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SCO Tells Customers and Partners It Will Appeal Shortly
Wednesday, July 30 2008 @ 01:09 PM EDT

I'm sure you could write it yourself, knowing SCO as we do by now, but SCO's Jeff Hunsaker has sent a letter to "SCO Customers and Partners", letting them know that SCO will be filing an appeal shortly. From the wording, I'd say they intend to appeal both rulings, the August 10th and the July 16th rulings.

It goes on quite a while about how Novell didn't get as much in court as it originally asked for, of course, and how SCO was ruled to have all rights to OpenServer and UnixWare, something that Novell never challenged, and then it states that Judge Dale Kimball indicated that the ruling was a final ruling and hence can be appealed. So that is what they say they will be doing soon.

Interestingly, the letter also says that they filed for bankruptcy and "have been working on a plan with the bankruptcy court to continue in this protection mode until the court ruling regarding Novellís claims was finalized and SCO could have a financial plan for moving forward. Part of this plan includes the potential investment from an outside group that could help lead us out of Chapter 11 and create a path for future business." I take that as an admission that the delays in bankruptcy were planned and that the strategy was to stay there until after Utah ruled. Perhaps that would explain the strange and clearly unworkable "plans" SCO filed with bankruptcy court.

Here are those sections of the latest Dear SCO Customers and Partners letter:

******************************

Dear SCO Customers and Partners,

In an effort to continue to provide updated information, I want to inform you about our progress and recent court rulings....

In an effort to continue to provide updated information, I want to inform you about our progress and recent court rulings. As you may be aware, one of the reasons SCO filed for Chapter 11 bankruptcy protection in September of last year was to protect us from a potentially large and damaging court ruling that could have put SCO in a precarious financial situation. Novell was initially requesting close to $40 million in damages and interest in its claims against SCO. They also wanted to impose a constructive trust over SCO assets to cover the potential award. Since then, we have been working on a plan with the bankruptcy court to continue in this protection mode until the court ruling regarding Novellís claims was finalized and SCO could have a financial plan for moving forward. Part of this plan includes the potential investment from an outside group that could help lead us out of Chapter 11 and create a path for future business....

We continue to believe, however, that the premise for Novellís counterclaims has no merit and that SCOís rights were denied when SCO was not allowed a jury trial to hear its case. We believe we have a strong basis for an appeal and expect one to be filed in the Tenth Circuit Court of Appeals soon.

I would like to outline to you other significant positives SCO gained in this recent ruling that have been lost in the press hype from last week....

* The sum of money owed Novell relates to the Sun Microsystems deal and is not based on an allocation of royalties but the modification of a 1994 contract.

* SCO had the right and continues to have the right to enter into SCOSource licenses.

We see this latest ruling as a positive step forward for SCO (even though we dispute the premise for the trial) as the damage award was low and it confirmed important rights that SCO has in UnixWare and OpenServer. The ruling also indicates that the judge believes this is a final judgment (along with the August 2007 ruling) which means we will soon be allowed to file our appeal. In the meantime, we will continue to focus on developing, supporting and selling our technology....

We value you as a customer and partner. We hope you will continue to find success in SCOís technologies and are committed to helping you succeed.

Sincerely,

Jeff Hunsaker President & Chief Operating Officer
SCO Operations Inc.


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