SCO to file bankruptcy plan tomorrow

Jeff Feinman
December 30, 2008 —  (Page 1 of 2)
After a great deal of courtroom drama and mounting legal fees, the SCO Group is expected to file its Chapter 11 bankruptcy plan in court tomorrow. Jeff Hunsaker, SCO’s president, wouldn’t provide exact details of the plan, but he said the reorganization will hopefully help the company come out of Chapter 11 bankruptcy, which the company filed for in September 2007.

Utah-based SCO has been up to its ears in legal battles over the years, a notable one being a suit against Novell over who was the true owner of Unix. In August 2007, a U.S. District Court Judge ruled that Novell had retained the copyright to Unix after a 1995 agreement with SCO, declaring Novell the owner of Unix.

Jeff Hunsaker
Jeff Hunsaker

In November 2008, a federal court judge issued a final judgment in the case, reiterating much of the original order. As part of the order, Novell was granted an award of US$2.5 million, which was increased by $918,122, plus $489 per day after Aug. 29, 2008.

One analyst said SCO is on life support as they may struggle to come up with enough money to pay such a debt.

“We’re running into a year where getting financing or investors is going to be pretty tough, even for companies in pretty good shape,” said analyst Rob Enderle. “Getting SCO out of bankruptcy is going to be difficult.”

Enderle added that once Novell was declared the owner of Unix, the foundation of SCO’s legal actions against other companies was taken away. Unless the company is able successfully appeal the decision, which is a long shot after November's court decision, SCO may have trouble surviving after paying off its debt to Novell.

Hunsaker declined to discuss the size of the award that SCO owes Novell, but he noted that SCO is up to date in fees owed to lawyers. In addition to Novell, SCO also had lawsuits against AutoZone, IBM and Red Hat. Those lawsuits have been stayed until SCO emerges from bankruptcy.

Related Search Term(s): finances, mobile development, Unix, Novell, SCO

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