back to article SCO files for US bankruptcy protection

SCO Group today filed for bankruptcy protection. With less than $10m cash left to call on, SCO said that Chapter 11 protection and reorganization would protect assets as it addresses, ahem, "potential financial and legal challenges". The move comes after a US judge last month found Novell, not SCO, is the owner of the Unix …

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  1. Anonymous Coward
    Anonymous Coward

    Tragic end

    What a sad way to end. SCO were never a very sexy company but they had some rock solid UNIX in their time. Go to any store and peek in the back and I bet you'll find a couple of dusty old SCO boxes humming away quite happily in between the store detective's stash of porno and last week's discount lines. They also participated in the Community, eg Greg Lehey's work to get the source code to pre V7 UNIX put out in the public domain (a decision they probably regretted when time came to sue). What a pointless way to destroy a company. It would be like NetApp suing Sun over NFS. Oh wait.....

  2. Anonymous Coward
    Anonymous Coward

    It's their own fault

    They shouldn't have gone round claiming copyright infringement and suing everyone to cover their flagging business. Their Unix products were not exactly cheap and were simply not as good when compared with BSD and the versions of Linux around at the time. They released a sort of free evaluation version of SCO (which I have) but installing that was incredibly cumbersome compared with similar products, and that disappeared after a while anyway as their business started to lose focus.

    Instead of trying to get back to doing what they do best and bring out decent software like they used to, they decided to follow the Rodime business model and took unwinnable legal action against anything that had "nix" in the name. I've got no sympathy - they deserve to go under.

  3. yeah, right.

    Tragic? Comical, rather.

    Not tragic, comical. Right to the end they were denying everything Novell was claiming. They denied Novell owned copyrights - they lied. They denied Novell's claims they were close to bankruptcy - they lied. They've been engaging in potentially illegal (to be determined at trial, which is now stayed) dealings in their FUD war against Linux, and this might just give them a "get out of jail free" card.

    SCO has been a crock of shit I.P. troll for the last several years. It was tragic several years ago when they went down that route. Now it's just a well deserved result for a company that lost its way a long time ago. I hope the shareholders (what's left of them) go after Darl and Yarro personally for running the company into the ground, because they've been right royally screwed by that pair.

  4. Daniel Gould

    A shame

    Yes, SCO have made some good products in their time, but they lost their way. It is such a shame that they didn't put the money they wasted on the lawyers into developing products on the back of the growing linux community - a huge wasted opportunity.

  5. Anonymous Coward
    Anonymous Coward

    Self inflicted

    So, after five years we have some rich lawyers and Linux has been examined so thoroughly by so many that it's stronger than ever. And totally unimpeachable as we always knew it was.

    The Chapter 11 would seem to be a final insult to Novell and IBM to deny them recovering costs and what's owed to Novell. Though I expect they knew tSCOg were teetering on the brink and would rather see them buried.

    A sad end to Caldera/tSCOg (not to be confused with the original Santa Cruz Operation). Taken over by people who didn't want to know about Unix and thought it would be a perfect vehicle for operating nothing less than a protection racket. They picked the wrong people.

    Looks like there's a party over at Groklaw...

  6. Tom Silver badge

    Yes, Lawyers do get theirs

    Having been in a company that died in Chapter 7 bankruptcy, I can readly attest that the FIRST priority in handing out the little $$$ that exist at the end are the lawyers. Hopefully the people with real claims will get some benefit from the sale of whatever IP SCO owns. We can also hope that the buyer (hell, I'll bid $.01) will donate the stuff to "public domain" and we will all rest easy at night. Wishful thinking, but sometimes dreams come true.......

  7. Simon Parmenter

    Skill shortage?

    There's a shortage of skilled, talented, and honourable executives and directors going by the evidence of this SCO affair.

    I do feel for the other employees of the company. I wish they could all resign en bloc and find a company that has good leaders. Ah, good and true leadership, does it exist?

    I've just had a peek at the SCO website and particularly the jobs page:

    sco.com/company/jobs/.

    And look at this: sco.com/images/company/SCO_Code_of_Conduct_and_Ethics_Policy-Final.pdf

  8. Andy Enderby

    Title

    My first unix support opportunity was working with SCO for Mitsubishi/Apricot, a time I richly enjoyed. The O/S's on offer were solid, stable, but in terms of support for other than enterprise hardware were starting to look staid and a little old fashioned even by '97 when compared to Sun Solaris, BSD or Linux. By '99 the signs were that new product releases contained less and less genuinely new content compared with previous increments, even for what was a conservative development house. Apricot closed in '99, I Had huge motorcycle accident but contiued watching with interest and growing dismay as software development programs gave way to the suits horse trading and eventually patent trolling. As early as 2002 it seemed they lacked any kind of interest in a sustainable business selling software.

    Respected, profitable unix vendor to patent troll, to knocking at the doors of bankruptcy in 8 years, 7 of which could probably be considered as death throes.... The irony is, that during my time at Apricot they were actively contributing to Linux, and enabling SCO users to run Linux executables with lxrun.

    Shame

  9. ashridah

    New SCO or Old SCO?

    "Yes, SCO have made some good products in their time, but they lost their way."

    Are you possibly thinking of old SCO? Keep in mind that the old SCO, now known as Tarantella, is the original SCO from back in the day. Caldera bought sco's unixware business, and SCO's trademarked name, then rebranded itself back to SCO after Ransom Love dropped out of the equation, THEN went on a litigious spree of self destruction. New-SCO didn't really develop anything particularly special that I can think of.

  10. Alan Donaly

    Bad idea then who knew

    Do I feel sorry for the belligerent dimwits yes a little it doesn't appear they could see that it was a lost cause to begin with like almost everyone else on earth did but thats sad too. I am happy it came out the way it did . I wish that someone in the business world would look at this and a light come on though I know thats a highly unlikely scenario because lawyers lie(to put it mildly) and speculate wildly and they make money doing so but others end up with an empty sack funny how that works it's almost as if lawyers made the laws. Oh wait...

  11. Anonymous Coward
    Anonymous Coward

    SCO got its just deserts

    SCO got exactly what it deserved. It made outrageous assertions, which had they been true, would have been damaging to the reputations (and finances) of a large number of companies that sell systems with UNIX as well as companies that use systems with UNIX. Time after time the court asked for evidence to support SCO’s assertions, and SCO time after time failed to provide that evidence, restated their assertions in court and promised to provide the court with supporting evidence “soon”. And time after time SCO failed to come through on those promises it made in court. Clearly they knew they had no case and were hoping to extort money via settlements from companies that wanted to avoid the hassle of going to court. One can only hope that the courts will go after SCO with criminal charges as well. The integrity of the legal system requires that people who knowingly make false statements to the courts be prosecuted.

  12. D. M

    But they have too much more unpaid bill ...

    SCO deserve it. I only hope not only SCO management, but the lawyers too burn in hell.

    Bring down all the evils - Sony, RIAA, MPAA, M$ ..., all of them.

  13. Daniel Ballado-Torres

    SCO never lost its way

    They only sold SCO Unix and rebranded as Tarantella. The "SCO" that has just died was previously known as Caldera. Which I'd say, did produce Caldera OpenLinux but dissappeared it when it went berserk against IBM/Linux. i wonder if the Tarantella team had second thoughts when Caldera started doing that with what they had sold them... not just because of what they did, but because it spelt ceartain death for SCO Unixware itself. Ow.

    Kind of like leaving your baby to the wolves...

  14. Anonymous Coward
    Anonymous Coward

    Chapter 11 and SCO

    I read with pleasure that some readers have good memories of SCO - in the distant past. So do I. I learnt my ropes with Unix on a AT or Pentium III installing SCO Unix Version about 4.+ with, believe it or not, some 130 floppies. And since I was learning, I did it several times.

    I wonder whether there will be appeals, with no money in the till. Maybe they find a sponsor - with a purpose - like last time - to continue their battle. It will be the battle of the sponsor too, who is in a similar situation, development-wise, as SCO. No new inventions, just patents to milk.

  15. Anonymous Coward
    Anonymous Coward

    Folklore on the "old" SCO , 1996

    SCO Installation process, translated from Russian (original circa 1996).

    You write a letter and send it. And wait for reply. Then you wait more. And more. And more. And more. You become bored. And even more bored. Ok, you make the call and ask your friend to send a letter to you. And wait. Wait more. And more… at last you understand that uuxqt DOES NOT WORK. You make a call to your friend, take a floppy, stroll to him, on your way you buy:

    1. Beer - 1 case

    2. Chips - 2 kilograms

    3. "Camel" – one block

    You reach him, and copy taylor uucp on the floppy, return home, mount the floppy and try to find gzip... and discover none such files... You make a call to your friend, take a floppy, stroll to him, on your way you buy:

    1. Beer - 1 case

    2. Chips - 2 kilograms

    3. "Camel" – one block

    You reach your friend, copy gzip sources, run to home, read the floppy, look for C compiler and discover there none such. You DO NOT make a call to your friend, just take a floppy, stroll to him, on your way you buy:

    1. Beer - 1 case

    2. Chips - 2 kilograms

    3. "Camel" – one block

    You reach your friend, and then go to hell, and after returning from there you install compiler and compile gzip.. there are errors… You look for gcc, and find it, compile

    gcc, compile gzip, unpack the archive, compile tuucp.

    HURRAY! NOW IT WORKS! You write the letter and get the answer, and try to read … er decipher. And understand that 8-th bit is zeroed, write the question to your friend using latin letters, you get the reply and go to hell. You return from there with sendmail, and install it instead of mmdf, you write a letter and send it. And wait for reply. Then you wait more. And more. And more. Then you discover that you are writing from the wrong address. You look for

    libresolv, compile and replace it.

    заменяешь.

    You write a letter and send it. And wait for reply. And wait more. Then you kill the sendmail who has stopped working... You write a letter and send it. And wait for reply. And get it. Now you are launching slip, and finally go to bed. In the morning you find out that slattach hanged, restart slip and find no ping..

    You reboot and start slip. Then you power of an install Ethernet card. Ant configure routing. It does not work, so you delete routed, and download gated, and try to compile it. It does not compile. You write the letter (well, look above for details about it) and receive the compiled gated. Rut it. You find that it has only RIP, and you need OSPF. [censored].You search for gated configs, add there ospf, compile and run…

    After eleventh hang you say that [censored] andl look for EBF,[censored],[censored] and [censored].You find EBF, and comment out the launch of gated. You write the static routing script. And try it. [Censored]. You solder to the RESET button the modem’s DCD signal.

    You ask your provider to switch you to PPP. Provider is very nice and you are suggested to go to hell only first 82 times, and then finally agree.

    You make the dial-up connection and try to make it work in 8-bit mode. [censored]. You download mgetty and compile it. You look for suitable terminal and find nothing.

    You visit your friend, and are sent to hell, and return from there with termcap. You try to launch the user and find him just logged in as the root. [censored]. You download the patch fixing the vulnerability in the login.

    You log in and relax and enjoy. The you find that you cannot logout. You try to shun down the open port and find you can not.[censored]

    You look for SAS, compile it and install it and log in. You delete rlogind and install the patched one. And then delete telnetd. And find no patched one. Then you get the old one from from the distro. [censored]. You look for tcp wrapper, find and compile it. [censored] You fix the vuln in the mountd. [censored] and fix the vuln in nfsiod... [censored] [censored] [censored]

    [...]

    .. you set up INN. It does not compile. So you look for patches and look for patch utility... And patches cannot be applied. Then you look for old INN version, patch and install it. You get the news and enjoy it and [censored], because there are no more free inodes in /var/spool/news.

    You distribute the news to the bunch of partitions. And read the news. Read. And see the question "and I wonder why everybody is saying SCO is a crap". And you reply with full responsibility and knowledge on subject:

    > For SCO you need nothing special, just insert CD, boot floppy, and root floppy, it installs and works fine.

  16. Daniel Snowden

    Finally!

    The flim-flams got what was coming to them.

    Did they honestly think that this trumped up lawsuit would work? I believe Linus Torvalds put it best: "They must be smoking crack!"

  17. BitTwister

    Suicide attempt finally works

    Having continually shot itself in both feet throughout this baseless farce, SCO finally dies from blood loss. The only sad part of all this is that their many debtors are unlikely to get much out of it.

    No flowers, please. There are unlikely to be many mourners.

  18. Geoff

    Old SCO --> Tarantella, now owned by Sun.

    SCO originally Sold the SCO Product to Caldera and rebranded itself as Tarantella around a new product for Application Delivery which was Citrix like but for Unix Platforms, they purchased another product from New Moon to Cover the Windows side of the equation. They branded the products as Secure Desktop for Unix and Secure Desktop Terminal Server Edition, Caldera later rebranded itself as SCO.

    Tarentella was later bought by Sun and the New Moon Product (Secure Desktop - Terminal Server Edition) was licensed to ProPalms, some staff transferred with the Licensing. Propalms still sell the product as ProPalms TSE. Sun rebranded the Unix version as Sun Secure Global Desktop.

  19. Anton Ivanov

    Not so fast everyone, it is 11, not 7

    They are still alive, they are still kicking, they are still deploying lawyers. Chapter 11 will allow them to continue doing so despite the fact that they lost the lawsuit.

    This is simply a method to deny Novell its money while retaining enough money to pay lawyer bills for a couple of more years.

    By the way, I will second the experience of our esteemed Russian collegue about SCO installation. I have been through the same and throughly enjoyed it (pity he did not post the original with the gratuitous "k chertu" i "pshel na..." use).

  20. Mahou Saru

    What if...

    Daryl isn't a greedy troll who tried to make a quick buck from bullying Linux users, what if he is true penguin head willing to sacrifice his company, his reputation, his stockholders resources to strengthen Linux's position? All of the FUD they were selling would now work in reverse and the whole thing has been a big PR coup for Linux.

    Of course his letter to SCO partners and customers saying that the court is wrong, says that the above scenario is not likely to be the case :p

  21. Anonymous Coward
    Anonymous Coward

    Poor old SCO...

    Any time a Unix vendor goes under it's another knock for Unix and Unix clones and another merit mark for Microsoft. In fairness, as a former Solaris admin I always considered Sun's offering superior but it is a shame they're in trouble because it makes the Unix market look that bit more vulnerable. Having said that they did become a rabble looking to weasel-out cash on the back of spurious copyright claims. It's still no time to become complacent though; Novell is not much better in that I think it's still a Linux carpetbagger looking to make money from other peoples' work. Hey, doesn't that remind you of someone else...

  22. Karl Lattimer

    heheheh

    Na Na Nah Na

    Na Na Nah Na

    Hey Hey Hey

    GOOODBYEEEEEE

    Sing it with me :)

  23. Anonymous Coward
    Anonymous Coward

    No profit

    The company now calling itself "The SCO Group" was formerly known as Caldera inc.

    The company has only claimed profit for one single quarter during it's entire existence (regardless of under which name it has appeared). That 'profit' was from Microsoft and Sun licenses. This money has now been shown to belong to Novell.

    Therefore, the article is incorrect in saying that the company dipped into the red. It started in the red, it lived in the red, and it will die in the red.

  24. Simon Greenwood

    Re: Folklore on the "old" SCO , 1996

    Funnily enough I had similar fun with SCO a couple of years later. Company wants SCO Unix as a mail server supporting multiple domains and user mailboxes. Install SCO Unix on chunky Compaq. Try and work out how to do it with the version of sendmail in the box. Find that it's basically impossible. Try and disconnect sendmail from SAM so that the M4 macros don't get overwritten. Call SCO tech support. Be told to have credit card number ready. Insist that it's an installation problem. Be told to have credit card number ready. Persuade client to bin SCO for RedHat.

  25. Dam

    And in the meantime on their website...

    Anyone able to find the 2007 press release about them getting raped?

    Surprisingly enough, they stopped at the 2006 releases :p

  26. Anonymous Coward
    Anonymous Coward

    SCO, RIAA, Microsoft?

    OK, SCO has gotten it's arse smacked. Are we seeing a change in the way the world does business? Will the evil empires crumble? What next? Hordes of downloaders take the RIAA/MPAA to court for harassment and win? M$, already smitten by the EU, lose it big time - maybe Vista sales dwindle, M$ resorts to stupid IP litigation in order to recover their status? Don't bet against it. Google: be very careful...

  27. Anonymous Coward
    Anonymous Coward

    Good coverage, except...

    SCOX (neé Caldera) have *never* been profitable year-on-year, except for the period covering the disputed 25M. The judge has already ruled that an amount of that 25M (which could, according to the contracts with Novell, be up to 95%, plus, of course, damages) belongs to Novell, and has been subject to "conversion", which basically amounts to keeping as yours something which belongs to somebody else. If you or I did this, it would be known as "theft".

    Whatever happens, SCOX will be obliged to revisit their 10K and 10Q filings, probbably back as far as 2003/4, and at that point, the truth will be out - they have *never* made money.

    The one sad thing that came from this is not really the "loss" of unixware or openserver, two technologically geriatric systems, but rather the loss of Caldera Linux, it's merger with "actual Unix" and the use of the existing SCO Unix sales channel to forward this product, which then-CEO Ransome Love wanted to carry out - this was the original stated purpose of Caldera buying the rights from SCO (now Tarantella, and merged into SUN).

  28. James Pickett

    What a shame..

    ..oh well, never mind.

    "SCO offered Boies and Co. a 20 per cent stake as payment "

    The fact that this was turned down suggests that B&C knew a sinking ship when they saw one and (like all sensible rats) made haste for the shore.

    So, do those who were daft enough to pay SCO a 'licence' for Linux now get their money back? That's a rhetorical question, BTW.

  29. Luke Wells

    At Last!

    Thank god that SCO is nearly over and done with.

    Hopefully this will be a lesson for other companies. You can't make your fortune by setting up / buying a company just to use to try and sue people on IP, you need to actually offer good products / services and work hard at it.

    No what will happen to the companies that were STUPID enough to pay money to SCO when they received threatening letters saying they were illegally using linux? I hope they feel like complete IDIOTS now for believing them and forking over the cash.

  30. Giles Jones Gold badge

    Linux

    They could have gone into Linux and made a fast buck, but this would have required the ability to compete.

    SCO have proved they didn't want to compete, just litigate and syphon off cash from others.

  31. D. M

    @Anton Ivanov

    What do you mean? I'm not from states. Do you mean US laws are not only bad, but it is so corrupted, that allows bankrupted company to continue abuse the law (if there is any), and blackmail people around?

  32. Jonathan Richards

    @ D.M. - Chapter 11 is protection; chapter 7 is liquidation

    Chapter 11 bankruptcy protects a corporation from its creditors in order that it can get its business back into shape. SCO hopes to go on trading. The court cases are, at the moment, automatically suspended.

  33. Pascal Monett Silver badge

    "US laws . . .allows bankrupted company to continue abuse the law"

    Well, now that you mention it, yes.

  34. Anonymous Coward
    Anonymous Coward

    Re: Linux

    Giles Jones says:

    "They could have gone into Linux and made a fast buck, but this would have required the ability to compete."

    The company that was Caldera, and is now The SCO Group, Inc., *was* into Linux. They had a fairly well respected distro, and the then-CEO was interested in the prospects of merging Unix™ with Linux to produce a real killer app, then using the existing retail channel to push it hard. Caldera *could* have been a real killer in the market, the new RedHat.

    That would have been hard to do, though, so, instead, they got Darl McBride and Ralph Yarro and their plan to "monetise" the "Unix IP", despite being told up front by their own people that they didn't actually own it, found a nice compliant bunch of lawyers who were initially up for a cut of the projected "big win" from IBM, and started throwing lawsuits around. Suicide by federal court.

    What's now looking increasingly likely is a filing from Novell asking for the chapter 11 filing to be rejected - Novell, despite being owed potentially much more than SCOX is currently worth, are not currently listed as a creditor in the BK request.

    SCOX have just thrown another 450K away in lawyers fees preparing the BK filing itself, another half a mill that Novell won't see. Worst case scenario for SCOX (and one which has precedent), is that the BK court not only reject the chapter 11 filing, but also ban SCOX from filing for BK again, either chapter 11 or chapter 7, basically leaving the current BoD hanging out to dry.

    In other news, SCOX are looking for accountants, and have asked for permission to employ temps during chapter 11 - most of their accountancy staff (including 2 senior staff) have either resigned or been "terminated" as a part of / subsequent to the BK filing process.

  35. Eric Dennis

    A fitting end to the SCO nonsense

    Ah.. .what a fitting end to this nonsense. How many individuals and companies have waited for this circus to finally bite the dust. We can all finally get back to using and loving Unix and Linux!! LOL!!!!

  36. James Pickett

    I wonder..

    ..when/where Darl McBride will re-surface? If there was any natural justice, he would be unemployable.

    His future CV will be an interesting work of fiction, no doubt.

  37. Anonymous Coward
    Anonymous Coward

    follow the money

    I'd assume that a company is being paid for what it does.

    So if what it does doesn't seem to generate income the benefits are coming in some other form.

    And if the benefits don't show in one set of accounts, they should be sought in other sets of accounts.

  38. Andy Crofts

    Damn. Wanted to download...

    ...some SCO Brownware, couldn't even do it from SCOX(E/PK) site.

    Shite Happens...

    -Andy

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