Investment Firm Bids to Buy SCOs UNIX Operations

WebCowboy writes "It appears that there are still enough people out there deluded enough to see value in SCOs UNIX operations. York Capital Management has put in a $36 million bid for SCOs UNIX operations. The offer includes coverage of up to $10 million for payment of legal fees and York Capital would assume ownership of the disputed UNIX IP as well as what is left of the lawsuits. Interestingly, SCO has offered this up for competitive bid (who would want to though?). Upon completion of the transaction, should bankruptcy court approve, SCOX would become solely a mobile applications provider (which is the only part of SCOs offerings that have undergone any meaningful development for quite some time)."

Does this not screw Novell?

[WindBourne]

As it is, SCO owes Novell loads of money. Can Novell stop this sale and/or get the money?

Re:

[Rogerborg]

Tune in next week to find out!

Seriously, if this were fiction, it would be a breakout show. I was thinking maybe Heather Graham as PJ, and (bear with me) Casper Van Dien as Darl. I think he's got serious slimy bad guy potential.

Re:

[lenski]

Seriously, if this were fiction, it would be a breakout show.

If someone submitted this story to an editor, it would be summarily rejected as implausible. Much like many other stories in our society... The truth is stranger than fiction. Casper van Dien? Very creative casting choice! :-)

Re:Does this not screw Novell?

[mce]

Actually, at least based on the limited info I have seen, from a purely financial point of view Novell should be happy. SCO does not have the money that it owes Novell, but YCM does. So, actually, I wouldn't be surprised to find out later that Novell helped to set it all up.

Please note that the deal will cost YCM more than $36m, so their valuation of the thing they'd be acquiring must be considerably higher as well.

• If they behave sensibly, they will stop the lawsuits and pay Novell (that is: on top of the $36m). Next they will need to spend some money to clean up the mess and carve up the pieces. Only after that has been resolved, can they think of selling the viable bits and making a profit.

• If they do not behave sensibly, they will continue the lawsuits and loose more money in the process (e.g. on legal fees). Even if they think they still have a chance of winning something along the way, they sure know very well that odds are against them and they will have taken that into account during their risk calculations while valueing SCO.

Companies such as YCM do not step into a very risky deal like this one without a clear view on a sizeable return on investment that would compensate for all the risk. I have a feeling that a few years from now the YCM-SCO example might become standard case study in business schools.

100% incorrect.

[poetmatt]

Wrong. The liability for the lawsuit would not be transferred by the deal, so YCM would take everything BUT the lawsuit's liability, therefore making them "magically liable for nothing". Thats why YCM wants to do this deal, they get no risk out of it other than managing a company. Also look a little deeper, YCM has some ties to microsoft.

Re:

[mce]

TFA claims that YCM would also get the litigation claims, and that's what I used as a basis. Yes, I tend to RTFA before posting.

But in any case, what I wrote cannot be "100% wrong", as you claim with assumed god-like superiority. Irrespective of their motives and who is behind it (I personally don't believe the "it has to be MS" FUD party line myself, but who knows maybe I'm actually wrong on that one...), fact remains that firms like YCM do not step into risks - be they major or only reasonable - withou

Re:100% incorrect, as stated.

[poetmatt]

Let me try to explain better. YCM is accepting the company, but SCO is retaining the lawsuit liability of this specific case with novell for themselves. Meaning they have all this money but the money has nothing to do with the liability. Novell may have money owed to them by SCO in far excess of 36M or even 46M. We're talking 10+ years of business that got 0% royalties instead of 100% royalties as owed (note: not 96 or 95%, they were supposed to get 100% and return back a percentage after).

If you did some d

Re:

[mce]

Just a few notes: 1) I couldn't care less about +5 or -5 (as this post will show), as I'm long past that age; 2) I did go to groklaw (wanna see the proxy logs?), I just didn't dig deep enough (my mistake), so stop making black-and-white assumptions in whatever way you like and stop pulling in needlessly childish toilet words in order to defend them; 3) you carefully did not adress my critique of your "100% false" claim, as you know you can't beat that; 4) please note that I at least explicitly mentioned tha

Re:

[poetmatt]

Look, I just stated you were wrong. With the "limited information" you had, you were wrong. Could I have been more polite? Sure, absolutely. You decided to open a Bevets style flamewar with the "god comment". I would not have given you an insult had you not earned one by firing the first shot and making it sound like I cared about my ego or someone else's. I said you were completely wrong. Is that bad to have an opinion that your information was incorrect, or did you already state that for me?

I don't have

Re:

[NormalVisual]

I didn't address your critique because I didn't want a flamewar.

Then perhaps you shouldn't have acted like a total asshole.

That can't be right

[einhverfr]

IBM has patent counterclaims which would follow the UNIX IP. If YCM takes over the UNIX IP, and they let SCO take on the current liability, then IBM's counterclaims could still make their IP worthless.

Am I missing something? This is not a no-risk deal for YCM.

Re:

[jez9999]

Next they will need to spend some money to clean up the mess and carve up the pieces.

The only question I have is, how do you carve up a dog turd? Wouldn't it at least be a waste of a knife?

Re:

[Just Some Guy]

I have a feeling that a few years from now the YCM-SCO example might become standard case study in business schools.

I suspect you're right. The biggest question is whether it will be as an example or as a warning.

Re:

[einhverfr]

Not so sure.

This whole thing smells of back-room deals. It basicaly means that you only have two possibilities:

1) Deals have already been made to end the lawsuits (remember IBM's patent counterclaims? Those go with the UNIX business!)
2) There is an honest belief that there is sufficient reward to continue with the suits. In which case YCM will get buried along with SCO.

I certainly hope it is the former. But corporations can be stupid sometimes (remember MS Bob? this could be the same sort of thing bu

Re:

[mce]

Of course the profit could be coming from somewhere else than just sales. Where did I exclude that possibility? Actually, in stating that I wouldn't be surprised to see Novell being involved from before the start, I'm also opening up the path to the idea of additional profit channels. After all, Novell will not get any real money out of SCO anyway unless somebody who actually has money steps in.

Having said that, any alternative profit making scheme must exist in order to exist. By which I mean: looking at

Re:

[oliverthered]

If SCO owes Novell loads of money, more money than SCO is worth then why can't Novell just take over SCO?

Re:

[sortius_nod]

I don't think Novell has any desire to take over a stagnant company.

Re:

[Spleen]

Novell likely doesn't ever expect to collect the debt owed to it by SCO. They've been using it as a tool to put an end to SCO's bully tactics. Novell may not have any desire to take over the actually business, but they could make a business from taking over the product and transitioning the customer base to their SuSE offering. In turn they could release the product source (as they would own it now) to the community. Linux developers could then benifit from any code that might be worth a damn within the

Re:

[MoxFulder]

... Novell may not have any desire to take over the actually business, but they could make a business from taking over the product and transitioning the customer base to their SuSE offering. In turn they could release the product [SCO Unix] source (as they would own it now) to the community. Linux developers could then benifit from any code that might be worth a damn within the product. I think it would be ironic that the very code SCO swears was stolen for the linux kernel, would be completely fair game for the kernel developers.

I'm pretty sure the value of the SCO Unix code is damn close to zero. And actually porting any useful bits into Linux might be higher cost than it's worth.

There's a reason SCO stopped trying to make money off Unix products, and started suing everyone: their products sucked. They lacked the low cost, wide hardware support, and fast development pace of Linux and BSD. They lacked the advanced SMP, reputation, and integrated vendor support of Solaris and AIX.

Over the last few years, Linux and BSD (and even

Re:

[ucblockhead]

Because if it did, it'd be liable for all the other things SCO owes to other companies.

Re:

[CrimsonAvenger]

If SCO owes Novell loads of money, more money than SCO is worth then why can't Novell just take over SCO?

Because they'd inherit SCO's liability to IBM? And Red Hat? And Autozone?

I do not believe that is true

[WindBourne]

Novell will almost certainly want all the money AND the unix business. Keep in mind, that this suit actually did a lot of harm to linux distros. Basically, when it was started with MS's and Sun's backing, Linux was rolling. This was designed to slow down the machine, which it did. This gave Sun and MS time to hold their own while they came out with new distros themselves. If I were Novell, I might want to take a LONG look at it. This is almost certainly part of the golden parachute that MS promised the SCO

Re:

[joshv]

Most likely any sales agreement will also include a settlement with Novell. The new owners will pony up enough money to make everybody happy, rather than run the risk of open ended litigation and damages.

If memory serves

[HangingChad]

The APA, the agreement managing SCO and Novell's working relationship as it pertains to Unix, stipulates that in the event of bankruptcy the ownership rights shift back to Novell. I don't think SCO can sell them if they wanted to.

And why would YCM want to take on the potential liability of the counter-claims against SCO? That makes no sense. Sounds like they want to try to take the meat and leave the potatoes. I doubt that will fly with the BK court.

Interestingly coincidental that the sales price is

Re:

[jrumney]

I wonder how long it will take for the FOSS community to find the links between YCM and Microsoft?

See groklaw (search the comments for Acacia to see the full set of links in this triangle). It took less than the time it took for the story to be posted to slashdot.

Re:

[Wdomburg]

They have OpenServer and Unixware which contain IP beyond the SVR4. They still have a significant installed base of vertical applications (particularly in point of sale and telephony applications). It's emphatically not a growing concern but there's plenty of money to be made in support contracts and migration services for the right company.

Well

[mastershake_phd]

Theres a sucker born every minute. Actually with 6 billion people in the world these days its probably 10 suckers every minute.

Re:

[WgT2]

Either ol' Daryl is a good salesman or those investors are idiots....

it might be both!

Re:

[Trillan]

It's fun to say SCO is done, but I wouldn't be so sure there's no value left. When I last talked about SCO here, I said the stock definitely had more expected value than a lottery ticket. I was ridiculed for the suggestion. (This isn't a very strong statement, either: The EV of $1 in lottery tickets is typically less then $0.25.)

That was at 0.16. When I checked the price just now it was at 0.32. Someone investing then could have doubled their money. (I really, really wish I'd followed my hunch then.)

Sure, S

SCO used to be really good.

[Gordonjcp]

The name is pretty tarnished now, though. I wonder if there's any money in buying up the name and creating a "New SCO"?

Probably not, but I'm sure someone thinks it's worth a shot.

Tell you what, I'll give then 50 quid cash-in-hand for the rights to the name.

Re:SCO used to be really good.

[BadAnalogyGuy]

York Capital Management is a hedge fund management outfit. They are not going to be breathe any life into SCO. They are going to tear it apart and sell off what they can and try to make a profit over and beyond the 30+ million they are intending to invest.

If they didn't see any upside here, they wouldn't have made the offer. You can bet SCO's got something of value that York will be able to sell off at a tidy profit.

Re:SCO used to be really good.

[Calinous]

Support contract for already installed Point Of Sale devices. This is the only SCO operation I know of, that was workable.
      They could compete against Microsoft based on price in this sector.
      There might be other places with installed SCO base - and there is money to be had from there, either from continuing support or from help with migration to another platform

Re:

[BadAnalogyGuy]

Are you listening? They are not going to run the company after the purchase. They are going to carve it up and sell off all the assets.

They are not in the business of running businesses. They buy distressed businesses at a steep discount and destroy them for a profit.

Re:SCO used to be really good.

[mce]

I can't know whether he's listening, but for York Capital Management to make a profit out of the operation, they need something viable they can sell. The parent post is in essence pointing at the support contracts for already installed POS devices as that viable thing.

Re:

[bstone]

There is nothing left worth selling. SCO has bludgeoned UnixWare and Open Server to death. They have lost a total of $250 million running the company for the last seven years (of course $100M or so was thrown away on fantasies of lawsuits), and the product hasn't been maintained for years. The only customers are those stuck with legacy systems with proprietary hardware/software that can't be replaced easily. The only way to ever get any new customers would be for a trusted company to put massive amounts

Re:

[Tanktalus]

To the right person, SCO has something of value. Two things. But only a handful of corporations would find value in them. First is a customer list. Second is the source to any proprietary data. This would allow a (former) competitor the opportunity to come up with a unique migration plan to migrate SCO customers from outdated hardware and software to the competitor's software (and hardware, if it's not commodity hardware anymore). Sure, they could try to do that now (think all the migration kits for g

Re:

[Slashcrap]

And with that migration plan comes a fairly-assured income stream as I'm pretty sure a significant portion of SCO's current customers will want an upgrade some time this decade...

I think the problem is that a significant portion of SCO's current customers will want an upgrade some time this decade. For instance to Xenix or Windows 3.0.

Re:

[dan the person]

They are not going to be breathe any life into SCO. They are going to tear it apart and sell off what they can

In other words, the are going try and breathe life back into those parts that look like they might have a chance of survival.

Better than everything going down with the ship.

Re:

[mabhatter654]

considering SCO owes Novell large sums of money, it would seem that Novell should get any of that cash. Perhaps this is an exit plan from SCO to get sold off so the board gets money... which shouldn't happen. They destroyed the company, they should simply lose to Novell and get nothing in return, heck even make sure you get any company cars, laptops.. call the police to recover if necessary.

Re:

[rucs_hack]

well for one thing theres that huge rack that IBM sent them full of their version control system, that's got to be worth something.

Re:

[Opportunist]

Yup. And everyone will hate it, so they will claim they switch back to the old kind, call it "classic SCO" but actually they just replaced Darl with someone even slimier.

It's a joke?

[sm62704]

I googled "York Capital Management", the 2nd hit was their "about us" [yorkcapital.com] page. At the very top of the page it says "YORK YORK YORK YORK YORK YORK YORK YORK YORK YORK"

Isn't that Curly Howard [wikipedia.org] of the Three Stooges [wikipedia.org] fame's laugh?

It's getting a laugh out of me! YORK YORK YORK YORK YORK YORK YORK YORK YORK YORK!

-mcgrew

Re:

[Gordonjcp]

NEW SCO 2.0 BUY NOW!!

Nononono... NEW! Sco.licio.us 2.0 Beta! Get your invites here!

Golden parachute

[greg_barton]

It's a golden parachute. Follow the money.

Re:Golden parachute

[Cheesey]

They're going to throw Darl out of a plane, strapped to a large chunk of heavy metal?

Well, that's got to be worth $30 million.

Can we also make him wear a T-shirt saying something like "I tried to fix my obsolete business model using litigation", then drop him near the RIAA headquarters?

Re:

[Opportunist]

Can we also make him wear a T-shirt saying something like "I tried to fix my obsolete business model using litigation", then drop him near the RIAA headquarters?

Near? For 30 mio I kinda expect that they can afford hiring experts that know how to hit their target!

Re:

[Simon Brooke]

Near? For 30 mio I kinda expect that they can afford hiring experts that know how to hit their target!

Where you going to hire that kind of talent [bbc.co.uk]?

Re:

[at_slashdot]

"They're going to throw Darl out of a plane, strapped to a large chunk of heavy metal?"

Would it make any difference if they'd strap him to a chunk of light metal? I thought this was elucidated around 1500 By Galileo or probably somebody else...

Re:

[oatworm]

Depends on how it's shaped. Wind resistance tends to muck things up a bit. If it's literally parachute-shaped, there could be very significant differences.

There's probably something there

[simong]

I just hope that the bidder doesn't think that it's the IP. There is probably enough SCO support work out there to make a viable business though, if there are people who are still paying for their support.

Re:

[sm62704]

I just hope that the bidder doesn't think that it's the IP

I hope they do. They're vulture capitalists; they buy out companies, carve them up, and sell off the assets. When I worked at Disney in the early 80s, Reagan pushed through a huge capital gains tax cut, which was followed by an orgy of buyouts. See, the capitao gains tax is a tax on businesses that are sold. This tax is an incentive to NOT sell a company.

Vultures like this got filthy rich, while working people suffered. One of these sleazeball outfit

Re:

[mattpalmer1086]

That's just misdirection and spin. The court agrees that all the things SCO actually wrote themselves, they own the copyright to. Err... wow... On the other hand, the court also said they don't own the copyrights to Unix, the actual subject of the court case.

A bit like a criminal convicted of theft saying "but the court agrees that anything I made myself, is really mine!".

(Sorry to make a theft/copyright *analogy* here - they aren't the same crime, before anyone leaps in).

ties to MS/Baystar?

[nietsch]

I wonder how many degrees of separation there are between this new firm and Microsoft? MS has employed some wonderfull machinations in the past to further fuel tSCOg legal battle, and now when the battle is finally lost, up comes another firm offering some golden parachutes to the management?
Somehow I remain unconvinced that those responsible will be punished. The nuclear option seems pretty good to me, but I don't think the US would appreciate a 30 mile crater where Redmond used to be.

Re:

[WindBourne]

Considering that Boeing, MS and Hollywood are America's biggest exports, probably not. And boeing is about to be a lot less (they have shifted a number of jobs offshore to help sales; basically they were forced to copy Airbus's model, since airbus did this to get sales). And there is more resistance these days to Hollywood's copyright extensions. So, no, the feds are not going to allow it (though plenty of Americans would go along with it).

Re:

[Just Some Guy]

Considering that Boeing, MS and Hollywood are America's biggest exports, probably not.

According to the CIA World Factbook [cia.gov], the biggest exports are:

agricultural products (soybeans, fruit, corn) 9.2%, industrial supplies (organic chemicals) 26.8%, capital goods (transistors, aircraft, motor vehicle parts, computers, telecommunications equipment) 49.0%, consumer goods (automobiles, medicines) 15.0% (2003)

Although "computers" is on the list, "computer software" is not and other subcategories are sufficiently narrow that I think it would be if it were significant (eg "motor vehicle parts" a

For once

[clickclickdrone]

The old /. joke expressed as 4 lines that end with 'Profit' is not really applicable.

Re:

[NoodleSlayer]

You just need more question marks in this case.

Re:

[MLease]

You mean instead of the "Profit!" line?

-Mike

Re:

[mortonda]

You mean,

• buy SCO
• ??
• ??????????

Lameness filter thinks this looks like ascii art. I guess that's a sad commentary on what is accepted as art these days.

Re:For once

[muffen]

The old /. joke expressed as 4 lines that end with 'Profit' is not really applicable.

It's actually a three-line joke from Southpark.

The kids follow the underpants gnomes, and when ask why the underpant-gnomes are stealing people's underpants, they show a big board where it says:

1) Collect Underpants. 2) ??? 3) Profit

Everytime the kids ask what step two is, they get the answer that step three is profit.

It's imho the best episode of southpark, you should definitely watch it!

Re:

[kripkenstein]

Indeed, excellent episode. Now, if only there was some place online - a website of sorts - where you could view the relevant part of the episode [youtube.com] ;)

Re:

[leuk_he]

Are you sure that Southpark is the source and did not use slahsdot as a source? Can you dig deep in the bowels of slahsdot and fin the first 1.2.3. and confirm it is after the first broadcast of southpark?

that episode is from http://en.wikipedia.org/wiki/Underpants_Gnomes [wikipedia.org] december 1998.

Re:

[Just Some Guy]

It's actually a three-line joke from Southpark. The kids follow the underpants gnomes [...]

Solid proof that nothing makes a joke funnier than explaining it so that others can understand the punchline.

Re:

[LaminatorX]

That's an old South Park joke, you insensitive clod!

Capital Management

[WibbleOnMars]

This is basically a private equity buyout. Private Equity is the big buzzword in the world of big money at the moment. What generally happens is that the buyer sees a company which it feels is underperforming and has a depressed share price, and offers a good enough price for it that the shareholders can't refuse. The money all comes from bank loans, which are secured on the company being bought -- a bit like a mortgage is secured on the house you're buying -- so as long as the bank agrees to the loan, it doesn't actually cost the buying company anything up-front. Once the purchase has gone through, they buying company needs to get the money to pay off the loan. This money comes from making savings at the company they've bought. Typically this would mean asset stripping, re-organising, selling off product lines and divisions, or whatever else it takes to make the money back. Wholesale redundancies are also almost certain. When a reasonably solid, viable company is bought out by private equity, they usually end up getting transformed into a much leaner and smaller company, and getting sold on again in the space of a couple of years. When it happens to a company that isn't solid and viable, the private equity firm will generally just sell off all the assets of the company, aiming to make a profit on the purchase price, and then quietly close down the husk that remains. This is what I predict will happen in this case. The buyer is looking at the assets -- the Unix operating system, the patents, licenses, and all the rest, and they've decided that it's worth more than $36 million. Of course, the strategy only works if there are people out there willing to buy the assets for more than $36 million. I suspect there probably are. Even with the lawsuit results, there is enough left to cherry pick. You can be pretty certain they'll get rid of the lawsuits as quickly as they can; they're paying a block of lawyer fees up front to secure the purchase, but they won't want to pay any more, as it'll eat into the profitability of their bid. The law suits would require a long-term strategy, but a buyout like this will be geared solely toward making a short-term profit. The asset management company certainly won't be buying any of their debts, so the $36 million goes to the remaining SCO company (SCO Mobile? I guess they'll rename themselves to try to get rid of the burden of the name SCO). Pays off their lawyer bills, pays off their debts to Novell and other creditors, maybe even leaves them with a few pennies to rub together at the end if they're lucky, leaving SCO Mobile as a theoretically viable (albeit not particularly valuable) company.

Re:

[neillewis]

Unfortunately despite all their bluster they didn't have any patents and Novell now claims copyright on Unix. Caveat emptor.

Re:

[einhverfr]

They still have copyrights of their own and UNIX license revenue.

The big issue is that unless the lawsuits are stupped, IBM will more or less destroy what UNIX IP SCO does have via patent infringement lawsuits.

There may be other assets here too, MWouldn't it be funny of Microsoft purchased the SCO OpenUNIX source code copyrights (full circle since the original SCO got their UNIX division started by buying Xenix from Microsoft).

Re:

[junklight]

The thing is SCOX has a market cap of around $5m at present. So a hostile takeover would cost considerably less than $36m. So how is this good value fo r the equity company and its investors?

Re:

[WibbleOnMars]

The thing is SCOX has a market cap of around $5m at present. So a hostile takeover would cost considerably less than $36m. So how is this good value fo r the equity company and its investors? Because they're just buying the assets and not the debts, bad name, lawsuits, etc. SCO gets to keep all that junk. ;-)

Re:

[mce]

Because they're just buying the assets and not the debts, bad name, lawsuits, etc. SCO gets to keep all that junk. ;-)

Which as such would seem like good news for Novell, because then there would be $36m more to grab from the SCO corpse.

However, TFA clearly states that YCM would be taking over the litigation claims as well. The whole idea is that said SCO corpse actually remains viable by focusing on something other than UNIX and litigation. Novell will then need to collect the money it is due from YCM

Re:

[faedle]

The thing that I don't like about this scheme, is that YCM will (wisely) withdraw all the lawsuits before focusing on making a profit out of the deal. This means that at the end of the whole 4 year mess, there will be no clear verdict stating how badly SCO has behaved.

IANAL, but I'm not 100% sure SCO can "back out" of this whole 4 year mess that easily. IBM's counterclaims are still on the table, and my understanding is at this stage SCO is in no position to dismiss those claims. IBM seems hell bent on ge

A tad biased

[Anonymous Coward]

You know, it's articles like these which demonstrate why Slashdot's become less than necessary reading these days.

Whatever SCO (the company) has done to Linux, SCO's UNIX systems were alright. They weren't fashionable, but, they have a working kernel and standard user-land utilities. Obviously, the SCO IP isn't quite as fresh as it once was, but, there'd still be gems to be mined. They also (still) have a (declining, but, still present) bucket of support contracts.

In a market where Facebook (without an obvious revenue stream) is valued in the billions, you'd have to be an unbalanced zealot to suggest they couldn't raise $34M for their entire UNIX related IP collection. Sure, it's not been selling well in the last couple of years, but, you should never judge the quality of a product by the skills of the salesmen.

Re:

[Alioth]

But what IP does SCO actually own? It's already been established that SCO are merely a toll collector for Unix, it's Novell who still actually owns it.

Time moves fast in IT

[SmallFurryCreature]

Its unix was never a top contender. It sure as hell ain't a Solaris. SCO ain't no IBM, it ain't even a HP. If you want cheap, there is Red Hat or any of the other Linux distros. So what is the value of UnixWare/OpenServer?

You don't get the support of IBM, you don't get the sheer robustness of Solaris, you don't get the opensource from Linux, you just pay more then Linux, get less support then from IBM, and a WHOLE lot less robust not just then Solaris, but ALL the other unixes as well. SCO unix is a dump. NOBODY LIKES IT.

The only thing that has going for it that it has a large install base for historical reasons, point-of-sale (cash register systems, fast food checkouts), who are often reluctant to switch. IT in this sector is always a mess, things never work, are always delayed and cost a fortune, so when a system finally operates, they don't want to change (nor need too, cash register technology really doesn't advance that much).

Don't forget that SCO hasn't been doing any development on their closed source unix versions, they were a linux shop too once.

Basically current IT strategy (HA) is for everyone who can to move away from SCO. Get that crap out of there at the next upgrade cycle. It never was a good product, has been neglected and the company has proved to be lead by the truly insane. They SUED their OWN PAYING customers. You don't do that.

Even you advice against using SCO "Whatever SCO (the company) has done to Linux, SCO's UNIX systems were alright." We disagree on that you think they were once alright, but even you admit that your are talking PAST tense.

As for selling it all of, WHAT IP? They have been proven in court not to own Unix, what IP have they got left?

So why are they doing it? Who is to say they do? MS been behind other finance deals related to SCO. For MS blowing 36 mill is nothing. Spare change. Could they be trying to buy SCO to continue the fight againt Linux? They done it before, and Ballmer is still on the warpath.

That is the most likely scenario to me.

Re:A tad biased

[l-ascorbic]

In a market where Facebook (without an obvious revenue stream) is valued in the billions...

You realise Facebook is pulling in $150 million per year revenue, right?

Re:

[Wdomburg]

Alright isn't exactly the word that springs to mind. Ugly. Overpriced. Ancient. Painful. Openserver 5 was a SVR3 derivative kept alive far too long with absolute minimal support (last I looked they still hadn't fixed bugs that I reported a decade ago). Unixware 2 was okay, but they didn't develop that, they purchased it. Unixware 7 was marred by the introduction of some stupid OSR5isms (ostensibly to ease migration) and incredibly poor quality control. I can't speak for OpenServer 6 since that was r

I Apologise for my bias

[WebCowboy]

...however I am only human and I hold enterprises that use litigation as a primary business model in pretty low regard. Plus sometimes being a little "trollish" elicits a mire lively discussion on the topic.

Obviously, the SCO IP isn't quite as fresh as it once was, but, there'd still be gems to be mined.

The tone of the article submission not only comes from my distian at Darl & Co's business conduct, it comes from personal experience with the product itself. You are being extermely charitable when you

From Groklaw comments:

[Udo Schmitz]

User Jaywalker over at Groklaw has an interesting comment [groklaw.net]:

"JGD Management Corporation has its principal executive offices at 1118 East Green Street Pasadena, California 91106 (http://www.secinfo.com/d12TC3.v51a.htm)

If you google the address the first match is a reference to a page on Edgar which provides the Form 4 (any of you US business types know what that is?) for a comany known as Arrowhead Research Corp which has one R Bruce Stewart as its CEO and Chairman of the Board.
(http://edgar.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?Sessi onID=T-hII2bI2EHwHrP&ID=3669175)

R Bruce Stewart founded Acacia Research Corporation in March 1991. (http://www.forbes.com/finance/mktguideapps/personinfo/FromPersonIdPersonTearshe et.jhtml?passedPersonId=927443).

Has anyone heard of Acacia Research before?

Hmmmm.

It has to be a coincidence."

Yikes!

[Colin Smith]

You just found one of the illuminati.... You'd better run.

 

Re:

[Udo Schmitz]

Just because I'm paranoid doesn't mean they aren't after me.

Re:

[Opportunist]

I AM NOT PARANOID!

(because if you are, THEY notice it immediately!)

Re:

[Colin Smith]

FFS, it was a joke.

Go buy a sense of humour. See if you can't come up with a real slashdot login while you're at it.

 

Microsoft Stink

[canuck57]

This has Microsoft stink all over it:

http://www.google.com/search?q=microsoft+Acacia+Research&btnG=Google+Search

Re:

[Otter]

It has to be a coincidence.

Maybe I'm missing something. This company is in the same office building as a second company, the CEO of which founded a third company 16 years ago. The "coincidence" is what?

Given that the best the kookazoids at Groklaw can come up with is some sketchy conspiracy theory about "nanotubes", there doesn't seem to be a whole lot here.

More ties:

[walterbyrd]

Acacia = "InterActive Group" = "Arrowhead Research" (= Msft?)

"On May 29, 2007, we [Arrowhead Research] sold to certain institutional and accredited investors an aggregate of 2,849,446 shares of common stock (the "Private Placement Shares") at a per share purchase price of $5.78, and Warrants to purchase up to an additional 712,363 shares of common stock (the "Warrant Shares"), exercisable at $7.06 per share, in the Private Placement. Two investment vehicles of York Capital Management, a stockholder holding greater than 10% of the Company's Common Stock, participated in the offering."

http://www.secinfo.com/d14D5a.u4d4r.htm [secinfo.com]

"Arrowhead Research" refers to Arrowhead Research Corporation, a Delaware corporation and formerly known as InterActive Group, Inc."

http://www.nasdaq.com/asp/symbols.asp?exchange=NGM&start=A&sort=cap&Type=0 [nasdaq.com]

"The consolidated financial statements include the accounts of Arrowhead Research Corporation (a Delaware Corporation), formally InterActive Group, Inc., and Arrowhead Research Corporation (a California Corporation), a wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
. . . .
In October 2003, in connection with an initial private placement of Common Stock, the Company [Arrowhead Research] accepted 80,255 shares of Acacia Research Corporation, valued at $500,000, and $500,000 cash in exchange for 1,000,000 units. The shares are carried on the financial statements as marketable securities. See Note 3."

http://sec.edgar-online.com/2004/05/17/0001015402-04-002107/Section7.asp [edgar-online.com]

"On May 29, 2007, we [Arrowhead Research] sold to certain institutional and accredited investors an aggregate of 2,849,446 shares of common stock (the "Private Placement Shares") at a per share purchase price of $5.78, and Warrants to purchase up to an additional 712,363 shares of common stock (the "Warrant Shares"), exercisable at $7.06 per share, in the Private Placement. Two investment vehicles of York Capital Management, a stockholder holding greater than 10% of the Company's Common Stock, participated in the offering."

http://www.secinfo.com/d14D5a.u4d4r.htm [secinfo.com]

Form 4

[rodentia]

Form 4: Statement of changes in beneficial ownership of securities

Jaywalker's link raised on google is fortuitous. The purchaser identified in the APA linked from Groklaw is JDG Management Corp d/b/a York Capital Management [sec.gov]. From a recent filing [sec.gov] for the purchase of a company in Israel:

The sole shareholder of JGD is James G. Dinan [yorkcapital.com].

York Capital Management is a hedge fund. It invests in a lot of things, but this transaction looks like it might be a personal play. $36 mil is peanuts for this cat.

Better idea

[Spy der Mann]

why don't they just sell themselves in ebay? After all, a paperclip can generate millions! :)

Re:

[Rolgar]

Opening bid at $699? Do I have $699?

BS, There is no buyer

[Herkum01]

There is no bid, SCO said in bankrupty court that there "MAY be a buyer".

They are going down the tubes and they are doing anything they can to stem the tide. If they means they go to bankruptcy court to spread this rumor, so be it. Only a fool would believe them.

Agreed - this is stock manipulation

[Weaselmancer]

This is just a way to milk a little more money from the stock. Issue a rumor of a buyer and people start buying the stock. That will in turn bump up the price of the stock.

And it's working - look at the current price of SCOX. [google.com] And look at the activity, too. Also a telling point.

This is just more of the same from Darl and the gang. More fraud. I just hope someone with some legal clout eventually sees this for what it is. I'd love for the SEC to come down on these crooks like a ton of bricks.

So let's unwrap this

[tietokone-olmi]

The SCO thrust caught fire, blew up and is sinking at a respectable clip. Since it became obvious that this would happen (sometime in the summer), SCO's puppet masters had them "re-focus" their business into "mobile solutions". We should all know that "mobile solutions" is where shitty ideas and companies re-focus in order to perhaps get a little bit more investments in; therefore we can consider that SCO is basically a walking corpse at this moment.

This "Unix IP" sale is so that SCO can be permitted to sink and Novell & IBM may attempt to get their butter & 2K monies (as in JA I AM MADE OF) from a shell of a shitheap, if they can. Once the "Unix IP" package is moved elsewhere, SCO's puppet masters may attempt to re-do this whole operation in a few years in a more favourable legal environment and perhaps a judge that is more "reliable" (i.e. in their pocket).

There's a minor hole in this coreography though. If 6 million has been offered for the "Unix IP" parcel, then it should be obviously outside the group of stuff that SCO may hammer to get out of deep red again. The money from the sale would obviously go to pay executive salaries (some 80,000$ a month, is it?) and lawyer fees (well past 5 million US$, I reckon). I suppose we'll see whether the SCO chapter 11 trustee is in the puppeteer's pocket or not.

I must say that Microsoft planned this one out pretty well. Of course their plan relies on corruption to smooth the way so that their side can execute their moves quicker than the opposition, as always, but still.

Re:

[rucs_hack]

SCO's puppet masters may attempt to re-do this whole operation in a few years in a more favorable legal environment and perhaps a judge that is more "reliable" (i.e. in their pocket)

Thats extremely unlikely. Every strategy SCO came up with over the course of litigation failed, every single one. Their initial plan seems to have been a pump and dump type affair, getting IBM to buy them out to remove the problem. It was Novells involvement that really shagged them. They were onto a losing slope from that point

Re:

[rkhalloran]

As has been said many times elsewhere in this piece, the judge has ruled that Novell holds the UNIX copyrights, such as they are. All SCOX might have direct rights to is whatever code has been added to the old AT&T codebase since the deal.

The Utah judge also ruled that the Sun & Microsoft payments were to some extent SysV license fees; the trial that would have started the week SCOX filed BK was to determine how much. Those monies (conversion) aren't supposed to be part of the bankruptcy estate, b

I would not buy SCO's assets-LOSING VAR BUSINESS

[scottsk]

SCO's UnixWare and Xenix were a staple of the VAR world, but I would not touch SCO's assets if I was a paper-pushing business person. People are abandoning UnixWare for Linux. Example: IBM had a program to sell mainframe emulators that ran on UnixWare and Linux. The program was wildly successful, many orders of magnitude beyond what IBM thought it would be, and the revenue boost to SCO was huge (back when it started, Linux wasn't as robust and accepted as it is now). So it's ironic that one of SCO's big pro

I, for one..

[theorem4]

I, for one, welcome our cash-laden overlords.

why won't it die

[chrome]

it's like a zombie ... and it wants to eat our brainz.

our delicious, unix based, brainz.

Re:

[roscivs]

They're not unreasonable, I mean, no one wants to eat our eyes.

Litigation Not Included

[NigelBeamenIII]

It should be noted that the agreement specifically EXCLUDES the transfer of the Novell and IBM litigation to York. The actual motion can be read on Groklaw (as usual) with more info than the LinuxWorld article.

Follow the money

[Daniel Phillips]

Who is York Capital and what is the connection to Bill Gates?

Re:

[FellowConspirator]

Novell can't veto the sale. What they can do is take their ball (the UNIX business) and go home. Presumably a purchaser would take this into account (and, perhaps, offer repayment on the monies due to them). I bet that a buyer could make the sale contingent on Novell agreeing to accept 50-cents on the dollar for what they are owed by SCO if it was guaranteed and all legal activities stop. If Novell didn't agree, the company would otherwise not buy and SCO would litigate away all potential cash.