Wednesday, July 16, 2008

 

7/18 SNR: SCO owes $2,547,817 (plus interest)

So we finally have a ruling from Judge Kimball. SCO owes Novell precisely $2,547,817, plus interest. That's not as much money as I (and I think most people) were hoping for, but hey. SCO doesn't have a lot of cash on hand anymore. Too much over $2.5M and the exact amount awarded becomes an academic exercise. A $2.5M award two or three years ago would've been serious bad news. Now, not so much.

PJ suggests the ruling was designed to discourage SCO appeals, which is an interesting notion. She doesn't elaborate, but I think I see what she's getting at. It's possible Kimball is indulging in a bit of game theory here. They can either take the current deal, fork over the $2.5M, and have Kimball's rulings stand as the final judgment in the case, or they can appeal and see what's behind door #2. It could be a better deal, but it could also be much, much worse. If he'd awarded Novell, say, $25M, there's zero chance SCO would fork over a cent voluntarily. They'd be on the next plane to Denver to file an appeal, because they'd have nothing to lose by doing so. Now, they'll have to think it over a bit more. In the end I think they'll still try to appeal, because they're a bunch of freakin' morons who won't listen to common sense, take their half-a-loaf (or pathetic-smidgen-of-a-loaf really) and go the hell away already. But it does up the odds that the appeals court will take one look at the case and decide SCO is exactly as I've just described them. $2.5M is also an amount Novell can reasonably ask the BK court to hand over, where a request for $25M probably wouldn't get a hearing.

As I've said before on numerous occasions, I don't actually care whether Novell gets a cent back from SCO, just so long as SCO doesn't have the money anymore. If it all gets spent on lawyers and accountants and various BK hangers-on, that's fine with me. The moment Novell cozied up to Microsoft, I ceased to concern myself about their continued well-being. I'm sure their new friends in Redmond will take good care of them. Or not. My main concern has always been the claims and counterclaims in the IBM case (remember the IBM case?), and putting SCO's silly Linux accusations to bed permanently. If today's ruling means SCO lives long enough to properly lose the IBM case, I'd call it a good thing.

The main downside of today's ruling is that SCO and its few remaining friends and allies (i.e. MOG) will spin it as a glorious victory. Which will inevitably suck in a new crop of clueless daytrading bagholders, create a temporary stock bubble, and allow the current bagholders to unload their shares at somewhat less of a loss. I think that's pretty much inevitable, and I can't muster a great deal of sympathy for people who rush in to buy stocks ending in ".PK" without doing any research. As far as I'm concerned Darl and friends can shill this ruling to high heaven, for all the good it'll do them. They still owe $2.5M they may or may not have at this point, and even if they do have the cash on hand they're still losing money and customers at an astonishing rate, and there's still the IBM case looming on the horizon.

Today's ruling breaks the long logjam that prevented various other matters from moving forward. So from here I think things proceed along a few tracks, possibly in parallel. Regarding a SCO appeal, I think we'll see an attempt in short order. I've heard conflicting things about whether they'll need the BK court's approval to mount an appeal or not. Even if it doesn't, the center of excitement will now move back to Delaware. The pending ruling was SCO's excuse for not filing a new reorg plan with the BK court. Now they'll need to either come up with a new plan, or a new excuse. And as for the IBM case, I don't see any compelling reason the BK court ought to leave it stayed at this point, if IBM asks to have the stay lifted.

Overall sentiment: "Yay!" Although without all-caps and with a single exlamation point. It's not an absolutely crushing victory, but I'll take it.

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