Feeds

SCO threatened with Chapter 7 destruction

'No reasonable chance of rehabilitation'

The essential guide to IT transformation

SCO Group's long-standing legal battles over its claimed Unix copyrights may finally end with US bankruptcy court forcing a Chapter 7 cyanide capsule down the company's throat.

On Tuesday, the trustee appointed by the federal bankruptcy court in Delaware asked for permission to dissolve the ailing shell-of-a-software-company and pawn off its assets.

Trustee Roberta DeAngelis told the presiding judge in a filing that that SCO has "no reasonable change of rehabilitation," adding the company has "tried — and failed — to liquidate their business in chapter 11."

In September 2007, SCO filed for Chapter 11 bankruptcy protection, which shields the company from creditors while it reorganizes the biz. Forcing the firm into Chapter 7 would require an appointed independent trustee to sell all of SCO's assets and distribute the proceeds to its creditors.

"We are reviewing the motion with counsel and will have a detailed response for the court in due course," SCO told El Reg in an e-mailed statement. "We plan to oppose the motion and present our own suggested course of action to the court."

The bankruptcy judge now has three options. He can approve Chapter 7, accept a SCO survival plan under Chapter 11 if it somehow scrounges up the money to pay off its debts, or dismiss the bankruptcy protection plea completely. That decision is likely to come during a hearing set for June 12.

SCO's mess began about a decade ago, when Novell sold Unix trademarks and other assets to the firm. SCO assumed that deal included copyrights to Unix code,and the company used this claim to force Sun Microsystems and Microsoft into licensing agreements. It then sued IBM in 2003, claiming the computer giant was using the allegedly copyrighted technology in its Linux kernel.

A year later, SCO filed a slander of action lawsuit against Novell after the company said it still, in fact, owned the disputed Unix copyrights in SCO's case against IBM. After three years of legal battling, a US district judge in Delaware ruled in Novell's favor and ordered SCO to pay nearly $2.5m in royalties to Novell for unjust enrichment.

SCO filed for bankruptcy about one month after the court's initial ruling. The company is hoping to overturn the decision on appeal.

A copy of motion for chapter 7 is available here (PDF) ®

Next gen security for virtualised datacentres

More from The Register

next story
The Return of BSOD: Does ANYONE trust Microsoft patches?
Sysadmins, you're either fighting fires or seen as incompetents now
Linux turns 23 and Linus Torvalds celebrates as only he can
No, not with swearing, but by controlling the release cycle
China hopes home-grown OS will oust Microsoft
Doesn't much like Apple or Google, either
Sin COS to tan Windows? Chinese operating system to debut in autumn – report
Development alliance working on desktop, mobe software
Eat up Martha! Microsoft slings handwriting recog into OneNote on Android
Freehand input on non-Windows kit for the first time
Linux kernel devs made to finger their dongles before contributing code
Two-factor auth enabled for Kernel.org repositories
This is how I set about making a fortune with my own startup
Would you leave your well-paid job to chase your dream?
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Scale data protection with your virtual environment
To scale at the rate of virtualization growth, data protection solutions need to adopt new capabilities and simplify current features.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
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?