OpenServer for aspects of their daily operation, who would also benefit from source access.

Re:What would become of UnixWare and OpenServer? (2, Interesting)

peragrin (659227) | more than 7 years ago | (#17813180)

Since 95% of the money MSFT and Sun paid SCO goes back to Novell and Since SCO itself list Unixware and Open Server at values of less than 5 million dollars. Novell will end up with both product lines.

Nope the only thing left will be the fraud trials for Ralph Yarro and Darl Mcbride. Since it is obvious to all that this has been a buyout scam from the beginning. Darl is on record as saying that unless they launched the lawsuits(and got financing from MSFT, Sun and Baystar) SCO would have been bankrupt by now.

Re:What would become of UnixWare and OpenServer? (1)

nuzak (959558) | more than 7 years ago | (#17815862)

> Since 95% of the money MSFT and Sun paid SCO goes back to Novell

Actually Novell claims that SCO has forfeited their 5% cut due to mismanaging it. They want the whole enchilada.

It's really interesting to see how the tactics of IBM's legal team (Swain, Cravath & Moore) and Novell's (Morrison & Foerster) differ. The former is satisfied with not asking for too many sanctions, and patiently lets the wheels of justice grind slowly and finely. The latter goes right for the jugular -- they're not called MoFo for nothing (in fact that's their domain -- www.mofo.com)

Re:What would become of UnixWare and OpenServer? (0)

Anonymous Coward | more than 7 years ago | (#17813628)

I'm sure that there are a number of people still using older hardware that wouldn't mind using either system, since it actually runs quite well on such systems.

If by "runs quite well," you mean "randomly corrupts binaries, panics when you look at it funny, craps all over filesystems during normal reboots, and generally sucks the sebum from around goatse guy's asshole," then yeah, it runs quite well.

I hope somebody buys OpenServer and sends all the current customers paper bags full of dog shit, with a label that says "ENJOY OUR LATEST RELEASE!!!1~" Maybe then my employer will finally consider migrating from that garbage.

How stupid are they, really? (1)

Generic Guy (678542) | more than 7 years ago | (#17813022)

and SCO is now claiming that OSes like HP-US and Solaris are derivatives of code that they 'own'.

Okay, if the entire point of this 10K filing is that your claims are in danger of being summarily thrown out of court why in the world would they then publically publish paperwork laying the same claims against two new large behomoth companies?

Oh wait... Pump 'N Dump. I remember, now.

Re:How stupid are they, really? (2, Interesting)

ebuck (585470) | more than 7 years ago | (#17813722)

Technically both HP-UX and Solaris are derivatives of code that SCO somewhat controls. The thing to remember is that they are LICENSED derivatives, which have paid thier royalties and have permission to call themselves UNIXes.

They're probably enhanced versions of System V, but they might have done even better than that. System V has been around the block a few times, and there's a lot of room for enhancement. That means that assuming SCO has some claim of ownership of the System V code, all other UNIXes are derivates. Unfortunately, all other UNIXes are licensed derivatives, and those agreements usually were written to be non-revokable.

Remember when SCO declared that they had revoked IBM's license for AIX? Well, IBM pulled the contract and it stated clearly "non-revokable". SCO is going to die, but it will continue to be a long slow death.

Re:How stupid are they, really? (2, Informative)

StormReaver (59959) | more than 7 years ago | (#17814402)

"Technically both HP-UX and Solaris are derivatives of code that SCO somewhat controls."

Both IBM and SUN bought out their royalty obligations years ago, and neither owes royalties to anyone. SCO has no control over either (even if we accept SCO's fantasy-land theory that it bought UNIX).

Re:How stupid are they, really? (1)

ebuck (585470) | more than 7 years ago | (#17818180)

Of course SCO doesn't have control over anyone, well maybe they have control over the workload of a few dozen lawyers, but that's about it.

Just because they state that other UNIXes are derivaties of System V doesn't mean that they are in a position to profit from it. Sure, the way they present it makes it look like they could profit, but that's just corporate spin to make the best out a bad situation.

SCO's just hoping that nobody notices that all of the UNIXes are permitted derivatives of System IV / V code. As long as they concentrate on the "derivative" part, and don't bring attention to the "permitted" part, they might be able to fool a few more people for a little longer.

The permission to make HP-UX and Solaris was final decades ago. All money that was ever going to change hands, changed hands back then. SCO's just trying to twist reality into looking like they might have another multi-million dollar jackpot lawsuit in the pipeline. Unfortunately, they'll have to disregard their own (assuming they have any connection to System V code) agreements to persue this fictional windfall.

Re:How stupid are they, really? (0)

Anonymous Coward | more than 7 years ago | (#17814944)

...and have permission to call themselves UNIXes.

UNIX is a registered trademark of The Open Group.

Re:How stupid are they, really? (0)

Anonymous Coward | more than 7 years ago | (#17815192)

in a 10K filing, a company must disclose any potential downside in their business, sort of a worst case scenario. Telling people they might not win is not impressive, but holding out this info this long to the point of near bankruptcy is. Laying the same claims against two new large behomoth companies is just a way to hold up the stock price, especially when they are this close to being delisted. Dishonest, sure. Bad for potential investors, of course. But what do you expect from Darl.

Hooray Pamela Jones (3, Insightful)

Darth Cider (320236) | more than 7 years ago | (#17813034)

SCO deserves all the bad press it can get on Slashdot, but Groklaw has led the way. What a fantastic job they've done over there! Kudos, you fine folks.

Re:Hooray Pamela Jones (-1)

Anonymous Coward | more than 7 years ago | (#17814240)

IBM would have lost this case without her, and she has done more to aid FLOSS than Linus.
  She will probably be made a saint.
Lets hope she can find a cure for cancer soon.

Re:Hooray Pamela Jones (4, Interesting)

gtall (79522) | more than 7 years ago | (#17815444)

In a way, the parent is accurate. When SCO launched this expedition, they also launched it in the media. The media at the time was clearly piqued by the ramifications were SCO to succeed. IBM clammed up because they had a court case to fight. However, SCO used all the media hype to attempt to shake down other companies. Were it not for Groklaw poking public holes in SCO's stories, several companies likely would have paid up. Eventually, the court cases would have been lost by SCO and the gravy train would dry up. However, the precedent would not be good.

The beneficiary of this, and mostly likely the PuppetMaster after the initial benefits were realized, was Uncle Fester and Cousin It (a.k.a. Bill). They (and Sun) managed to funnel a few cool mil to SCO just to keep the game going longer. Groklaw ferreted that connection out in such a way that Uncle Fester and Cousin It probably won't touch SCO now with a ten foot pole.

In addition, Groklaw did some good work in ferreting out the details of the APA agreement and its tortured history into SCO hands. One could argue that Groklaw did more in freeing Linux from the stigma of "stolen" than IBM ever could do.

And Groklaw isn't going away any time soon. Uncle Fester and Cousin It will have Groklaw teasing out their malpractice with a fine tooth comb for a long, long time.

Gerry

I don't get it (1)

markov_chain (202465) | more than 7 years ago | (#17813044)

Don't they have a board? Is it really possible that the board members are just as dumb as the CEO?

Re:I don't get it (1)

1mck (861167) | more than 7 years ago | (#17813210)

"Don't they have a board? Is it really possible that the board members are just as dumb as the CEO?" It has never been about proving if SCO owns the code or not, but that the board members, including Darl are making millions off of this. They even said in one of their e-mails that they were rich. They aren't stupid, and they don't care what they say or do as long as they ride this pony for as long as possible...remember, they make sure that they are paid first, and then the rest goes into the lawsuits. The one thing that they were hoping as a bonus is that if they threw enough crap at the courts, then they might just be able to blur their vision enough so that they could get a toe hold, and then run with it, but as we have seen that they have been unsuccessful at this. But, once again, it is about the top people getting rich off of this.

Darl's next employer... (4, Funny)

blcamp (211756) | more than 7 years ago | (#17813088)

...will have him wearing a blue apron with the white letters and yellow smiley-face. He'll look wistfully upon the computers in the center aisle that are pre-loaded with "his" operating system.

And he'll mutter to himself: "ahh, what might have been"...

Re:Darl's next employer... (1, Funny)

Anonymous Coward | more than 7 years ago | (#17813400)

Really? I thought that the collective sentiment here wanted that next "employer" to have him wearing an orange boiler suit, looking wistfully for a tube K-Y jelly.

IANAL, but surely.... (1)

jimicus (737525) | more than 7 years ago | (#17813114)

If SCO have developed the opinion that "OSes like HP-US (sic) and Solaris are derivatives of code that they 'own'", then wasn't there something in US law (laches?) that they're obliged to make efforts to remedy the situation as soon as possible, rather than just sit around?

Re:IANAL, but surely.... (1)

Secrity (742221) | more than 7 years ago | (#17815004)

"If SCO have developed the opinion that "OSes like HP-US (sic) and Solaris are derivatives of code that they 'own'"

SCO IS right about HP-UX and Solaris containing derivatives of the code that they claim to own; and HP and Sun pay license fees to SCO to use that code. Almost all of the license fees that SCO collects are supposed to be turned over to Novell, which is the real owner of the code formerly known as UNIX.

When the lawsuit first started... (1)

DoofusOfDeath (636671) | more than 7 years ago | (#17813122)

It was posted somewhere that the lawsuit could potentially run through 2005, and I thought, "Holy crap, that's slow justice."

Re:When the lawsuit first started... (1)

chrwei (771689) | more than 7 years ago | (#17813994)

IP infringment is not a criminal offence, so there is no right to a speedy trial here. Speedy Trial Act [usdoj.gov] only applies to criminal trials.

this case is the equivelent of SCO telling the playground monitor that IBM stole their hacky sack and IBM saying it wasn't SCO's but Novells and they have the right to use it. Even if SCO were to win, IBM did not commit a "crime".

They already have won (0)

Anonymous Coward | more than 7 years ago | (#17813126)


the executives that is, making out like bandits while they can, more cash than you will see in your lifetime, read their compensation packages on Yahoo Finance then see who is losing, it certainly ain't the execs! the shareholders however....

This is just SCO meeting SEC reqirements (1)

viking80 (697716) | more than 7 years ago | (#17813226)

This is just SCO meeting SEC requirement of disclosure to stockholders. They have to disclose all things that may seriously affect the company performance.

Re:This is just SCO meeting SEC reqirements (0)

Anonymous Coward | more than 7 years ago | (#17814256)

They have to disclose all things that may seriously affect the company performance.

So does "Darl McBride works here" count?

From 09 June *2003* (2, Informative)

NZheretic (23872) | more than 7 years ago | (#17813316)

Read this posting from back in 09 June 2003 What evidence of origin,ownership,copyright + GPL [slashdot.org] - Caldera/The SCO Group were F**ked from the beginning.

In other words ( from Wednesday, March 10, 2004 A plea for relief from Microsoft's escalating anti-competitive tactics. [blogspot.com] ):

The SCO Group has entered into a series of essentially inherently flawed lawsuits and fraudulent license claims against users of the Linux operating system. Since 1994, Caldera International and the Santa Cruz Operation have been accepting, profiting from and distributing software developed by hundreds of independent developers under the terms of the GPL and LGPL license. The SCO Group has failed to put forward any sustainable legal theory why it should not abide by the terms of the GPL license. Detailed investigation into other facts and evidence which regularly conflict with the SCO Group's various legal claims, filing, press and public statements, raises serous questions which can no longer be explained away by a lack of competence in either the SCO Group's CEOs or the SCO Group's legal representation.

Let's hope they last long enough... (1)

Elendil (11919) | more than 7 years ago | (#17813368)

I for one sincerely hope that SCO won't have the excuse of going bankrupt before the trial actually starts. I seriously want to see IBM's lawyers destroy them in front of a jury! It would really be a pity if Darl & Co. could go on whining about how they would have won if they hadn't had to quit for financial reasons.

Re:Let's hope they last long enough... (2, Interesting)

rkhalloran (136467) | more than 7 years ago | (#17814194)

I agree I'd prefer they not go bankrupt too soon, but I expect that IBM's motions for summary judgment, Novell's claims the copyrights never went to SCOX, Red Hat's Lanham Act claims (false advertising that Linux infringed UNIX) will torpedo them well before anything gets to a jury.

THEN they can go bankrupt, and we can all watch the principal parties doin' the perp walk.

SCOX DELENDA EST!!

I calculated it (0)

Anonymous Coward | more than 7 years ago | (#17817884)

They can last some 8-9 years, at least.

How come? Well, some of the "experts" forget that when the situation gets worse by time SCO *will* be still able to cut down the costs of their operations. Just fire some people, sell IP and keep shrinking in a controlled way. It will not be a real functioning company (it isn't anymore anyways considering their income from the consulting services - those numbers mean there are no NEW customers.. Some are still relying on them because they haven't yet got rid ofthe legacy servers.) but it can keep the lawsuit going on.

They are there to see the show until the bitter end, no matter how long it takes.

they should file a deep-6, not a 10-K, report (1)

swschrad (312009) | more than 7 years ago | (#17813370)

because SCO is goin' DOWN. the company is a shell game played with pyramid schemes. totall bogus.

Dormant Legal Rights? (1)

Speed Racer Sr. (1057568) | more than 7 years ago | (#17813504)

Does SCO have dormant legal rights on this lawsuit? If I am on the jury on this I will vote for SCO. "Twin Turbine Race Car Driver of the Year "TM" "

Reminds me of the Jaguar (1)

PoprocksCk (756380) | more than 7 years ago | (#17813704)

Reminds me of the time that the CEO of Atari said "The Playstation is a little bit more powerful than the Jaguar. ... a little, little bit." First rule of business: never show weakness!

Teh horror! (1)

Opportunist (166417) | more than 7 years ago | (#17813810)

I mean, what's next? MS announcing that Vista might not be doing what its owner wants? Bush telling us he thinks that US might not get the upper hand against the terrorists in Iraq? Me admitting my comments are neither funny nor witty?

What will this world come to if people get rid of their delusions and start living in reality? What will happen to second life? What to Hollywood? And does anyone here think of the lawyers?

C'mon, it ain't fair. I want my SCO back the way they were. It was the best meme since all your base got old.

Ahwell, we still have Duke Nukem Forever. Don't you dare telling me they finish it now, too!

World Owner (1)

deKernel (65640) | more than 7 years ago | (#17814086)

Next thing you know, SCO will be claiming that the idea of an OS is theirs and all should license it from them! Sheesh. When will they just stop whining and focusing on their business.

Scox has already won (5, Interesting)

walterbyrd (182728) | more than 7 years ago | (#17814118)

When Darl was hired as CEO, just before the scam began, about four years ago. Scox's market cap dropped below $6M. Scox was on the brink of delisting and bankruptcy. Now scox's market cap is over $20M.

Kevin McBrid pulled in $885K in the last two years. Darl probably made about $2M since the scam began. Not bad for small time scammers. Scox's law firm, BSF, has made over $30M. And the company that financed the entire scam, MSFT, is getting five years of top quality FUD for a meager $50M.

Scox never expected a victory in court, scox expected either a quick settlement, or scox would just loot as much msft FUD money as possible.

Scox was just given more delay - yet another scox victory.

Not so much (0)

Anonymous Coward | more than 7 years ago | (#17814368)

SCO is heading toward bankruptcy. The trustee can examine all the payments made by SCO and can recover money if it appears that some creditors were favored over others. SCO has been spending Novell's money. If the judge says the money existed as a constructive trust, the trustee or the judge could order that all that money be recovered. (the money isn't a debt owed to Novell, it is money owned by Novell and held in trust by SCO; that makes a big difference) So, McBride, Yarro et al may have to give back all their ill-gotten gains.

Even the lawyers aren't immune from losing a bunch. If the judge finds that the case was frivolous from the beginning, the lawyers can be severely sanctioned.

The generated FUD has helped Microsoft and so they win. The SCO gang on the other hand; we'll see ...

Yes, so much, scox was going bankrupt anyway (1)

walterbyrd (182728) | more than 7 years ago | (#17814976)

>SCO is heading toward bankruptcy

So what? Scox was heading towards bankruptcy anyway. Scox would have been bankrupt 2 - 3 years ago if not for this scam. Scox never made a profit in it's entire history - except for the quarter that scox got the msft FUD money.

The scox scammers don't give a damn about the future of scox. These guys are nothing but small-time Lindon scam artists. The scox scammers are just out to loot what they can. The only difference between this, and the typical Utah MLM scam is that this scam has msft behind it.

I'm sorry, but those who say "on man! scox really screwed up!" just don't get it.

With all due respect walterbyrd ... (0)

Anonymous Coward | more than 7 years ago | (#17816622)

Did you read the post you are replying to or the one to which it is a reply.

The basic point was that Darl and co. made a bucket of bucks and will, or will not, be able to keep it in the face of SCO's impending bankruptcy. Both of us agree that they are a bunch of scam artists and neither of us said anything like: "on man! scox really screwed up!"

Mod Parent Up insightful (1)

retrosteve (77918) | more than 7 years ago | (#17815096)

This guy has actually understood what's going on. Cynical and sad, but I believe obvious too.

It depends on where you think the finish line is. (1)

snakecoder (235259) | more than 7 years ago | (#17815528)


1) Yes, Darl and his brother probably pulled $3+ million from this scam, and a few other insiders sold their stock and walked with some cash early on, but Darl will never be CEO of another IT company again. He is a suicide pill for anybody who would even consider hiring him in the IT field. He can no longer attract investor money and he is an outcast. That three million will have to last him quite some time. Here is to hoping his lifestyle is used to higher income. Say mortgage, car payments, alimony.

2) Yes, MS, did win the FUD campaign, but I'll argue that the FUD campaign only lasted a year and a half MAX. Now the suit is having the opposite affect. People feel linux has been vetted, so MS has to change the precious IP story to patents since the whole copyright thing did not work out. Patents are a much harder game for MS. They might claim that linux steps on many patents, but they themselves step on as many patents if not more. They run a risk of starting a war where the person with the most money loses. I think MS has the most money.

I think the net result of this smear campaign has been great publicity for IBM in the geek world (not sure what that is worth). And overall confidence that linux is safe, being backed by companies like RH and Oracle. Finally, MS, comes off looking bad. Vista has been delayed, DRM is a complete cluserf*#k and it does not help when it seems like MS was part of a massive, possibly illegal smear campaign that failed. How much confidence does that give you in Vista?

so maybe... (1)

JustNiz (692889) | more than 7 years ago | (#17814124)

As SCO is penniless maybe they should tell McBride to give back some of the 1/4 million dollar bonusses he keeps taking.

http://www.groklaw.net/articlebasic.php?story=2005 053100093171 [groklaw.net]
http://www.groklaw.net/articlebasic.php?story=2006 1118000708715 [groklaw.net]

Career Opportunity (0, Troll)

Sgt. Joe (313778) | more than 7 years ago | (#17816990)

Hmmmm...same strategy as Iraq. Looks like Bush's first board seat in Feb 09 could be at SCO.
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