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How the World (of SCOX) Ends


SCO v The World

By ColonelZen, Section SCO Related Articles
Posted on Sun Jul 31st, 2005 at 11:18:33 EST

This is just a shortie, just for fun speculations on what we will know and when we will know it of the end of SCOX as we know it.

I'm a cynic and a pessimist.  The end will come in the way which proves most exasperating for us.   We are mostly the moral equivalent of housewives glued to the TV each day for an hour of our favorite soap opera.  Ok we're mostly techies glued to the internet and are a bit more dynamic and interactive than those hypnotically enraptured to a flickering box ... but not by much (and the cynical philosopher wonders, in all seriousness, if the difference matters at all anyway).

The bottom line is that we watch SCOX for entertainment.  They have been a hugely wonderful and satisfactorily stupid supervillian - evil and intent upon malice but never quite capable enough to present a real threat - and allowing us to see IBM, despite its past sins still legendary for it's technical competance, as an adequate superhero.   And it has allowed almost all of us to play our little heroic bit parts in our heads.   I don't think I've ever seen or heard of a case of real life providing this much melodrama this deeply for so many for so long.

The sad truth though is that as this winds down it is going to be some very poor work from a "literary" and dramatic perspective.  We can expect to be disappointed.  Not so much by what happens but by the timing and delivery and lack of elaboration of the denoument of various plot lines.

Novell has dropped its nuclear bomb, presented its counterclaims against SCOX.  In essence they are everything we've been saying, a listing of all the various ways SCOX has lied and misrepresented reality, wrapped up in one package and presented to Kimball with a request to rule on it.

More significantly it brings up time and money.  It raises the real likelyhood that upon final finding SCOX will be obligated to Novell for more money than it currently has in cash - and it asks that a trust be established and funds for those likely obligations be sequestered.   If granted, this is instant bankruptcy for SCOX.  And the time and money and equity issues mean that if Kimball does not rule quickly Novell will be able to appeal the lack of ruling.  

SCOX's problem is that there is almost no compromise position possible.  The potential obligations are several times SCOX's remaining assets, and there appears to be prima facie evidence for it's claims.

So my guess is that one way or another SCOX has less - possibly much less - than six months of life left.

Worse than immenent bankruptcy, Novell asserts that SCOX officers made representations and requests of them which essentially admit of prior knowledge that the various subsequent public and in court fiduciary and legal claims were false.  Ralph Yarro and Darl McBride are at real risk of legal prosecution and almost certain finding of guilt if Novell's claims are true and documentation of them becomes part of the legal record.

For these reasons I think Ralph will cave in and settle on very close to any terms IBM will give him which stands a chance of keeping him out of jail.  I think there will be a few days to a couple weeks of behind the scenes negotiation of which we will likely never know anything, then BOOM it's over.

One day soon we'll read a legal notice that SCOX has ceased operations and filed for Chapter 7.  One by one each of the legal cases will post an order of case dismissed by mutual agreement.

One of the first things the SCOX BK trustee will do is read and publish a statement that they can find no evidence that IBM had ever committed any malfeasance or misrepresentation with regard to SCOX in any of its contracts or dealings or any rights to any intellectual property under SCOX control; any statements made by prior management appear to have been made, at best, by misunderstanding or error.    Shortly thereafter Novell will issue a statement which is essentially a quit-claim for any SysV or prior unix code against any GPL (or other F/OSS license) use of such code.

But that'll be it.  We won't learn who fathered BobbySue's baby and whether  Tom and Ellie are doing it and if Tom is still doing Liz.   We won't learn what Sandeep told Darl and what Darl told Sandeep to say.  We won't learn if Ralph has the goods on Darl, or if Bert has the goods or just mutual "friends" with Ralph, or what if anything Ralph knew about Ray.

We won't learn who's quid got quod between MS and Baystar and who was the pro quo at RBC.   We won't learn if Michael Anderer supplied blondes, brunettes or redheads and to whom.   Lots of this will be known and kept via some very interesting depositions in the deep dark safes of IBM of course (largely what Ralphie will agree to for walking out with at least one still loosely attached testicle) but we'll never know.

For us it will just be the announcements.  SCOX has ceased operation... Chapter 7... dismissed by mutual consent.   And that'll be it.   We'll be in agony!

Of course SCOX is a public company and some of the financial details will become quickly known.  It's almost inevitable that SysV contracts and licenses revert back to Novell.  My guess is that the customer channels get thrown to RH to get their sign off on the settlement.

In the coming years some of the interesting inside material will come out.  There will be occasional articles.  It's possible someone not bound by the settlements will write a book detailing some of the noir of the inside of SCO these last two years and possibly some good guesses as to what was going on in the dealings, but very likely anyone with real knowledge of what was really happening will be bound by confidentiality agreements in the settlements.

IF there are criminal charges coming out of this we might see some of the juice coming out as evidence that way, but I have little belief that our "justice" system will go after SCOX ... and I suspect that Yarro IS smart enough to seek a settlement before anything approaching proof of criminal evidence is entered into the court record.  In other words don't hold your breath.

The point of this article of course is that the end of our little soap opera is coming.  Soon.  And as drama it will have it's high point, the cease operation announcement, cause for much celebration all around, but otherwise will be very unsatisfying.

Prepare for disappointment.

------------------------------------

Copyright 2005 by Terrence W. Zellers.

< Over the Vista (9 comments) | Ahhhh!!!!! What's So Hard About This? (13 comments) >
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How the World (of SCOX) Ends | 46 comments (46 topical, 0 editorial, 3 hidden)
Re: How the World (of SCOX) Ends (4.00 / 8) (#4)
by Chris Lingard on Sun Jul 31st, 2005 at 12:08:12 EST
(User Info) http://www.stockwith.co.uk

We have observed at Canopy that Ralph Yarro III will do a deal, as long as he keeps money. He got the SCO shares plus an undisclosed sum. And of course he will be on a huge salary with bonuses.

I think that Ralph Yarro III will do a deal sacrificing his friends; so Darl, Bert, Jeff and Chris will be watching their backs.

No doubt the announcement will be that his incompetent colleagues fed him false information. I doubt that any justice will done. The shares are probably held by investment bankers, so there will be no shareholder action.



Re: How the World (of SCOX) Ends (4.00 / 10) (#6)
by Napoleon Reddress on Sun Jul 31st, 2005 at 12:31:49 EST
(User Info)
I kind of agree the actual end will be disappointing. Mettler has been saying for ages that the logic of it will not permit it to go far enough to give Linux a clean bill of health. But I am not so sure about ending the cases by mutual agreement. Not sure what happens to the cases with bankruptcy, but this seems to have gone so far that the balance of advantage for notSCO parties, I would have thought, is now to plough on, see what turns up and let the court rule. Novell understand that SCO is near its end, but they are asking for discovery on some interesting issues and I can't see anything to induce them to finish by mutual agreement, short of a complete kit inspection of all dirty linen. What has happened is a once in a generation order of magnitude over the top outrage, where I would think the notSCO parties would do better not to end anything by mutual agreement.

Timing is everything here, I sort of think that Novell have calculated that by putting SCO in trust now, they will have it in suspended near death. Bankruptcy administrators would probably have the sole activity of following through on the legal actions and producing discovery on demand. Once notSCO have got to the bottom of it, they will probably have discovery which is worth infinitely more in future cases than a closure of current cases on their terms would be. Only when that happens, can I see the administrators will be cut adrift. The most difficult issue, is keeping the key players in position for long enough.

But I agree, we won't hear most of the juicy bits for a long time. So much so, that I think we should define the end point as ceasing to trade, because there will never be another clear point at which to celebrate
2 legs==4 legs = bad==good

  • Re: How the World (of SCOX) Ends by ColonelZen, 07/31/2005 12:42:32 EST (4.16 / 6)
    • Re: How the World (of SCOX) Ends by Napoleon Reddress, 07/31/2005 13:47:14 EST (3.80 / 5)
      • Re: How the World (of SCOX) Ends by ColonelZen, 07/31/2005 14:01:35 EST (3.80 / 5)
  • Re: How the World (of SCOX) Ends by br3n, 07/31/2005 13:17:34 EST (3.80 / 5)
    • Re: How the World (of SCOX) Ends by AncientBrit, 07/31/2005 14:40:38 EST (3.40 / 5)
  • Y SCOX pull: Novell Springs the trap by ColonelZen, 07/31/2005 13:35:00 EST (3.80 / 5)
Re: How the World (of SCOX) Ends (4.00 / 8) (#14)
by mikey (mikey at badpenguins dot com) on Mon Aug 1st, 2005 at 00:26:03 EST
(User Info) http://www.ip-wars.net
Your speculation is not quite cynical enough for me.  After watching this litigation for a couple of years, I expect more of the same tactics from SCO.

SCO will claim that Novell breached the contract by not transferring the copyrights.  They will say a jury will understand that in order to survive as a business, they need those copyrights, and Novell keeps refusing to transfer them.  It doesn't matter that Novell currently owns the copyrights, SCO will just claim that Novell screwed them.


---
DISCLAIMER:
IANAL, may have no idea what the heck I am talking about, yadda yadda yadda.

Re: How the World (of SCOX) Ends (4.00 / 6) (#16)
by david anderson on Tue Aug 2nd, 2005 at 16:40:16 EST
(User Info) http://squtch.quiet-like-a-panther.org/
While there is certainly a reasonable chance that it will play out the way that you suggest, it just reminds me of how bad everyone's record is when it comes to predicting intermediate steps in every large court case that I have watched.

Just look at all the predictions from GL, lamlaw, and Y!SCOX about all the things that the  court "must do according to the law". Everyone seems to forget that the judges have a lot of discretion when it comes to how things proceed.

About the only thing that I would be willing to predict is that it will become clear that this is the action that DAK has been waiting for. He wants the basic question of copyright ownership settled.

As for the BK, I am not convinced that it is going to happen yet, even if the trust is established. While there is little doubt that they will end up in BK, there are certainly reasons for some people and organizations to extend the time between certain actions and the BK, even if it meant coming up with $30M to put in the trust.

Would any of you be the least bit surprised if some "angel" of a holding company from some caribbean island decided to take SCOX private and try and run out the lawsuits for two more years rather than go into BK in October?

I don't really expect that to happen, but it would not surprise me if it did.

If they do shut down this year, I also expect that there will be some deals made, but I would be quite impressed if they are able to strike all the deals that they want with all the interested parties. It isn't just IBM and Novell that are involved here. AutoZone, Red Hat and the SEC will all be able to get access to all the dirt from the IBM and Novell lawsuits and settlements. Not to mention all those other interested parties that SCOX has created that could file suit.

It will be extremely difficult to be assured of being able to hide everything.

Pessimistic? I don't think so. (3.83 / 6) (#15)
by wonboodoo on Tue Aug 2nd, 2005 at 14:28:39 EST
(User Info)
IANAL, but I can't see it ending so quickly. You think so because Yarro will look for a deal and others think so because they think the judge will automatically put SCO's MSFT & SUNW money in escrow.

For Yarro to seek a deal he has to have done something criminal. Maybe he has but I think there is very little chance that anyone is going to:
a) prosecute it
b) prove it
Even if sordid details come out as a result of SCOXs trials I seriously doubt any criminal prosecution will come out of this. SCOX is a piss-ant company that the general public couldn't care less about. They are no Enron/Worldcom/Anderson. Prosecutors aren't going to waste time on it.

There is no way the judge is going to put SCOX's cash in escrow. The judge will know (SCOX will tell him) that this will put SCOX out of business.  No way that will happen without a jury trial.

So my opinion is that SCOX will just run out of money awaiting the trials as has been predicted. So yes, SCOX will die, and yes you are right a lot of questions will be left unanswered. But calling for this to end in the next few months is way too optimistic. I think others have predicted SCOX to run out of money around 2nd quarter 2006. I tend to agree.

  • Re: Pessimistic? I don't think so. by ColonelZen, 08/03/2005 00:44:43 EST (3.87 / 8)
    • Re: Pessimistic? I don't think so. by wonboodoo, 08/03/2005 11:28:04 EST (4.00 / 9)
      • Re: Pessimistic? I don't think so. by ColonelZen, 08/03/2005 12:25:01 EST (3.71 / 7)
        • Re: Pessimistic? I don't think so. by Sunny, 08/03/2005 15:44:05 EST (3.87 / 8)
          • Re: Pessimistic? I don't think so. by ColonelZen, 08/03/2005 17:37:49 EST (3.83 / 6)
            • Re: Pessimistic? I don't think so. by Sunny, 08/04/2005 02:17:32 EST (3.80 / 5)
        • Re: Pessimistic? I don't think so. by pgk, 08/04/2005 02:50:55 EST (3.83 / 6)
          • Re: Pessimistic? I don't think so. by Napoleon Reddress, 08/04/2005 12:27:54 EST (3.83 / 6)
            • Re: Pessimistic? I don't think so. by pgk, 08/04/2005 13:40:39 EST (3.83 / 6)
              • Re: Pessimistic? I don't think so. by sphealey, 08/04/2005 14:21:45 EST (3.83 / 6)
                • Re: Pessimistic? I don't think so. by pgk, 08/04/2005 14:43:19 EST (3.80 / 5)
                  • Re: Pessimistic? I don't think so. by sphealey, 08/04/2005 14:56:19 EST (3.83 / 6)
                    • Re: Pessimistic? I don't think so. by pgk, 08/04/2005 15:04:33 EST (4.00 / 6)
                    • Re: Pessimistic? I don't think so. by pgk, 08/04/2005 15:01:07 EST (3.80 / 5)
                  • Re: Pessimistic? I don't think so. by ColonelZen, 08/05/2005 18:14:37 EST (3.75 / 4)
                    • Re: Pessimistic? I don't think so. by pgk, 08/06/2005 03:46:45 EST (3.66 / 3)
                      • Re: Pessimistic? I don't think so. by sphealey, 08/06/2005 10:48:21 EST (4.00 / 3)
                        • Re: Pessimistic? I don't think so. by pgk, 08/06/2005 12:31:22 EST (none / 2)
        • Re: Pessimistic? I don't think so. by wonboodoo, 08/03/2005 16:03:06 EST (3.28 / 7)
          • Re: Pessimistic? I don't think so. by ColonelZen, 08/03/2005 17:47:33 EST (3.66 / 6)
            • Re: Pessimistic? I don't think so. by wonboodoo, 08/03/2005 18:14:15 EST (3.60 / 5)
              • Re: Pessimistic? I don't think so. by wonboodoo, 08/03/2005 20:54:40 EST (3.66 / 3)
                • Re: Pessimistic? I don't think so. by ColonelZen, 08/03/2005 21:22:40 EST (4.00 / 4)
                  • Re: Pessimistic? I don't think so. by wonboodoo, 08/04/2005 13:16:44 EST (3.00 / 4)
Somewhat of an example (3.75 / 4) (#17)
by mikey (mikey at badpenguins dot com) on Tue Aug 2nd, 2005 at 17:17:49 EST
(User Info) http://www.ip-wars.net
Here is an example of how long an injunction takes, even when cases have been won.  This is the Research In Motion (blackberry) -v- NTP case.  RIM was found to be infringing the patents owned by NTP (patent hawks).  RIM has continued to sell, and infringe, since 2002.


---
DISCLAIMER:
IANAL, may have no idea what the heck I am talking about, yadda yadda yadda.
Re: How the World (of SCOX) Ends (3.66 / 6) (#11)
by Potential Recruit on Sun Jul 31st, 2005 at 14:00:14 EST
Why would IBM let SCO and their officers off the hook?  What would IBM get out of it?  There's been plenty of times that IBM could have put an end to this, but they haven't.  I don't think IBM will agree to anything with regard to any deal with SCOX - because SCO tried to extort money out of them by lying to the public.

Possibility of shareholder lawsuits (3.50 / 6) (#3)
by sphealey on Sun Jul 31st, 2005 at 11:44:36 EST
(User Info)
Oft talked about, seldom seen...

Your analysis is good and, I think, has about a 75% chance of playing out.  The only caveat I have is that the scenario you describe would certainly result in the termination of TSG (you assume Chapter 7 rather than Chapter 11).  If there are any annoyed shareholders out there who want to make an issue of things, however, they could file suit against the fiduciary parties for breach of duty.  And given the circumstances, such suits might be able to attach personal assets.  So while there is probably an incentive to settle, there is also an incentive to hold out to the last possible minute.

sPh

  • Re: Possibility of shareholder lawsuits by ColonelZen, 07/31/2005 12:10:00 EST (4.00 / 6)
Can't fault the substance (3.40 / 5) (#1)
by AncientBrit on Sun Jul 31st, 2005 at 11:23:11 EST
(User Info)
of your article, Colonel, but you might like to check the following before it goes on the front page:-

?supervillian/supervillain
?competance/competence
?denoument/denouement
?likelyhood/likelihood
?prima facie evidence for it's claims/prima facie evidence for Novell's claims
?immenent/imminent
?stands a chance/stand a chance
?approaching proof of criminal evidence/approaching proof of criminality


  • Re: Can't fault the substance by ColonelZen, 07/31/2005 11:39:00 EST (3.40 / 5)
  • Also, it's/its by Potential Recruit, 08/02/2005 21:51:18 EST (3.00 / 4)
Bye bye spambot (none / 0) (#46)
by Potential Recruit on Tue Nov 28th, 2006 at 10:56:56 EST
This used to be a spambot post that is flooding the site. Due to volume, I had to resort to this while I work to block access by these bots. My apologies - thanks for your patience.

Jeff

How the World (of SCOX) Ends | 46 comments (46 topical, 0 editorial, 3 hidden)
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