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SCO Files For Bankruptcy Protection

from the we-will-prevail,-huh? dept

Fri, Sep 14th 2007 4:16pm — Mike Masnick

From the beginning of SCO's rather odd strategy of claiming ownership of the intellectual property found in Linux, the company has (often pompously) declared that in the end it will be vindicated and that there was no way anyone could conclude that it wasn't the rightful owner. What was amazing was how the company continued to state the same thing in the face of increasing evidence that the claims could not be supported. Then, last month, a judge ruled that SCO didn't even own some of the copyrights it claimed to. Instead, those were possessed by Novell. Monday the two firms were supposed to be in court to figure out how much SCO now owed Novell, but that's going to take a back seat to the news that SCO has filed for Chapter 11 bankruptcy. The announcement uses the typical "hoping to reorganize" type language, but it seems pretty clear the company (which was already looking somewhat shaky in terms of its financials) would rather not have to pay Novell... or deal with the fact that it may owe quite a bit in the other lawsuits its involved in, which are likely to fall apart without these particular copyrights. It's a nice strategy, really. Claim ownership and sue lots of big companies. Hype up how sure you are that you're going to win. Watch your stock price rise... so you can sell shares and make some money. Then, as the whole house of cards collapses, just declare bankruptcy.

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Filed Under: bankruptcy, lawsuits
Companies: ibm, novell, sco

13 Comments

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Leo, 14 Sep 2007 @ 4:33pm

It was meant to happen...
Seriously, it was 'cause "knowledge belongs to the world." Linux belongs to all of us, geeky nation. It is sad, though, that those in charge of SCO made some $$ by tricking the not-so-bright, I-didn't-see-it-coming type of individuals. SCO was always a big joke!
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Stuart, 14 Sep 2007 @ 4:44pm

Im glad
Bye Bye SCO. I love it. As for those individuals who bought SCO stock. They took their chance and did no research so screw em. In the end SCO will die. I will live and we all had a blast talking and reading about it for years.
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Somewhat Crazy Orangutans, 14 Sep 2007 @ 5:39pm

Couldn't have happened to a nicer company...
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Anonymous Coward, 14 Sep 2007 @ 7:24pm

Just Desserts
Those who invested in SCO richly deserve what they're going to get.
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- thecaptain, 17 Sep 2007 @ 9:50am
  
  Re: Just Desserts
  Those who invested in SCO richly deserve what they're going to get.
  
  No, unfortunately, most of them won't. A lot of investors got rich off of the SCO saga. The laws being what they are, SCO execs and their handlers will never see the inside of a court (or jail cell) for their part.
  
  The rest are just laughing all the way to the bank...
  
  Its a victory, and I'm very happy to see SCO go down...but its a hollow victory because the actual PEOPLE who made this farce happen will get away with it.
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R3d Jack, 15 Sep 2007 @ 8:14am

Good riddance
In a corner of the world dominated by a monopolist, the last thing anyone, anywhere, needed was a company stiffling the one real competitor. As for any investor in SCOG, they should have to pay their original investment as damages to the people and companies building and deploying Linux.
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Danny, 15 Sep 2007 @ 11:30am

But...

It's a nice strategy, really. Claim ownership and sue lots of big companies. Hype up how sure you are that you're going to win. Watch your stock price rise... so you can sell shares and make some money. Then, as the whole house of cards collapses, just declare bankruptcy.

Isn't that illegal? Artificially raising your stock value to sell it off quickly is like pumping and dumping stock right?
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- PaulT (profile), 15 Sep 2007 @ 12:25pm
  
  Re: But...
  It certainly is, and we can only hope for a nice, vicious audit of McBride and chums after this is all over.
  
  Now, if only we can get Microsoft to play nice and tell us exactly which patents Linux supposedly infringes... or is that, like the "Millions of lines" of code SCO had found, pure hyperbole.
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Derek Kerton (profile), 16 Sep 2007 @ 10:21am

All Upside
More on "nice strategy": don't forget that it's all upside. If, by some fluke, you DO win in court, you get a huge payout. If you lose in court, you go Ch. 11.

It's a gamble with no downside. It's gambling with OPM. It's rotten.
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jb, 16 Sep 2007 @ 12:32pm

The RIAA will be next...
in line for Ch 11 when people grow some balls and stand up to their ridiculous lawsuits. The only way for the RIAA to get real incriminating evidence on ANYBODY is to break the law by breaking into said offenders computer. Their lawsuit spree will come to an abrupt halt one day when some smart judge realizes this point, and starts making the RIAA pay for court costs and maybe damages. One can only hope it is sooner than later.
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Lewis Salem, 17 Sep 2007 @ 6:50am

!
Lets have a party and piss on the ashes.
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Steven Bliss, 12 Mar 2008 @ 4:34am

Where is M$ in all this?
Maybe if we had a more honest president than f...ing Bushhead that goes around helping M$ in the face of breaking the law, then M$ would be investigated for the evil that it may have played in this.
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