SCO Goes Private With $100 Million Backing 411
AmIAnAi writes "Just when you thought it was all over, the SCO story takes a new twist. SCO has received $100 million financing from Stephen Norris Capital Partners to get them out of Chapter 11 and go private 'The move gives Stephen Norris, whose namesake founder was a co-founder of private equity giant The Carlyle Group, a controlling interest in SCO, which now has a platform to continue its court battle with Novell Inc. over royalties from the Unix server operating system, SCO's main business ... According to a statement from the company, SNCP already has a business plan for SCO that includes pursuing its legal claims.'"
Look for more Microsoft money behind (Score:5, Insightful)
Brilliant! (Score:5, Insightful)
Legal Claims (Score:2, Insightful)
My understanding was that the company imploded because it was ruled that they did not own the Unix copyright, upon which the majority of its legal claims were based. What legal claims could they possibly have left?
Also, buying a company for the sake of being able to earn legal awards should be illegal, strictly as a matter of financial sanitation. A good solution to this would be a statute that makes a buyer liable for claims up to the amount he paid for the company, but make both him and the company unable to claim any rewards in suits pending on the company's behalf.
It gets better (Score:3, Insightful)
Re:Calm down, everyone (Score:5, Insightful)
Re:Look for more Microsoft money behind (Score:2, Insightful)
The lawyers, always looking to have full time guaranteed employment, instead of working on contract or speculation...
Anyone who wants those lawyers busy on THOSE suits, and not THESE suits...
And, of course, the more usual suspects and
Re:Look for more Microsoft money behind (Score:5, Insightful)
I am worried (Score:4, Insightful)
Stupidity cannot adequately explain this move, which leaves...
Re:Look for more Microsoft money behind (Score:3, Insightful)
So, you're saying Michael Moore is not a trustworthy source?
Who'da thunk it!
THe ??? bit (Score:5, Insightful)
Re:Brilliant! (Score:3, Insightful)
One clarification (Score:5, Insightful)
Right now they can't buy paperclips without Judge Gross's permission (ok, I'm exaggerating, but only a little).
The US Trustee, Novell and IBM are all going to over the plan with a fine-tooth comb and the judge isn't going to approve it just on SCO's say-so. This could be like the York deal that SCO tried to push though last year, all smoke and mirrors.
So don't go getting your shorts in a bunch just yet.
Re:Brilliant! (Score:3, Insightful)
Re:Calm down, everyone (Score:2, Insightful)
White men, models of conservative grooming and sartorial conventionality, sit around smoking crack and wearing propeller hats, while trying to concoct surrealistic investment strategies that will attract additional investors for their partnership. Or, perhaps they are holding patents for a way to convert millions in wasted litigation and the accompanying legal briefs into Green Energy.
http://www.snpartners.com/ [snpartners.com]
Gosh, is anybody else ready for this to just stop? Did somebody play a mean trick and make the dead horse twitch so somebody would want to beat it some more? SCO=Silly Corporate Overindulgence? Shortage of Clues Obvious? Serious Conspiracy Overload?
No Patents (Score:4, Insightful)
Capital expects returns. (Score:3, Insightful)
This is not capitalism at work, it's predatory behavior and something anti-trust lawyers should sink their teeth into. There is no reasonable expectation of return on SCO's "business" because SCO is full of shit and every decision has been against them. This is just another $100 million that M$ does not mind pissing away. The "investment" harms the reputation of all involved.
Perhaps there is some insider knowledge here. (Score:5, Insightful)
The Statements in the release are quite lawyerly indeed. The funding is in place, IN PART, to "see SCO's legal claims through to their full conclusion". PJ interprets this to mean "continue to attack Linux", and indeed the deal suggests that is something these investors would like to see returns from: the vast majority of this $100M is not hard cash to be handed over in one lump sum loan, it is a "line of credit" to fund continued operations and part of financing this line of credit would be, IIRC, 17% of any monetary judgments in SCO's favour.
However, I cannot believe that the smart people behind SNCP sincerely think they have a good chance of actually WINNING the lawsuit. I think it's more of a "lottery ticket"--lawyers make sure their butts are covered, and that they'll be able to screw ove...errr I mean "receive compensation" under all circumstances. "Continue to pursue" litigation "to their full conclusion" could very well be code words for "finally put it to rest". They apparently have a plan that includes the legal stuff but haven't released details (and taking SCO private would mean they don't ever have to do so). That plan very likely incorporates (or entirely consists of) a contingency plan. It looks pretty bleak to reverse the decision on copyright ownership, but they can appeal a judgment on royalties owed to Novell and get out of paying tens of millions. The same goes for any counter-suits from the likes of IBM or Red Hat. SNCP may think they have the ability to get SCO out of hot water without paying out as much (or any) money.
In short, their legal strategy might (wisely) be a defensive strategy to cut their losses and move on. To paraphrase that cute song "if I had a (hundred) million dollars", well, I'd "buy me a SCO" too actually, and that would almost be my legal plan, though I'd be more apt to not put too much effort in "cut the losses" and settle out of court. If I was some LBO billionaire dude I'd buy SCO, and when judgment came I'd say "here's your money Novell", and subsequently settle all other disputes quickly. Then I'd promptly GPL UNIXWare and OpenServer and use what's left of the technical people to refocus SCO as a "solutions provider" to target the thousands of SCO users around the world with UNIXWare/OpenServer-to-Linux migration plans. Anything of redeeming value in the newly-GPLed legacy OS products would then be incorporated into a "LinuxWare" distribution tailored to be as close as possible to a drop-in replacement for existing SCO customers.
The background of SNCP and their "middle eastern partners" really make me uncomfortable though. Those stated partners include the Saudi prince who is Bill Gates' investment partner in the Four Seasons hotel chain. These are legally-savvy business tycoons. I cannot see them taking the "Mark Shuttleworth act of benevolency" approach that I'd take. They are no doubt acting with convincing insider knowledge. I think that there might be a few motivators for this investment:
* They might have a convincing legal argument to overturn some of the judgements against them--for example they might be able to retain copyright to at least portions of UNIX, and that would at least allow the IBM lawsuit to move forward and keep the FUD coming for Microsoft.
* They are trying to stem customer migrations to Linux. I have no doubt that even if Microsoft isn't tied to this deal that BillG *is* in some capacity, and he obviously has the betterment of Microsoft in his self interest. The business plan outside the legal battle may be in fact to steer SCO customers towards Microsoft solutions, and perhaps to eventually have MSFT absorb SCO entirely. If you combine that with the first point, that would mean MSFT could end up with some UNIX copyright ownership--a great piece of IP to leverage if you wished to embrace, extend and extinguish *real* UNIX operating systems of all kinds (like
Re:Look for more Microsoft money behind (Score:5, Insightful)
~ http://img88.imageshack.us/my.php?image=lolmcbridelj8.jpg [imageshack.us]
Depends on how much you mean by much... (Score:3, Insightful)
From wikipedia [wikipedia.org]:
It is popularly suggested that cockroaches will "inherit the earth" if humanity destroys itself in a nuclear war. Cockroaches do indeed have a much higher radiation resistance than vertebrates, with the lethal dose perhaps 6 to 15 times that for humans. However, they are not exceptionally radiation-resistant compared to other insects, such as the fruit fly. The MythBusters of Discovery Channel had tested this popular belief in an episode aired on January 30, 2008, and had confirmed that fruit flies do indeed have a higher resistance to radiation than cockroaches.
The cockroach's ability to withstand radiation better than human beings can be explained in terms of the cell cycle. Cells are more vulnerable to effects of radiation when they are dividing. A cockroach's cells divide only once when in its molting cycle, which at most happens weekly in a juvenile roach. The cells of the cockroach take roughly 48 hours to complete a molting cycle, which would give time enough for radiation to affect it but not all cockroaches would be molting at the same time. This would mean some would be unaffected by the initial radiation and thus survive, at least until the fallout arrived.
Re:Capital expects returns. (Score:5, Insightful)
Then it *is* capitalism at work by its very definition. Why do you think you need anti-trust laws but because growing monopolies is a known ill-effect of capitalism in action?
I don't think I need to say anything about the relationship between predatory behaviour and capitalism, do I?
Re:Capital expects returns. (Score:5, Insightful)
How many companies exist that would invest in a company that has no actual customers, already in chapter 11, and stuck in drawn-out legal proceedings that it almost certainly won't win? Microsoft has already undeniably helped SCO before [news.com], and they do have enough money to throw around that $100 million isn't too much to spend on a longshot.
So even if there's not direct evidence, there's also a very short list of people with $100 million sitting around who would want to invest in SCO. If it's not Microsoft, then I'd like to know who, because I've got a Perpetual Motion Machine for them to invest in next.
Re:Capital expects returns. (Score:3, Insightful)
Stop bringing up "pure free markets" in discussions about capitalism, really. Pure free markets have properties that will never exist in reality, such as equally complete and correct information for all players.
Re:Yikes (Score:3, Insightful)
They started talking about how IBM and Novel stole a whole bunch of their Intellectual Property and put it into Linux, and how Linux is nothing but a bunch a thieves.
Unbridled arrogance combined with a complete disconnection from reality? There is only one explanation -- SCO has been taken over by Scientology.
Re:Capital expects returns. (Score:3, Insightful)
Re:Capital expects returns. (Score:3, Insightful)
Big company A and Big company B have some strong competition from medium companies C, D, E and F. Big companies A and B are likely to join forces, either by a merger or by back-room nudge-wink deals to "compete" against C, D, E and F until they can bring them down. Once that happens, A and B can either merge to form a "mother" company like the old AT&T or "compete".
The goal of all public companies is to maximize profits, everything else be damned.
I think it all actually follows the theory's of how a solar system is formed. Many small bodies, begin to merge to form larger and larger bodies. You eventually end up with a few large dominating bodies. Yup, that has been Capitalism as we have seen it since the beginning.
Once a company becomes one of the large dominating body's, then they have total control of a market and there is no longer any such thing as a "free market".
It is really simple actually. Say I start selling corn as a corn farmer and have 100 other farms I compete with. I do some good business deals and I am able to buy up other farmers crops/land. I get bigger. Nothing wrong with that in a free market. However, they bigger I get, the more power I have and the easier it is to buy more land/power. Soon, I am the only player as a corn farmer. What happened to the "free market"? It is not gone? Consumers no longer have the power to "vote" with their money to influence the market. I and I alone hold it all. I can raise the price of my corn, I can lower the quality to "cut costs", I can lay off workers and give my executives bonuses at the same time, etc, etc.
The same thing goes for investing. Try to be an "average Joe" and get rich with $5,000USD to invest. Now say you have $1,000,00USD to invest. Wow, what a difference. You can turn that $1,000,000 into big bucks fast. Good luck with only $5,000. What is that saying about the golden rule? He who has the gold makes the rules? Or something?
A completely "free-market" capitalist system will never work, just like a complete system based on communism or socialism will never work. To me the best system seems to be... a balanced system! Not too left, not too right, etc, etc. Regulations against any company owning too much of a sector is a good thing IMO. Regulations bought by companies with tons of cash like MS, IBM, Walmart, etc is a bad thing. Companies should NOT be allowed to have any say in the political process of any country. The individual employees of the company can, as individuals, but that is it. Oh, I don't think any politician should be allowed "campaign contributions" as well. They are called bribes in my book. The "representatives" already make a very good salary, something like 5X the average American. Not to mention, health care for life, if they retire, raises for life. Sounds pretty freaking sweet to me.
However, we won't see this in the USA as long as companies are able to bribe our "representatives" with millions USD per year.