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SCO gets it Day in Court

Years into its legal wars against Linux, SCO gets another chance to go to court on April 28th. However, the case at hand, one last attempt to show that it, and not Novell, owns Unix’s copyright isn’t the case, SCO wanted. Instead of threatening the legality of Linux, this four-day trial will only determine whether the hot water SCO is in is boiling or scalding.

Instead of trying to prove that IBM placed Unix code into Linux, SCO has now been reduced to thrashing like a snake with a broken back to show that it has any claim what-so-ever to Unix. In addition, since that Court decision in August 2007, SCO filed for Chapter 11 bankruptcy in mid-September 2007.

Since then things have gone from bad to worse. First, SCO claimed to have found a buyer, York Capital Management. That deal came to nothing, and by the end of the year, SCO had dropped off the Nasdaq.

Somehow, SCO found yet another would be buyer: Stephen Norris & Co. This firm offered SCO $5 million in cash, and loans of up to $95 million for the company to continue its law-suits. Not bad for a company that main business, Unix on x86, had been declining for over a decade, and its legal wars against Linux and Linux-related companies like IBM, Novell and Red Hat, had resulted in nothing but one costly legal defeat after another.

This deal has also run into trouble. While SCO’s ownership had agreed to both to sell the company lock, stock and barrel, and fire long-time CEO Darl McBride, the would-be buyer decided that it wanted a new deal.

This news came out in the Bankruptcy Court on April 2, according to a report by Steven Church of Bloomberg News, SCO attorney Arthur Spector is reported to have said that the Stephen Norris deal was off. “We don’t have a new deal. But, when we get the deal that we think we are going to get, it’s going to be better.”

Stephen Norris & Co., a multiple-billion dollar private equity firm, decided that it wanted to buy not the company, but the company’s business assets. It’s this aspect of the latest proposed buyout that adds extra interest to the forthcoming SCO/Novell court case.

If SCO loses, and since the Lindon, Utah-based corporation faces the same judge that has already ruled that SCO has no right to Unix’s IP (intellectual property), that seems likely, not only will it have no claim to the Unix IP asset, it faces the prospect of owing Novell as much as $37-million for unpaid Unix licensing fees. Groklaw estimated in December 2007 that SCO had no more than $13 million left in current assets. Since then, SCO has continued to bleed red-ink like a stuck pig bleeds blood.

Will this court hearing spell the end of the SCO saga? It seems doubtful since the company has shown remarkable lasting power. Still, if SCO loses yet again, there will be even less reason for any would-be buyer to come in and buy the company or its ever dwindling assets.

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