SCO News Roundup

SCO's been officially expelled from NASDAQ, effective today. Finally. They first received the delisting letter way back in September when they filed Chapter 11, and since then it's been months of pointless appeals and procedural gamesmanship. That's finally come to an end now.

This doesn't mean the monster's finally dead, of course. They're still limping along in BK court, and there's the upcoming Novell trial (if SCO can hold out that long), and even the stock still exists in a somewhat less reputable form, assuming they switch to trading OTC after this. The venerable Yahoo SCOX board, however, may vanish in the near future. It's been sort of a nature preserve for trolls and those who feed them for quite a while now, so I can't say I'll be too broken up when it goes away. A few years ago I'd have been glum about it, but now I just think "good riddance".

In any event, Happy Holidays!

Ok, I've fallen a little behind on my SCO-watching duties again. The last few weeks haven't been hugely eventful, but a few things have transpired in the last few days. And for the sake of completeness, I ought to at least mention a couple of earlier items I ought to have written about when they happened, and just sort of didn't.

[It came to my attention that I originally dated this thing 11/20 instead of 12/20. I really did get rusty at this stuff. Sheesh.]

• SCO wants permission to renew their leases in Utah & New Jersey. And in Utah, they want to keep renting from Canopy, no less. Sure is funny how they managed to ask at basically the last possible moment, like they always do. It may seem unfair, and it may seem like they're railroading the BK court, but I think they'll get this one. Since they're in Chapter 11, the court's not likely to force them out of business over the cost of a lease, while they're allegedly still trying to reorganize and get back on their feet, or tentacles, or whatever. Besides, at the rate they're burning Novell's money on lawyers and cushy bonuses and such, they'll have to switch over to Chapter 7 before too much longer. Speaking of which...
  
• They also want permission to hand out bigger bonuses than the BK court approved earlier. Seems it's becoming more and more difficult to keep employees from jumping ship, and the previously-approved caps are no longer sufficient to buy (or at least rent) the loyalty of key personnel. Which may be the absolute, unvarnished truth, come to think of it. On the other hand, I don't see how cranking up the burn rate helps SCO avoid cratering. They just want to pay current employees more to do their existing jobs. Current employees doing their existing jobs is what got SCO where it is today.
  
• The ever-relentless Panglozz has tracked down the CP80 Foundation's recent nonprofit IRS filings, and they look a bit on the peculiar side to say the least. I'm no tax attorney or anything, but the numbers just don't seem to pencil out. Trying to explain the situation is beyond me -- go check it out for yourself if you're curious.
  
• Sandeep Gupta is out as head of SCO Operations. He only just got the big promotion a couple of months ago, post-BK. I wonder what that was all about? I wonder if we'll ever find out? In any case, Jeff Hunsaker is the new Sandeep Gupta, except that he comes from a sales background rather than a technical one. Oh well, it's not like SCO needs technical folks anymore. Hunsaker, you might recall, oversaw a series of SCO's market triumphs, starting with Caldera Linux, then moving on to SCO's Unix OSes, and finally to Me Inc. So he's got to be the sort of guy who doesn't let bad news get him down. That ought to come in handy in his new job.
  
• More important than any of this is last Thursday's joint statement by SCO & Novell, in which they offered Kimball several proposed trial dates. So SCO v. Novell could go to trial as early as January 11th, less than a month from now. And less than two months before the 5th anniversary of SCO suing IBM, for those of us who keep track of such things. One interesting bit is that SCO proposed a date in April that'd conflict with the still-scheduled arbitration in Switzerland. Novell didn't go along, hinting that they might try to get the BK court's stay lifted on that matter too. That ought to be fun.
  
  While the Novell trial is eagerly awaited by all, there are really only two items there's any suspense about. First, the exact dollar value SCO owes to Novell. Second, exactly how soon afterward we'll see the inevitable MOG article proclaiming SCO the winner.
  
• A recent Blankenhorn piece: "SCO bankruptcy was celebrated online in 2007", in which he compares SCO to notorious cartoon villain Boris Badenov, of Boris & Natasha fame. He concludes with: "In what may be the final humiliation for SCO, Groklaw’s recent posts have generally moved on to discussing Microsoft and OOXML." And yes, that's got to be a bit humiliating. Around the time SCO filed BK, Darl said something about how happy Linus Torvalds and Sam Palmisano would be about SCO's difficulties. In reality I suspect neither guy has spent much time thinking about SCO at all, in the last couple of years. Now PJ's starting to move on too. At least they've still got me to kick them around, for whatever that's worth. I mean, this blog has "SCO" in the title, it's not like I can just switch gears and start ranting full time about M$ Exchange or Vista or whatever. I probably ought to have thought of that before I began this thing. Oh, well. I've said before that the "SCO" in the title really means "Stuff i Care abOut". Meanwhile, SNR could be "Signal to Noise Ratio", "SuperNova Remnant", or (my #1 choice) "Snr: Not Recursive". I'm not sure I've convinced anyone yet, but I can keep on hoping, I guess.
  
• Oh, and I, uh, got it all wrong about the December 5th hearing, as you might've noticed. Looks like the Cattleback deal's going through after all, and the mysterious buyer is an entity called "BlackMaple". I hope we're not witnessing the birth of a nasty new patent troll. In any case, SCO gets another ~$500k to pay back Novell with. Unless they spend it all on lawyers and such first.
  

So the next SCO BK hearing is tomorrow, and the one issue of substance on the agenda is the Cattleback patent deal. Although I don't think it's hugely important in the larger scheme of things, it's quickly becoming one of the more bizarre episodes we've seen during the long, sordid SCO saga. Let's recap, shall we?

1. SCO declares BK, and the filings briefly mention a new subsidiary, Cattleback Intellectual Property Holdings.
   
2. SCO files an oddly named motion asking the BK court to approve the Cattleback patent sale, despite providing almost no details, not even the name of the buyer. Most people had forgotten SCO even owned any patents, since they'd never managed to go trolling with them. (Or use them in real live products. That's pretty much a given with SCO.) It wasn't clear what the deal meant, but all that furious handwaving looked awfully suspicious.
   
3. Time passed, and other matters occupied the limelight for a while. Once SCO v. Novell was back in business, Novell filed objections to the deal. Ouch!
   
4. Another objection was filed by a previously unknown firm calling itself the "363 group", which showed up out of the blue and offered to buy the patent (or patents, plural, as they worded it) for a ~17% premium over what the original super-secret buyer agreed to pay. Ok, technically 363 didn't show up completely out of the blue. Turns out they're a division of Ocean Tomo, the firm that brokered the original patent deal. WTF!? SCO and Cattleback (its zero-asset, zero-employee subsidiary) pretend they're about to sue each other over a deal between Cattleback and Ocean Tomo. And then when the two mortal adversaries propose an amicable settlement and a hearty round of large cash bonuses, who shows up and objects but another arm of Ocean Tomo.
   
5. Oh, and the US Trustee filed an objection too. I gather that's never a good sign if you want your deal approved.
   
6. So on Monday they finalized the agenda for Wednesday's hearing, and poof, 363's gone again. If they ever hand out an award for briefest cameo in the SCO soap opera, they'll at least be one of the nominees. A little too much public scrutiny, perhaps? Didn't realize they were bidding against their own client? Mindboggling.
   
7. But not so mindboggling as the latest bit. Turns out the ultra-mysterious buyer is a client of the same law firm Novell's been employing in all matters SCO. So presumably Novell's lawyers know who the buyer is, although I gather they can't share that info with Novell
   

At some point, you just have to stop connecting the dots and hum a few bars of "Duelling Banjos".

One of the things you learn watching SCO is to never ascribe to malice or stupidity what you can ascribe to malice and stupidity. I suspect there's more to the recent WTF moments than we know yet. I suspect there's a plan, or at least a scheme, behind at least most of what we're seeing. That tends to be the case with SCO, it's just that it's never a very good plan. Often an intricate plan, vehemently argued (see "methods and concepts", APA hairsplitting, etc.), but always a stupid plan in the end. Strictly "12 Dimensional Chess for Dummies" type stuff. So right now I expect to see SCO scream bloody murder about the potential conflict of interest thing and try to get Novell's lawyers thrown off the case. I also expect this scheme won't work, and (as usual) they'll be dumbfounded that it didn't.

Further, I don't see the court going along with the Cattleback sale. I figured there would be objections from various parties wanting more info about the deal. SCO could satisfy those objections by explaining the deal a bit better, but so far they haven't done so. There's still time, and we may yet see them dump another pile of documents on the court an hour before the hearing. Or the court will give them a deadline to comply and fess up, which they'll do -- sort of -- exactly two minutes before the deadline. Assuming the court's still willing to cut them slack, that is, and that may not be a wise assumption after the York shenanigans.

I actually don't care that much about the Cattleback deal other than for the entertainment value. It's strictly a sideshow, almost entirely unrelated to the issues in the IBM & Novell cases. The very fact that people are arguing over it now means that they're successfully delaying the BK case, avoiding pesky details like forming a creditors committee and submitting a realistic reorg plan. They are, however, showing their true colors very early, so that they're likely to be viewed with a great deal of skepticism once it's finally time to deal with the meat of the BK case. All that trouble, all that lost credibility, all those burned bridges, all over a lousy $500k. Smooth move there, guys.

I think SCO's run into a common pitfall among bankrupt companies. If you declare BK, your fate's in the hands of a court that specializes in people just like you, and a US Trustee, and creditors' attorneys who do the same. And they've seen it all before, every last trick in the book. Even if you are as smart and clever and creative as you think you are, they've still seen it all before.