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SCO says it?s on thin ice

by on19 September 2007

Cites financial liabilities as cause

We reported that the SCO Group had filed for Chapter 11 reorganization under U.S. federal bankruptcy protection.  SCO group announced in its recent quarterly report filed with the U.S. Securities & Exchange Commission that there is “substantial doubt” about the company’s ability to survive and continue on with its business.

SCO cited limited cash reserves and huge legal liabilities incurred as a result of its recent rounds of litigation with IBM.  The recent court ruling against SCO in favor of Novell as owner of certain Unix patents and for past SCO licensing deals with Microsoft and Sun Microsystems will likely cost SCO more than $30 million. 

While SCO has sought reorganization relief and protection from creditors under bankruptcy laws, its cash reserves are indicated at less than $11 million, according to its latest SEC filing.

Critics of SCO were not sympathetic to its plight and indicated that SCO should not have so aggressively pursued IBM with its Unix open-source violation claim. Rather than attempting to settle with SCO, IBM fought back and the Judge ruled against SCO on ownership of Unix. 

Most legal analysts believe this ruling has gutted SCO’s basic claim against IBM for Unix intellectual property infringement. The IBM case is not scheduled for trial until later in 2008.

Last modified on 19 September 2007
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