SCO to hold auction as part of bankruptcy plan
January 9, 2009 —
(Page 1 of 2)
The SCO Group filed its second Chapter 11 reorganization plan with United States Bankruptcy Court, calling for the divestiture of its OpenServer Unix product line and its mobile business division.
The plan, filed yesterday, calls for a public auction of those assets, leaving the UnixWare business remaining with SCO. In a letter to customers and shareholders, Darl McBride, SCO’s CEO, claimed that several investment groups have shown interest in acquiring SCO assets.
One of the goals of the auction is to separate SCO’s intellectual property litigation from its product business. UnixWare is the operating system that SCO acquired from Novell in 1995; it is not part of the auction because it is tied up in SCO’s court cases. The reorganization plan is expected to be approved or denied by a bankruptcy court in the next few months.
Jeff Hunsaker, president and COO of SCO, said the objective is to sell OpenServer and the mobile business unit, and to use the proceeds to exit bankruptcy. The SCO Group itself would continue on with its pending litigation against IBM, Novell and others, while some company employees, including the engineering and sales teams, would merge into the entity that acquires the properties, Hunsaker said.
“If [the auction] did transpire, and those assets were sold, then what remains with the SCO Group as a publicly traded company would be the litigation and rights of the UnixWare business,” Hunsaker said. “The majority of employees and customers, assuming the assets are purchased, would then capitalize and invest in the new business.”
Analyst Rob Enderle that in a recessionary market, organizations that even have interest in SCO’s assets will have a tough time coming up with the money.
“A lot of companies are trying to figure out how to keep their doors open, so money to do purchases is going to be incredibly hard to come by,” he said. “They couldn’t have picked an uglier time, and I’m not convinced it will work. They might find buyers, they’re just not going to get much money for it.”
Related Search Term(s): finances, Novell, SCO
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