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SCO Files MORs for October in Bankruptcy
Saturday, January 08 2011 @ 02:48 AM EST

SCO has filed its monthly operating reports for October in the bankruptcy farce. Here are the September MORs, if you'd like to compare.

Blank Rome was paid $308,547 in September, plus $10,803 in expenses. But no bill is listed for October. So I think that must mean billings for October will arrive eventually. Ocean Park filed a bill for October, after all, although I don't see it mentioned in the October MORs, and for November, but Blank Rome hasn't filed any bills in public since November, when it filed its *March* and *April* bills, weirdly enough. So the picture isn't at all complete. SCO is in worse shape than the MORs are showing, one assumes.

While they list $5,654,137 in professional fees paid since the bankruptcy began, plus $458,851 in professionals' expenses, only one check to professionals went out in October, $15,000 to King & McCleary, LLC, accountants, according to the MORs. If SCO paid out everything actually owed, I think it would be curtains, and as you know by now, SCO doesn't want to quit ever.

Here are the filings:

01/07/2011 - 1213 - Debtor-In-Possession Monthly Operating Report for Filing Period As of 10/31/10 (The SCO Group, Inc.; 07-11337) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Attachments: # 1 Certificate of Service) (Fatell, Bonnie) (Entered: 01/07/2011)

01/07/2011 - 1214 - Debtor-In-Possession Monthly Operating Report for Filing Period As of 10/31/10 (SCO Operations, Inc.; 07-11338) Filed by Edward N. Cahn, Chapter 11 Trustee for The SCO Group, Inc., et al.. (Attachments: # 1 Certificate of Service) (Fatell, Bonnie) (Entered: 01/07/2011)

They have less than a million in hand now, $894,476 to be exact, with $186,987 being restricted for Novell, leaving $707,489. That means they are more or less treading water. In September, SCO had $738,090 in the bank. The money in foreign subsidiary bank accounts is now $1,049,876, with $201,190 listed as "Restricted Cash -- Novell SVRx".

Net revenue in October was $666,766, gross profit $500,872, net profit $377,218, but then comes the professional fees and "reorganization expenses", leaving at the end of it all a net loss of $(195,681). It lists $(553) in professional fees under the heading "Disbursements", and no, I can't explain that. The net payroll for the month was $143,091. Not a lot of SCOfolk left, I guess. Just keeping the body warm, it seems like, in case the January appeal brings a resurrection.

Total liabilities are listed at $13,079,531, $6,812,576 of it post-petition debt and $6,266,955 pre-petition debt. Net cash flow is $156,386. They list $2,135,148 as "Secured borrowings under Debtor Loan". It was capped at $2 million, so this must be interest? In September, it was listed as $2,110,299. When SCO filed for bankruptcy, it listed accounts payable in the amount of $8,259; it's now $1,179,383, or rather that is what it was at the end of October. I can't see from all this how SCO has benefited in any way from the bankruptcy, as it seems to be now worse off than when it began. Even Washington Mutual, which filed for Chapter 11 bankruptcy a year after SCO did, has now filed a reorganization plan, which with some tweaks is expected to be approved. But SCO is still stuck in the mud, with apparently illusory auctions planned for interminably, over and over, without any end to it all. I am getting the oddest feeling that this can't be the main tent of what is going on.

Then this:

Royalties Payable to Novell Intercompany Payables - 63,420
SCO Group Intercompany Payables -
UK Intercompany Payables - 431,481
SCO Germany Intercompany Payables - 618,943
SCO France Intercompany Payables - (33,119)
SCO Canada Intercompany Payables - - 11,349
SCO India - 455,407
I can't help but puzzle over the UK amount. Whatever for? $431,481? I wonder how they define "UK". Where exactly is SCO UK located? And what do they do there?

I see $20,000 in fees paid to Boies Schiller in September, not just expenses, which makes me wonder what for, given that SCO prepaid through the Supreme Court in IBM/Novell, et al litigation. Perhaps for the Florida trademark issue?

In short, it's the same old story with SCO, up to its chin in brackish pond water and mud, hoping for a miracle in January in its second appeal.


  


SCO Files MORs for October in Bankruptcy | 355 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Where exactly is SCO UK located?
Authored by: jmc on Saturday, January 08 2011 @ 03:02 AM EST
It's located in Hatfield, Hertfordshire, on the site of the old British
Aerospace.

You can find details by looking up company number 04738730
on http://wck2.companieshouse.gov.uk/

2ND FLOOR TITAN COURT
3 BISHOPS SQUARE
HATFIELD
HERTFORDSHIRE
AL10 9NA

I posted a picture of their offices here round about 2005 - I'll see if I can
find it again.

As far as I am aware they still have quite a few people working there - a bit
more than can be accounted for by the net assets of about 4 declared in the
last accounts I looked at.

[ Reply to This | # ]

Corrections Thread
Authored by: bugstomper on Saturday, January 08 2011 @ 03:31 AM EST
Please summarize in the Title box error->correction or s/error/correction/ to
make it easy to scan the list of errors that have already been noted.

[ Reply to This | # ]

Off Topic threads
Authored by: bugstomper on Saturday, January 08 2011 @ 03:32 AM EST
Please stay off topic in these threads. Remember to put something in the Title
box to indicate your topic. Use HTML Formatted mode to make your interesting
links clickable.

[ Reply to This | # ]

News Picks Thread
Authored by: bugstomper on Saturday, January 08 2011 @ 03:34 AM EST
Talk about New Picks articles here. Remember to put the title of the News Pick
in the Title box and include a clickable HTML link to the article in your
comment for the convenience of the reader once the article has scrolled off the
News Picks sidebar.

[ Reply to This | # ]

COMES goes here, 2131 (minus the backlog) to go...
Authored by: bugstomper on Saturday, January 08 2011 @ 03:38 AM EST
Keep those COMES transcripts and summaries coming. Please post the transcript in
Plain Old Text mode but with the HTML code embedded in it to make it easy for PJ
to copy and paste.

[ Reply to This | # ]

Net revenue in October was $666,766
Authored by: benw on Saturday, January 08 2011 @ 05:00 AM EST
Ok, that's $100 off perfection, but can anyone tell me how and why anyone in
this world is still paying SCO one thin dime for anything?

[ Reply to This | # ]

Manipulated P&L floated pre-auction?
Authored by: Anonymous on Saturday, January 08 2011 @ 09:45 AM EST
PJ, I'm no finance guy, but here's what caught my eye:

"Net revenue in October was $666,766, gross profit $500,872, net profit
$377,218, but then comes the professional fees and "reorganization
expenses", leaving at the end of it all a net loss of $(195,681). It lists
$(553) in professional fees under the heading "Disbursements", and no,
I can't explain that. The net payroll for the month was $143,091. Not a lot of
SCOfolk left, I guess. Just keeping the body warm, it seems like, in case the
January appeal brings a resurrection."

Seems to me that what SCO is floating is that they have finally right-sized the
company to a point where they have shrunk the monthly payroll to $143K, bring in
revenue of $650K or so, generating a high gross and a net profit (net profit in
50% range) in the $300K/Month range. Net profit of $3.5M/year would be
attractive to buy at,say, $10M, wouldn't it? That's what they are floating
here.

But -- what % of the gross revenue is subject to the 95% dispursement to Novell?
Is SCO saying that this revenue is 'net' of having performed the Novell
dispursement? If so,and if this "reduced" down-size is sustainable for
a few years, then -- they may attract a buyer.

Of course, it's SCO, so there must be a trick hidden in the numbers.

[ Reply to This | # ]

Yet another bad ruling for the GPL...
Authored by: Anonymous on Saturday, January 08 2011 @ 11:40 AM EST
PJ, why no coverage?

http://www.phphosts.org/2011/01/court-rules-that-its-legal-
to-sell-promotional-cds/

http://www.auctionbytes.com/cab/cab/abn/y11/m01/i06/s01

http://www.npr.org/blogs/therecord/2011/01/07/132744291/for-
promotional-use-only-not-for-resale-oh-yes-it-is

[ Reply to This | # ]

...When the Inmates are Running the Asylum
Authored by: wvhillbilly on Saturday, January 08 2011 @ 02:45 PM EST
>>I can't see from all this how SCO has
benefited in any way from the bankruptcy,
as it seems to be now worse off than when
it began.<<

I suppose this is what happens when you have the inmates running the asylum.
When is Judge Gross going to wake up and realize he's being taken for a ride?



---
"It is written." always trumps, "Um, ah, well, I thought..."

[ Reply to This | # ]

I'm sorry
Authored by: Anonymous on Saturday, January 08 2011 @ 10:30 PM EST
But right now, Slackware with KDE 3.5.10 is the only way.

[ Reply to This | # ]

These MORs still do not comply with the spirit of the law
Authored by: Anonymous on Monday, January 10 2011 @ 03:08 AM EST

These MORs still contain the disclaimer, "As the Trustee and its financial advisors have not had sufficient time to review all of the historical information previously reported by the Debtors, the Trustee reserves the right to amend these Monthly Operating Reports, including categorizing some liabilities as pre or post petition obligations."

Why doesn't someone point out to the Court that the Trustee, Cahn, has had more than one and a half years to review the information. Cahn was appointed Trustee in August 2009, IIRC.

[ Reply to This | # ]

how long can these SCOBONEHEADS remain in bankruptcy
Authored by: Anonymous on Tuesday, January 11 2011 @ 03:55 AM EST
like what the heck is this a normal way to stay in business?

[ Reply to This | # ]

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