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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.


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