Feeds

SCO punts on Novell bankruptcy claim

Swerves the verge

Internet Security Threat Report 2014

SCO, which Novell claims is on the verge of bankruptcy, had less than $13m at the close of its Q4, less than half the amount its legal adversary Novell says it is owed from the maker of Unix products and services.

SCO, which today released financial results for its Q4, said it burned about $10m in cash in fiscal 2006, which ended in October. About $12.3m of that was consumed funding lawsuits against IBM and Novell, which are contesting SCO's claim to intellectual property rights of Linux. That leaves the struggling company with about $12.6m in cash. (Some of the legal fees came out of an escrow account, explaining why legal fees were higher than over all cash burn.)

Novell last week said in a legal filing that SCO is on the verge of bankruptcy, not just in the event that SCO is ordered to pay $26m in contested licensing fees, but "because of its own financial missteps."

SCO last week responded by calling the claim FUD and a spokesman promised to report "all aspects of our business" during today's conference call.

Proving there are different interpretations of "all aspects," SCO never addressed the bankruptcy issue head on. Asked today whether insolvency was in fact imminent, SCO CEO Darl McBride would say only, "We're comfortable with our cash position." He then referred us to a court document SCO filed last week that he promised would more thoroughly respond to Novell's contention.

We checked but couldn't find a single sentence that addressed the claim that SCO's own missteps made bankruptcy imminent.

Novell says it is owed the $26m under terms of a Unix purchase agreement struck between the two companies. Novell argued it would be irreparably harmed if SCO didn't pay the fee immediately, before it was allowed to be put out to pasture.

McBride did say he expected legal costs to fall in 2007 compared to the previous year, now that fees for many expert and other expenses have been paid. He also said the company would realize savings from a recent round of employee layoffs, but declined to provide an estimate.

What remains clear is that SCO's losses have snowballed in recent quarters. Its fourth-quarter net loss widened to $3.7m compared with $3.4m in the same period last year. Revenue declined 14 percent to $7.3m from $8.5m.

For the year, the company's loss widened to $16.6m from $10.7m in 2005 as sales fell 19 percent to $29.2m.

McBride blamed the slide on competitive pressure on its Unix business, which he said will "level off" over the coming year. He also said a new mobile services business called Me Inc., which is made possible by SCO's back-end server offerings, was a "wild card" that could nonetheless improve SCO's fortunes.

SCO's ability to fund lawsuits claiming intellectual property rights to Linux are of interest to boosters of the open source OS, as well as Novell and IBM, another SCO adversary. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Preview redux: Microsoft ships new Windows 10 build with 7,000 changes
Latest bleeding-edge bits borrow Action Center from Windows Phone
Google opens Inbox – email for people too thick to handle email
Print this article out and give it to someone tech-y if you get stuck
Microsoft promises Windows 10 will mean two-factor auth for all
Sneak peek at security features Redmond's baking into new OS
UNIX greybeards threaten Debian fork over systemd plan
'Veteran Unix Admins' fear desktop emphasis is betraying open source
Google+ goes TITSUP. But WHO knew? How long? Anyone ... Hello ...
Wobbly Gmail, Contacts, Calendar on the other hand ...
DEATH by PowerPoint: Microsoft warns of 0-day attack hidden in slides
Might put out patch in update, might chuck it out sooner
Redmond top man Satya Nadella: 'Microsoft LOVES Linux'
Open-source 'love' fairly runneth over at cloud event
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.