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)
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Y'know, this is the first time I wish Slashdot was more like fark, so I could post that pic of the guy saying "Aw geez, not this shit again!"
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.
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:4, Interesting)
A 'pure' free market does not refer to a lack of regulation, but a market in which the government enjoys no special privilege over private enterprise. The logical conclusion of such a system would result in privatized police forces, fire companies, etc. competing on equal terms with the analogous government entities. Both government and private enterprise would still be subject to regulation.
Consequently, capitalist arguments against anti-trust laws are not inherent to capitalism in general, but are made from the position that that class of regulation does not result in a more productive economy. In contrast, regulations that capitalists generally consider to be necessary for a healthy free market economy would be contract law and property law.
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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.
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No, it does not. Who talks about "complete information" are Keynesian economists who themselves develop these hypothetical models, then misattribute them to the (actual) free market theorists all the while showing they don't exist in reality, as a means of defending their system of government-managed
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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 happe
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I don't understand how this cash injection serves Microsoft's interests. SCO is on track to lose all of its court cases. This will only serve to confirm that Linux has a clean code base.
What Microsoft should do is sell SCO a dozen of its 236 bullshit patents it claims Linux violates and have SCO launch the patent lawsuits. Then Microsoft can pretend to be innocent and avoid a patent Armageddon scenario with IBM and other players.
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.
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Re:Look for more Microsoft money behind (Score:5, Funny)
http://www.afunnystuff.com/pictures/Forum-pics/Aw-jeez-not-this-shit-again.html [afunnystuff.com]
I also think this one is appropriate:
http://img.photobucket.com/albums/v694/unclespellbinder/Animated/beating-a-dead-horse.gif [photobucket.com]
Re:Look for more Microsoft money behind (Score:5, Insightful)
~ http://img88.imageshack.us/my.php?image=lolmcbridelj8.jpg [imageshack.us]
Re:Look for more Microsoft money behind (Score:5, Funny)
It gets better (Score:3, Insightful)
Re:It gets better (Score:5, Funny)
When I read such statements, I seriously consider stopping reading
A life of yatches, women, Lamborghinis, women, gulfstream jets, women, casinos and women is already hard enough without seeing such kind of king.
Re:It gets better (Score:5, Funny)
Wrong. That's the Bushes behind that move. (Score:5, Informative)
What exactly does it do?
To find out, we peeked down the rabbit hole.
FORTUNE Monday, March 18, 2002
The Carlyle Group, a Washington, D.C., buyout firm, is one of the nation's largest defense contractors. It has billions of dollars at its disposal and employs a few important people. Maybe you've heard of them: former Secretary of State Jim Baker, former Secretary of Defense Frank Carlucci, and former White House budget director Dick Darman. Wait, we're just getting warmed up. William Kennard, who recently headed the FCC, and Arthur Levitt, who just left the SEC, also work for Carlyle. As do former British Prime Minister John Major and former Philippines President Fidel Ramos. Let's see, are we forgetting anyone? Oh, right, former President George Herbert Walker Bush is on the payroll too..."
http://www.carlylegroup.net/thebigguys.htm [carlylegroup.net]
So now the Bushes are going to send Jim Baker to court to steal Linux.
Re:Wrong. That's the Bushes behind that move. (Score:5, Funny)
The presidents are toast.
Re:Wrong. That's the Bushes behind that move. (Score:4, Funny)
Thank you dear sir for the shower of soda.
Yours Truly,
pionzyphers keyboard.
Re:Wrong. That's the Bushes behind that move. (Score:5, Funny)
Re:Wrong. That's the Bushes behind that move. (Score:5, Funny)
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Groklaw Coverage (Score:5, Informative)
Can't believe they forgot the Groklaw link!
Re: (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, Funny)
Re:Look for more Microsoft money behind (Score:5, Insightful)
Re:Look for more Microsoft money behind (Score:5, Informative)
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So, you're saying Michael Moore is not a trustworthy source?
Who'da thunk it!
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Re:Look for more Microsoft money behind (Score:5, Interesting)
Where top Bush administration types meet the members of the family of Usama bin Laden.
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In the book House of Bush, House of Saud, author Craig Unger states that Saudi Arabian interests have given $1.4 billion to firms connected to the Bush family. Nearly 85% of the $1.4 billion, or about $1.18 billion, refers to Saudi Arabian government contracts awarded to defense contractor BDM in the early to mid 1990s. Carlyle, however, sold its interest in BDM before former President George H. W. Bush joined as an advisor. Although, it should be noted that Bush family confidant James A. Baker was on the board when the interests were sold.[citation needed].
The Saudi Arabian relatives of Osama bin Laden were also investors in Carlyle until October 2001 when the family sold its $2.02 million investment back to the firm in light of the public controversy surrounding bin Laden's family after the terrorist attack on September 11, 2001. The bin Laden family has publicly disowned the al-Qaeda leader.[5] Osama bin Laden has no publicly known or acknowledged economic interest in Saudi Binladin Group (SBG), whose investments were in part managed by the Carlyle Group until the arrangement was terminated by mutual consent.
Re:Look for more Microsoft money behind (Score:5, Interesting)
Especially considering Lou Gerstner, former CEO of IBM, is on the board of the Carlyle Group. That's a bit of a WTF moment right there...
damn Damn DAMN! (Score:5, Funny)
Man oh man...
This news completely ruins my day.
I just know that tonight while my lady is receiving the annual ~Valentine Fisting~ my mind will be on SCO and their ridiculous lawsuits, not on the work at hand. She'll know something is bugging me, get pissed off and make me stop. I'll have KY to my elbows for nothing.
Thanks SCO.
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Re:damn Damn DAMN! (Score:5, Funny)
well... (Score:2)
-GiH
Brilliant! (Score:5, Insightful)
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Maybe they are going to sue the lawyers for getting them into this. Or Microsoft for talking them into this....
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Re:Brilliant! (Score:5, Interesting)
If that hive of villainry fails, some of their dealings could see the daylight. And at least a couple of big companies are really interested in making sure this doesn't happen. So they funnel money into the sinking ship to keep it afloat or make it sink in a secluded place -- it's better to lose some cash than have the dirt revealed.
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Re:Brilliant! (Score:5, Funny)
Re:Brilliant! (Score:5, Funny)
Geniuses that just filed Supreme Ct with cronies (Score:2)
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A fool and your money are soon partners.
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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
Yikes (Score:3, Funny)
Re:Yikes (Score:5, Informative)
Certiainly doesn't look like a winning product portfolio, well not in their hands at least.
Re:Yikes (Score:5, Interesting)
Re:Yikes (Score:5, Interesting)
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.
I just sat there biting my tongue and changed the subject quickly, but it was really odd talking to someone "on the other side of the fence" who was a developer, and not in management.
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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.
So what else does SNCP own (Score:3, Interesting)
Obligatory (Score:5, Funny)
Step 1. Pile money onto a sinking ship
Step 2. ???
Step 3. Profit!
I have a very poor financial outlook for the near future, why can't somebody give me $100 million? Hell, I'll use that to make legal claims about somebody else's IP! I can probably even develop an operating system nobody in their right mind would use.
THe ??? bit (Score:5, Insightful)
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Step 2. ???
Step 3. Profit!
Calm down, everyone (Score:5, Informative)
Bruce
Re:Calm down, everyone (Score:5, Insightful)
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Unless Linus Torvalds issues a press release with some huge-arsed confession in it, this is pretty much a done deal.
And, whoever ends up owning SCO will still have to face countersuits from both Novell and IBM.
WTF, over?
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As much as I would like to
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I'd also love to find out what this new cash infusion is supposed to accomplish. Did Darl pull one last trick over a hapless investor? Or is there something else entirely going on? Because on the face of it, SCO is dead, even with an extra $100 million to blow through.
Norris? (Score:5, Funny)
I'm glad it's just *Stephen* Norris.
Norris won't sue Novell or IBM (Score:5, Funny)
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Norris can't make SCO profitable, (Score:2)
$100 Million (Score:5, Funny)
* Taking a beating in court.
* Its only valid business is a dying operating system.
* Your customers and pretty the entire tech industry hates you.
* The company is in chapter 11.
* The company has a negative cash flow.
* The judge in your case appears to hate you because of your court practices.
* I hate you.
Yeah, lets throw $100 million at them...
Connect the dots (Score:5, Interesting)
Thanks to spacelifeform on GL:
http://www.iht.com/articles/2007/02/12/bloomberg/bxfour.php [iht.com]
NEW YORK: Four Seasons Hotels, the manager of 74 luxury hotels, said Monday that it had agreed to be taken private by Bill Gates, Prince Alwaleed bin Talal and the chief executive for $3.8 billion, including debt.
Coincedence?
----
Who is Stephen Norris,
http://www.snpartners.com/norris.html [snpartners.com]
Looks like there could very easily be some behind the curtain financing of this through foreign nationals.
---
Mr. Norris acted as a principal financial advisor to Prince Al-Waleed bin Talal Al Saud of Kingdom Holding Company, in structuring and negotiating the re-capitalization of Citibank, which returned over $15 billion in profits on about $590 million of equity invested. He also advised or played a key role in other Kingdom Holding Company investments. He was appointed by former president George H.W. Bush and confirmed by the U.S. Senate to serve as one of five governing members of the $100 billion Federal Retirement System Thrift Investment Board.
Since 1997, Mr. Norris, and certain members of his team, have worked on a number of investments including real estate investments in Europe and the United States. They were involved in amongst others the privatization of Thompson CSF, the recapitalization of Suez, the acquisition of portions of Credit Foncier's real estate portfolio in Paris by the German firm of IVG, the formation of Nomura's (London) bid for a Dutch mortgage bank, the offer by a major Saudia Arabian investment firm for Lamborgini in Italy, and the formation of a bid by Leucadia International's for the Labouchere Bank in Holland. He also negotiated and structured investments in Synxis Corporation, which was backed by George Soros and Mr. Norris, and MARC Global Holdings.
---
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its a worldwide trend (Score:2, Interesting)
There is an ongoing mad scramble to snag IP assets of all kinds.
(Key word: ALL KINDS)
I have been a long time IT person, and I happen to also be able to this peek into this neo-IP world, so I have a sense of deja vu -- similar to the dot-com frenzied land-grab --except that there are NO joe six packs doing the investing, just ultra-rich+ultra-smart professionals.
If anything is
Oh good (Score:5, Funny)
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 sta
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Also, buying a company for the sake of being able to earn legal awards should be illegal, strictly as a matter of financial sanitation.
But everyone on slashdot knows that if you walk into court with more money than your opponent, you greatly increase your chances of winning, as the RIAA has taught us. The same is true of businesses. Let's say that SCO were to go after Ubuntu. Would you want someone to be able to invest in Ubuntu for the purposes of the court case? What if someone took some code that Ubuntu owned that was under the GPL and sold it for millions and millions of dollars. Could someone invest in Ubuntu in hopes of them recover
Well, there's one bunch that's going to be happy.. (Score:5, Interesting)
oblig (Score:2, Funny)
dons tinfoil hat... (Score:2, Interesting)
-sarcasm?
OH MY GAWD! (Score:2)
Make it stop!! This was an interesting story to follow two or three years ago. Now, it's just brutal! Stupid people with more money than brains... Walk away from SCO. It's dead. Make it stop!! Feel like throwing money away? Drop me a line - throw some at me. I promise you, you won't get it back. Just like you won't get any money back from SCO.
Oh my gawd!
Good (Score:2)
Wait, what? (Score:2)
Is it eventually a good thing? (Score:2)
quoting Groklaw (Score:4, Informative)
"Hahahaha. Maybe this is the key? That's code, I think, for 'this will enable the company to continue to attack Linux'."
bad slasher flick (Score:5, Funny)
Only thing left... (Score:5, Funny)
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 epi
I am worried (Score:4, Insightful)
Stupidity cannot adequately explain this move, which leaves...
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:One clarification (Score:4, Informative)
My first impression is that the bankruptcy are having, or are about to have, some expanding negative effect. This seems a relatively cheap way to solve the problem. If SCO is private, pays off all debtors, then they can defend against external scrutiny, and are free to do as they wish.
The $ 100 million dollar pledge is simply there to say that the company will be funded well enough to pay off future obligations, should they manifest. Furthermore, the additional monies do not seem to be an investment, but a line of credit that the firm will have to repay.
So, in effect, this is appears to be some sort of fancy consolidation loan. Certainly likely done as some sort of personal favor, but I bet no one losses money on it. One hears about these kind of tax shelters all the time.
SCO Sitcom (Score:5, Funny)
This week on SCO
Novel "oh my god!, Im sure I killed him"
SCO "Im baaaaack and I have 100 million dollars"
Red Hat "what crack monkey gave him money ?"
Re:SCO Sitcom (Score:5, Funny)
IBM "Im going to fist you till you scream Oracle"
Oracle "your disgusting, say you truly want me again that turns me on"
IBM "I....."
[PAUSE]
Oracle "whats wrong ?"
IBM "I just felt a stirring in the source.... almost like millions of programmers said WTF!!"
Wrong (Score:5, Informative)
SCO has received nothing except offer (which is probably contingent on many conditions). They cannot accept it without permission of the bankruptcy court. To read some actual facts go to Groklaw.
Hey SCO is in Bankruptcy Court (Score:5, Informative)
This doesn't really help SCO much (Score:5, Informative)
This doesn't do that much for SCO. It gives Novell, IBM and Red Hat cash to go after. Remember, there are substantial legal claims against SCO, and those claims are on much stronger grounds than SCO's claims against anybody.
SCO is headed for their day in court:
U.S. District Court - District of Utah - Court Calendar
Honorable Dale A. Kimball
Tuesday, 04/29/2008
08:30 am: SCO Grp v. Novell Inc (2:04-cv-00139-DAK-BCW) Bench Trial
The only question in that trial is how much money SCO owes Novell. SCO will appeal, but they are unlikely to win.
No Patents (Score:4, Insightful)
Re:Irrational exuberance... or? (Score:5, Funny)