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The Day After & Motion to Intervene Denied as "Wholly Inappropriate" - updated
Thursday, July 17 2008 @ 01:40 PM EDT

The media is beginning to cover the Order in the SCO v. Novell trial. Here's a sampling:
  • Information Week: "In a decision Wednesday, Utah District Court Judge Dale Kimball, who had previously ruled that Novell, and not SCO, owns the rights to Unix, found that SCO improperly collected Unix royalties that rightfully belonged to Novell. Kimball ordered SCO to pay Novell $2.5 million in restitution....SCO may have gotten off lightly...."
  • The Inquirer: "However, Judge Kimball's ruling granted Novell only a fraction of the amount it sought at trial, which was more than $20 million. He accepted SCO's argument that its licence deal with Microsoft and its SCOsource licence sales were primarily about Unixware, although those necessarily implicated SVRX licences as well."

Remember when SCO began its media blitz? Stories everywhere. The world thought it was exciting to imagine Linux on the ropes. Now, when SCO is told it behaved improperly and must pay millions, only a few even note it. No one cares about SCO in failure, except for some who feel disgust, like Matt Asay.

What a strange ride it's been. You'd think the folks that wrote all those stories about SCO eating Linux's lunch would at least place a notice on their Corrections Page: "Um. About that lunch stuff, we were totally duped by SCO. They haven't won anything. The best they can do is not lose as big as they could have."

Wait. Hold the presses. Todd Weiss reports the SCO loss as a loss in an article titled SCO loses another round in Unix fight, must pay $2.55M to Novell in ComputerWorld:

At the beginning of its massive legal fight against Linux in 2003, The SCO Group Inc. imagined a day when companies like IBM, Novell Inc. and others would pay it large amounts of cash for alleged infringements on SCO-owned Unix code.

Instead, even as those legal fights meander through U.S. courts, the tables were turned and SCO yesterday was ordered to pay $2.55 million to Novell for collecting Unix licensing revenue from Sun Microsystems Inc. that it wasn't entitled to collect.

That is what just happened. The company that told the world they couldn't wait for their day in court got it, and they lost. And there's more to come.

Anyway, we're still here, and we're not going anywhere. I know SCO is not over yet. Don't forget, the Novell litigation was a sideshow. Covering SCO is a marathon, not a sprint. The main event is IBM, still to come. And I expect SCO to have to pay through the nose to them for what turned out to be frivolous litigation, since the Order yesterday said that SCO has made no claims about UnixWare against IBM, and it doesn't own the copyrights to what it did sue IBM over.

I see everyone notices SCO got off light, and no word yet from Novell.

I think they have to appeal, frankly, if they can find a way. Otherwise, SCO will sell the litigation rights to whoever was really behind this, or a surrogate, and off we go again. But it's their decision. SCO will try to be bad no matter what anyone does. So, at this point, they have to figure out what is worth doing. If SCO pays Novell, they are pretty much wiped out of cash, from my calculations, unless some PIPE Fairy showers them with more. I think a rational question would be, though, why would anyone wish to loan money to a company that was just ruled guilty of conversion of Novell's money? Maybe a buyout by a true believer with a gambling problem.

I don't believe it's true that UnixWare was what SCOsource was primarily about. I don't know about the Microsoft deal, because we are not allowed to read it. But I followed SCOsource closely, and UnixWare was involved at the beginning, but no one bought that first SCOsource offering. That was even brought out at trial. Statements to the media by SCO were that it was about UNIX System V. It shifted fairly early, and that's when they filed for the copyrights, all of which but one were for System V, not UnixWare. That fact alone tells me they are not identical, nor were they in SCO's mind at the time, so I think it can hardly be argued that SVRX was incidental to SCOsource or that UnixWare is just the latest version of UNIX System V. If it were, you wouldn't need separate copyrights. However, the order on that point was complex, so I'm guessing Novell is analyzing closely what they can and can't do about it.

[Update: I thought this was funny, from eWeek:

Both parties may be able to appeal the decision, suggesting that the long, overdrawn case could continue to hobble along even longer than it already has. To quote Steven Vaughan-Nichols, "Like the 11th chapter of a bad horror movie, the SCO zombie keeps stumbling forward moaning "Linux," instead of "brains."

But someone sent me Maureen O'Gara's latest, a very hilarious snip. She of course is warning that Linux end users are at risk, because SCO can now sue them for infringing UnixWare. Heh heh. Folks, they could have sued for post-APA UnixWare five years ago. In fact, that is part of what SCOsource was allegedly about. Remember? That's the story. So it's nothing new that SCO can sue over UnixWare. And yet, they never did. If you look at the IBM case, not one line of infringed code from UnixWare was listed by SCO. Would that be for a reason? Like there isn't any? You think?

Seriously. If SCO had any claims like that, they could have brought them long ago, half a decade ago, literally. The fact that they didn't speaks volumes.

That's not to say they won't try. Winning doesn't seem to matter to SCO, just suing. And the whole world will know they dug it up from the bottom of the barrel, after all else failed. It is a little hard to avoid the distinct impression of trying to destroy Linux, as opposed to any valid claim of infringement. - end update.]

There was another order, about the motion to intervene:

541 - Filed: 07/15/2008
Entered: 07/16/2008
Order on Motion for Miscellaneous Relief
Docket Text: ORDER denying [540] Motion to Intervene and Reconsideration or Clarification. Signed by Judge Dale A. Kimball on 7/15/08. (jwt)

That took only five days. This way the parties don't have to spend money to oppose. Some of you were asking if they would have to do that, and here is your answer: no. The judge can rule on a motion without having to wait to hear from the parties, and he just did. Here it is as text.











Civil Case No. 2:04CV139DAK


Jonathan Lee Richins, a federal prisoner at FCI Williamsburg, filed a pro se Motion to Intervene As Plaintiff under Federal Rule of Civil Procedure 24(a) and a Motion for Reconsideration or Clarification en banc. Rule 24(a) requires a court to permit anyone to intervene who “is given an unconditional right to intervene by a federal statute; or . . . claims and interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.” Fed. R. Civ. P. 24(b).

Riches does not cite to any statute, federal or otherwise, that gives him an unconditional right to intervene. In addition, Riches does not assert an actual interest in the case. Riches claims to have an interest in “the UnixWare software and defendants [sic] refusing Royalty payments.” To the extent that he has such an interest, it is clearly not relevant to or impacted by the dispute between SCO and Novell. There is no issue in this case with respect to Novell refusing royalty payments to individuals. At most, Riches claims to have information that pertains to the case. This does not provide a basis for intervention in the case. Riches would similarly not be entitled to permissive intervention in this case as none of his allegations have anything in common with the questions of law or fact pertaining to this case.

The court concludes that the motion to intervene is wholly inappropriate and it is DENIED. Riches’ Motion for Reconsideration is also DENIED as it is moot.

DATED this 15th day of July, 2008.


United States District Judge


The Day After & Motion to Intervene Denied as "Wholly Inappropriate" - updated | 276 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Oh, well.
Authored by: Anonymous on Thursday, July 17 2008 @ 01:41 PM EDT
Microsoft marketing is no doubt working hard on their next move.

[ Reply to This | # ]

Off Topic
Authored by: RLP on Thursday, July 17 2008 @ 01:44 PM EDT
Of which there will be many I bet.

[ Reply to This | # ]

Corrections here
Authored by: RLP on Thursday, July 17 2008 @ 01:45 PM EDT
What? Us mess up?

[ Reply to This | # ]

News Picks
Authored by: RLP on Thursday, July 17 2008 @ 01:47 PM EDT
Also nit picks, nose picks, guitar picks, etc.

[ Reply to This | # ]

Pro se litigants
Authored by: Anonymous on Thursday, July 17 2008 @ 02:57 PM EDT
He who serves as his attorney has a fool for a client.

[ Reply to This | # ]

Isn't SVRX == "System V" Release X?...
Authored by: Anonymous on Thursday, July 17 2008 @ 03:35 PM EDT
And if so, hasn't Kimball erred in his determination that SCO Source was about
System V but not SVRX?

[ Reply to This | # ]

MOG's article on the ruling is up
Authored by: TAZ6416 on Thursday, July 17 2008 @ 03:37 PM EDT
I'm not goung to link to her article here as she wants the ad revenue and
because of her behaviour when she tried to track down PJ.

However, while I am not a lawyer or journalist I would just like to say it's the
biggest load of cobblers I have ever read and I have read a few of her

The basic lies:

$2.5 million is nothing to SCO
SCOsource is back on and lawsuits will start again for billions
SUN gets away scot free and OpenSolarus is safe


[ Reply to This | # ]

"I see everyone notices SCO got off light,"
Authored by: Anonymous on Thursday, July 17 2008 @ 04:33 PM EDT
This is truly disappointing. How many think sco got off easy? I think they
did. Novell should appeal for sure. This is about money and they didn't get
close to the amount they wanted. I would say Novell read the MS agreement and
they knew what it was. That money is theirs. Its a shame they have to fight so
hard to get it.

[ Reply to This | # ]

SUN is the big loser in this..
Authored by: Anonymous on Thursday, July 17 2008 @ 04:55 PM EDT
It seems to me that SUN is the big loser in this..

They open-sourced code that they did not really have the right to..

One might assume that there are now discussions going on between Novel and SUN
about SUN paying for a new license.
If those fall through then Novel may well sue.

Judge Kimball ruled that SCO lacked the right to enter into the SUN agreement in
regard to the "right" to open-source the code. He also ruled that SCO
owed Novel the $2.5+ million. The two aspects are not mutually exclusive..

I imagine it was well out of the scope of this trial for him to dispose of the
issue as to SUN/SCO's liability in terms of the code SUN released without the
right to do so.

That doesn't mean the issue can not be addressed by another suit.

[ Reply to This | # ]

Sorry, PJ, but I think you are wrong
Authored by: elderlycynic on Thursday, July 17 2008 @ 05:10 PM EDT
Yes, SCO got off very lightly - but that isn't as good for
them as it sounds. It leaves them in a very weak position
vis a vis an appeal.

And I don't think that Novell do have to appeal, though they
do have to pursue SCO in other ways. When the judgement and
costs are added up, SCO will be a bit strapped, and Novell can
apply for immediate payment. That should be enough for
Chapter 11, and all that it implies.

While SCO is in Chapter 11, it can't sell any litigation
rights just like that - and Novell has several legal ways
in which to oppose them being quietly passed on to another
vexation litigant. I can't remember the details of the
deal, but surely they can terminate for cause? And, since
there is SVRV4 code in UnixWare, that really weakens SCO's
successors position.

And then there is IBM ....

I think that this merely looks good for SCO, but I think
that it gives Novell all that they need.

[ Reply to This | # ]

Lack of media coverage. . .
Authored by: Anonymous on Thursday, July 17 2008 @ 06:08 PM EDT
"Remember when SCO began its media blitz? Stories everywhere. The world
thought it was exciting to imagine Linux on the ropes. Now, when SCO is told it
behaved improperly and must pay millions, only a few even note it. No one cares
about SCO in failure, except for some who feel disgust, like Matt Asay."

I have a couple of comments on this. 1) This particular issue that Kimball ruled
on here isn't really a direct rebuttal of the outrageous claims SCO made back in
2003 - really, Kimball's previous ruling that SCO does not own the rights to
Unix was bigger news, and there was a reasonably large amount of media coverage
of that. This is just about how much SCO owes. While for those of us who've
been following the case, it's nice to see some justice, in the wider world, not
many people really care how much one company owes another company in a
copyright-related lawsuit, as long as it doesn't affect them. . . which brings
me to point. . .

2) SCO's noise in 2003 was very alarmist, and had the potential, if true, to
affect a lot of people. It was like the local news show running the teaser ad at
7pm - "Are you kids in trouble? Could they be exposed to toxic chemicals
that will make them sick and mentally challenged for the rest of their lives?
Watch 5 on your side news at 11 to find out!"

The media can sell stories about something that has the potential to
adversely affect their audience. It's a lot harder to get
readers/viewers/listeners to *care* about something that is neither negative or
positive to them, but just largely maintains the status quo.

Finally, 3) The "Big Case" was never SCO vs Novell, which is about who
really owns Unix. To most people, that's just a technicality. The *interesting*
case was SCO vs IBM - at least, when SCO vs IBM was about Linux violating Unix
copyrights. That case has been on pause for, what, like 2 years now while the
technicalities in SCO vs Novell are decided. We've never really gotten a
definitive ruling that Linux does or does not infringe upon Unix. That would be
the direct answer to the stories from 2003, and so should be a big story.

However, the final problem is 4) Short attention spans. This case has dragged on
for soooo long, that a lot of people have, likely, mostly forgotten all about
SCO and their allegations, have moved on, kept using Linux, and as long as SCO
doesn't come up with some convincing evidence (which would be headlines
everywhere again, because now it affects the audience, potentially, again),
people will keep using Linux and just don't care about SCO's cases or it's
collapse as a company.

[ Reply to This | # ]

Bets On The Reorginization Plan...
Authored by: Anonymous on Thursday, July 17 2008 @ 06:26 PM EDT
Who will give odds that now SCO can't produce a plan unless the IBM litigation
is over....

After all, without knowing the outcome of that litigation it would be impossible
to move forward.

[ Reply to This | # ]

The damage calculation is atrocious
Authored by: SilverWave on Thursday, July 17 2008 @ 06:39 PM EDT

The damage calculation is atrocious

RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Odd logic for apportioning
Authored by: SilverWave on Thursday, July 17 2008 @ 06:46 PM EDT
I believe using the MS/SCO deal to value the SUN/SCO deal is an error.

I also don't see any supporting rationale for 3rd'ing the remaining amount -
other weightings are certainly arguable.

"Section 12 of the Sun Agreement is a release and waiver provision similar
to the Other SCOsource Licenses. As with those licenses, the court finds that
the provision does not release Novell's claims based on its ownership of the
SVRX copyrights, and thus does not implicate SVRX technology and cannot be the
basis for SVRX Royalties."

To SUN I would argue this is worthless... not 1.5M

So... before

$1,500,000 "SCOsource release provision"
$2,547,817 "UnixWare license"
$2,547,817 "UnixWare and OpenServer drivers"
$2,547,817 "release of the confidentiality provisions"

My split:

$0,000,000 "SCOsource release provision"
$0,254,781 "UnixWare license"
$0,254,781 "UnixWare and OpenServer drivers"
$8,633,889 "release of the confidentiality provisions"

RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Frankenbride? McBridenstein?
Authored by: Anonymous on Thursday, July 17 2008 @ 06:58 PM EDT
It's Ah-live!

It has Law-yers!

Must eat Lin-nox!

[ Reply to This | # ]

The Stock Price Rockets
Authored by: Anonymous on Thursday, July 17 2008 @ 07:15 PM EDT
SCO the plaintiff has a multimillion judgement against them, in their own
lawsuit, and the stock price goes from $.12 to $.29.

Well, in absolute numbers, it's not much.

But still, you gotta wonder who buys into management that picks this fight and
then loses not only their millions, but also loses their claim to the copyright
that was their golden goose.

Market irrationality amazes me.

[ Reply to This | # ]

Another bump in the road... and a turn
Authored by: webster on Thursday, July 17 2008 @ 11:11 PM EDT
The decision is a big step toward finality. It can trigger many things soon.
Novell has to draft an order. But there are a number of things juggling around.

The Amount. The verdict of $2.5 million appears to be stunningly modest given
the Novell sway heretofore. The Judge is very cautious. He has called the
issues but gave SCO many doubts on the code arguments. Ironically, SCO now
risks jeopardizing this modest verdict with an appeal! If they appeal, Novell
can too!

The modest verdict makes it easier to post an appeal bond, but SCO will need
help to appeal and exist at the same time. Ironically, ther doesn't seem to be
much in it for York or SNCP based on 2.5 million and no rights. Some SCO
boardmember should see to the appeal bond.

The bankruptcy court will soon have control over what happens. Appealing won't
look too appealing to the Banbkruptcy court. SCO will have to get the PIPE
Fairy or someone to finance it. That constructive trust can take the shape of
an appeal bond.

Before there is an appeal, there will be some post-trial motions a-la SCO
re-considerations of the past. NOvell may join in this time and try and get a
few more bucks from Kimball if they detect any errors in his reasoning. There
are some suggested on this page.

Remember the appeal will raise issues that have already been raised and briefed
before Kimball. They only need to be updated and recast in the appellate brief
formats. There will be no new evidence or issues. Great deference will be
given to the trial judge. They will pay careful attention to the issues by
which Kimball denied SCO a jury trial. But appeal talk is premature. It is
still in Utah and then goes to Delaware. They can dodge Delaware if some
"volunteer" puts up the appeal bond.

Now that Novell is almost done, there will be no reason to stay IBM anymore, Red
Hat too. The greater danger for SCO is if Kimball awards legal fees. It is
rare but he may think it is appropriate regarding the copyrights. It was a
clear summary issue to him. He may not go as far as frivolous, but he may be
tempted to award fees. That would be no small appeal bond.


[ Reply to This | # ]

SCO Got Off Lighter Than a Feather
Authored by: Bill The Cat on Thursday, July 17 2008 @ 11:14 PM EDT
SCO got of so light that helium looks heavy!

Novel spent more than the 2.5 million just defending themselves against this
frivilous suit. They lost at least 10 times this much. For what? What a waste
of time, resources and energy. SCO should be made to pay ALL of Novell's
discovery expenses, legal fees, interest and the measly $2.5 Mil.

Again, a judicial joke of enormous proportions -- and a bad one at that.

Bill The Cat

[ Reply to This | # ]

Lenient in Novell; lenient in IBM, too?
Authored by: Anonymous on Thursday, July 17 2008 @ 11:34 PM EDT

Stock price rise may include speculation that since
Kimball is also the judge in IBM, that his lenience
in Novell will carry over into IBM. Wonder if IBM is
thinking the same thing.

That could be hazardous, though. We all thought
Kimball would drop the hammer on SCO in the Novell
case. He didn't. Now, we're thinking he won't in IBM.
We may be wrong again.

[ Reply to This | # ]

Has SCO broken their contract with Novel?
Authored by: Anonymous on Friday, July 18 2008 @ 07:59 AM EDT
OK We would all like to see SCO pay for their misdeeds but could the ruling of
conversion lead to Novel being able to claim a breach of contract due to SCO's
dishonesty and reclaim the Unix business?
As this appears to be SCO's main source of revenue wouldn't that be justice.


[ Reply to This | # ]

Is There An Experienced Contract Lawyer Here?
Authored by: Anonymous on Friday, July 18 2008 @ 10:59 AM EDT
If there is a lawyer here who is an expert in contract law ; what is your take
on the judge's ruling?

[ Reply to This | # ]

who is Jonathan Lee Richins?
Authored by: Anonymous on Friday, July 18 2008 @ 12:03 PM EDT
who is Jonathan Lee Richins?

[ Reply to This | # ]

SVRX = UnixWare?
Authored by: Anonymous on Friday, July 18 2008 @ 05:55 PM EDT
So did Kimball basically buy the argument that if you change a single line of
code in SVRX and call it UnixWare, then SCO doesn't owe Novell anything ?

[ Reply to This | # ]

  • Yes! n/t - Authored by: Anonymous on Friday, July 18 2008 @ 06:00 PM EDT
    • Yes! n/t - Authored by: Anonymous on Friday, July 18 2008 @ 07:04 PM EDT
  • SVRX = UnixWare? - Authored by: Anonymous on Friday, July 18 2008 @ 06:26 PM EDT
  • SVRX = UnixWare? - Authored by: tknarr on Friday, July 18 2008 @ 08:03 PM EDT
  • SVRX = UnixWare? - Authored by: Anonymous on Friday, July 18 2008 @ 08:27 PM EDT
  • SVRX = UnixWare? - Authored by: Anonymous on Saturday, July 19 2008 @ 12:30 AM EDT
Novell's Right to Open Source SVRX
Authored by: Anonymous on Friday, July 18 2008 @ 06:37 PM EDT
Would Novell taking the $2.5M actually mean that Novell accepted the
open-sourcing of Solaris?

Does Novell even have the right to approve the open-sourcing of Solaris?
There's code in SVRX that Novell doesn't own, after all.

If yes to the first and no to the second (and yes to the second seems unlikely),
how will that affect each party's strategy?

[ Reply to This | # ]

Parsing Judge Gross' comments on exclusivity and constructive trust
Authored by: bezz on Friday, July 18 2008 @ 09:39 PM EDT
First some context. There are many reasons the bankruptcy code is written the way it is. Underlying the law is the concept that it is more beneficial to allow a business to reorganize, continue to keep people employed and paying taxes. When a company encounters problems, the bankruptcy process is designed to assure all creditors are treated as fairly as possible and prevent one or more of them from crushing the DIP and gaining an unfair proportion of the assets.

What qualifies as Chapter 11 is not a simple thing to define. You can't point a s single line item in the balance sheet or cash flow and say "The company is no longer viable, force it into Chapter 7." Just because liabilities exceed assets does not mean a company is no longer viable. It gets much more complicated when you have to assess prepetition and postpetition liabilities. If a company can become viable if reorganized and creditors treated as fairly as possible, then it is the creditors problem for extending debt in the first place.

To get forced into Chapter 7, the DIP must clearly demonstrate it has no viable option to emerge. As an example, if (before filing for Chapter 11) it started selling its assets for pennies on the dollar and (after filing) proposed to sell assets for pennies on the dollar and turn the proceeds over to a favored prepetition creditor, that is going to get things moved into Chapter 7. It's a pretty high bar to get forced into Chapter 7.

The judge is there to assure the DIP is given every fair opportunity to reorganize; Judge Gross is stuck with an odd case here and has been very careful to assure SCO is given fair opportunity to reorganize based upon the motions before him. He sees only a single creditor pursuing SCO and the US Trustee has not filed many objections.

Judge Gross is also faced with a bigger uncertainty: SCO claims it may have a big legal payoff in litigation. And there is no compelling argument before him that the payoff from IBM and Autozone can not happen.

If you must assign blame, don't blame the judge. Blame the Trustee for only making comments in court and not backing them up in writing.

Let's take a look at what Judge Gross said about extending exclusivity in the June hearing.

THE COURT: Thank you, Mr. McMahon. Well, here's where I'm coming out on this: I did not lift the automatic stay for the litigation in Utah to proceed to punish the debtor. I lifted that automatic stay because I thought that having the Court ruling, the District Court's ruling on a pivotal piece of the case, of the bankruptcy case was essential to formulating a plan and to formulating, perhaps, a transaction, and at the moment, with that uncertainty, not knowing whether Novell will recover or whether in fact the debtor will recover, it's beyond me how - Could the debtor formulate a plan? Certainly. They did once, they could do it again, but it wouldn't necessarily be beneficial to the debtors' estate to do so, and I think that is a concern, and I do think that the uncertainty of the litigation and awaiting the result of that litigation does create cause to extend exclusivity here. So I'm going to grant the motion, and I'm not going to limit it to this one extension because, in my judgment, that ties the Court's hands as well as the parties' hands, and I think that the Court ought to be able to consider developments in a case as the case continues, and what appears in August may be very different than what appears today. Clearly, the hurdle in extending exclusivity over time will rise, will grow higher, but that isn't the same as saying this is it. You know, I just always remember one of the lessons in law school was never say this is your last argument, and I don't like to tell parties, this is your last extension because sitting here today I don't know how things will appear in August. So, I'm going to grant the the motion. I'll grant the extension to August 11 on the basis that I do find cause, and I think under the circumstances I am in a position to enter the order as submitted.

MR. SPECTOR: Thank you, Your Honor.

THE COURT: And it is without prejudice but clearly, and the debtor knows this, capable counsel knows this, that it becomes more difficult as time goes along to continue to grant extensions for exclusivity, and that may or may not be the case in August.

MR. SPECTOR: Thank you, Your Honor.

THE COURT: So I will enter this order, and obviously, I'm sure, that the parties will keep me apprised of any developments in the Utah litigation.

MR. SPECTOR: Yes, sir.

THE COURT: And I know judges mean well to get cases decided quickly, but other matters arise and sometimes what appears to be something that can be done a little more quickly is more complex than the judge realizes until he starts to go back and rethink it and review the record.

MR. SPECTOR: Certainly understand that.

What he is saying is that, without a judgment from Utah, the uncertainty of SCO's liabilities were still insufficient to warrant denying an extension of exclusivity. But he also acknowledges SCO has tried to formulate plans in the past and without certainty from Utah, it may not be beneficial to the estate to file another plan. He is giving SCO another chance to file a reorganization plan, but SCO better stick to its argument that they need something from Utah. If there is no determination from Utah, he reserves the option to extend exclusivity. But SCO's previous actions (and wasting cash) are on the record.

Thus, the judge is going to give SCO the benefit of the doubt. If SCO can't get something together in time to file a motion for a reorganization plan in time for the August hearing, he reserved the option to grant another extension. SCO does not have sufficient time between the Utah judgment and deadlines for motions to get a plan done. Expect SCO to file for (and get) another extension of exclusivity for the August hearing.

That leaves us with the problem of a constructive trust. Novell could be writing that up that motion now. Or maybe not. Novell may wait until it gets a determination of interest and legal fees. But let's assume Novell decides to file for a constructive trust in time to be argued at the August hearing.

Novell has compelling arguments. SCO has already wasted a lot of money pursuing failed plans; The cash SCO still has is inadequate (or barely adequate) to fund the trust. But SCO has plausible arguments. The money they have now is not the money they got from Sun (although I doubt this will go very far unless they can demonstrate that money was kept in a separate account and not comingled). With Novell's liability determined with certainty in Utah and well below what was the previous potential, SCO is now in a much better position to finalize a plan. That is where the US Trustee's lack of written objections to SCO's behavior may weigh in to SCO's benefit. The Trustee did not, over the last three months, establish a record of written objections. The Trustee is supposed to provide the impartial oversight of the case -- a Central Scrutinizer, if you will -- and has not formally objected to anything since the March SNCP filing.

Thus, the judge has to make a decision and does not have that impartial voice objecting. A single creditor is fighting the whole case and the Trustee has not formally objected. While SCO has stretched its credibility, the judge has demonstrated he is both maintaining impartiality and upholding the law. Given SCO gets the benefit of the doubt and its lack of blatantly prejudicial attempts to favor any creditor over Novell, and lacking a record of Trustee objections, I don't think he is going to stop SCO's last chance at getting a reorganization plan done.

[ Reply to This | # ]

The Day After & Motion to Intervene Denied as "Wholly Inappropriate" - updated
Authored by: Anonymous on Monday, July 21 2008 @ 12:26 AM EDT
IANAL etc.
But it appears that the SCOsource result is a good one for Novell. It allows
them to avoid the dilema of whether to accept royalties for what is, by their
argument, GPL code. By my understanding, taking the money would put them in
breach of the GPL, by their own argument again. (This would be a clearer breach
than the patent covenant with MS)

The ruling has taken the time to point out the SCOsource 'licenses' are
authorised and valid, but are licenses to pretty much nothing.

There seems to be enough here to allow IBM to move for dismisal, the moment the
stay is lifted. (Do they already have such a motion pending? I can't
follow/remember any more)

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