Novell's tardiness in doing its paper work for the US Securities and Exchange Commission (SEC) has triggered nastygrams from NASDAQ and Wells Fargo, trustee of $600m in Novell debt.

Novell is late in filing a Form 10-Q with the SEC for the period ended 31 July because it is still auditing the timing of stock option grants. So NASDAQ has fired off a standard delisting notice. The software firm can fend this off easily enough – an appeal will give it breathing space to get its paperwork in order.

The Wells Fargo notice also looks pretty standard – but since the bank is trustee for $600m in debentures convertible in 2024, the potential consequences for Novell are problematic.

Novell says that Wells Fargo's interpretation of the indenture terms is wrong. It merely has to provide the trustee with the form within 15 days after filing with the SEC. But if Wells Fargo is right and if Novell doesn't get its act together in time, it could have to up pay 25 per cent of the debt on accelerated terms.

Novell says it will file the 10-Q "as soon as [is] practicable". ®

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