Sunday, November 23, 2008


11/23 SNR: "Final" Judgment

So, finally, we have a final judgment in the SCO v. Novell case. No big surprises here: SCO owes money it doesn't have, a bunch of their claims are gone for good, with prejudice, etcetera. The one thing that surprised me was how long it took to get to this point. The trial, after all, was early this year, and Kimball ruled back in July, and then the case entered into a sort of post-trial limbo, with Novell holding off on the final judgment until SCO caved and dismissed much of what remained of their case. That seems to have been a clever move on Novell's part, and one that nobody anticipated, least of all SCO. All this time they've been promising the world that they've got a sure-fire guaranteed victory on appeal, just as soon as the chance to appeal arises, but they just burned through another quarter of dwindling cash that they couldn't have planned on. And with all the dismissed claims, the odds of the big payday they keep promising have gotten even more remote, if such a thing is possible.

Speaking of appeals, I'm having trouble referring to this as a final judgment. Every time I try typing it, my fingers leave the keyboard and start making little air quotes. It's final in a legal sense, technically, in that the proceedings in front of Kimball are done, but I don't see how SCO can not appeal, after pinning all their hopes on it for the last few years. I don't see what their grounds for an appeal would be, but that's never stopped them before. So, in short, it's not over yet. Then there's that little matter of the bankruptcy case, and nonzero odds of the IBM and Autozone cases coming back to life at some point, sooner or later.

So the question is, what does "final" really look like, as far as SCO's concerned? At what point can PJ break out the red dress, and the rest of us can break out a nice single malt, or Bordeaux, or whatever? I'm increasingly unsure there'll be one big event signifying "The End", unfortunately. I do see a few probable semi-milestones ahead, although I'm not going to guess dates or even an order for them. The one I'm really looking forward to is when they finally run out of cash, and have to lay off their remaining employees and cease operations. That won't stop the lawsuits, unfortunately -- SCO could, in theory, continue on for years to come as a legal entity, with nothing but a P.O. box to its name. BS&F, as you may recall, is obligated to keep fighting for SCO in the various SCO v. Universe suits without getting a cent more for their trouble. If whoever's in charge of SCO wants to keep this going for another 25 years, BS&F has to keep plugging along at it, to the bitter end and beyond.

Also on the financial side of things, there's converting from Chapter 11 to Chapter 7 bankruptcy, where the goal changes from reorganization to liquidation. In other words, shutting everything down and selling off the company's remaining assets, using the proceeds to pay off creditors. This would be quite a milestone, but it's not the end either. Far from it, actually. To liquidate a company's assets, you first need to know exactly what the company does and doesn't own. That's been the core issue in the SCO saga since it began, and before that in the old AT&T vs BSD conflict. The Novell case sorted much of that out, but I doubt that all possible questions of title are now resolved. Really, I think Chapter 11 would be a much faster process for SCO than Chapter 7, if they had any realistic chance of reorganizing and becoming viable again. Which they don't.

Another possible milestone is the BK trustee booting out current SCO management, or what's left of it. This may or may not happen, but it'd certainly be party-worthy if it did. Just imagine, no more Darl or Ralphie to kick around. It's a nice thought, isn't it?

On the legal side, it's harder to see a rapid end to the shenanigans. They'll go to Denver and appeal and beg for a do-over, for starters. The court isn't obligated to hear their appeal, and they won't if there aren't convincing grounds for them to do so. There's no automatic second bite at the apple here. If that happens, I don't see how SCO goes forward from there. But I'm not going to bet on that. Let's assume that when they go to Denver and show up in front of a fresh set of judges, they sound just credible enough that the court agrees to hear the appeal. From that point, it could take years. Probably not another 5-and-change years, but years, almost certainly.

And as I mentioned, there are still a few court cases out there in suspended animation that may yet get revived. There was some action in the AutoZone case recently that I still don't understand. I think is that the court's stay expires around the end of this year, so it could conceivably go forward after that, although that would likely require the BK court's OK too. The IBM case is technically "closed" at this point but could still be reopened. And let's not forget the Red Hat case in Delaware. The key thing with all of these cases is that there's no upside for SCO in any of them going forward. Their remaining claims against IBM and AutoZone are waived, per the Novell judgment, so there are only counterclaims to resolve (I don't recall whether AutoZone filed any counterclaims, but I suppose they still could if the case proceeds.) And I don't think they'd have grounds for non-laughable counterclaims in the Red Hat case. So if any of these cases go forward, they will at the behest of the other companies involved, with SCO kicking and screaming and begging for delay the whole time. That, again, could take years.

I don't want to sound like I'm just throwing a big wet blanket over the latest events, and really I'm not trying to do that. I just think a note of caution is in order. Believe me, I'd love it if this was really over -- perhaps you've noticed I haven't posted here since July. I'm rather tired and bored of the whole thing, I have to admit. And none of the semi-milestones I see ahead seem to offer much chance to become unbored, barring a highly unexpected reversal in court, a sudden huge influx of cash, or some other surprising twist. Barring the improbable, the future means chronicling the ongoing asymptotic decline of SCO. It's not anywhere near as exciting as it once was, but I feel like I really shouldn't give up on it entirely. So, although I can't promise daily, or even weekly posts here, I'll try to see what I can do.

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