SCO v. Novell appellate decision(Groklaw)

Some second thoughts.

Groklaw has done a fine job of digging up some of the reactions in the trade press. Some are just way off base and only illustrate that they have no clue as to what is going on. And some just have their bias or inability to separate out the wheat from the chaff.

But, the facts remain.

The former SCO management is out on their ear despite their attempt to hold a teleconference (today apparently). Not sure who is going to believe anything they may say. They are being replaced by a trustee.

But, all of that aside, if the remand of key issues back to the trial court is of any value that certainly would or could be reflected in any offers to buy the SCO assets. And, yes, a pending case against Novell, against IBM, defending against Red Hat and against AutoZone? might have some value.

We shall see who puts up hard earned money to take on Novell and IBM at trial.

I am convinced that the trustee will not do so. Whoever it might be. There is no money left for SCO to pursue the litigation to the bitter end as it were. But, such rights can be sold off for cash. And now there is no incentive to put up a fake sale just to tide SCO over the motions to convert to Chapter 7.

Could SCO appeal the decision to appoint a trustee? Well, I suppose but I doubt any such action is going to succeed. Judge Gross sitting before the bankruptcy court should have taken such action years ago.

But, it is likely that someone will be bidding to take over the SCO assets which include the pending actions against Novell and IBM, etc. I would not expect them to be hiring the old SCO management however. But, they can if they wish.

No doubt that Microsoft would like to see this litigation go forward. I doubt anyone else does. But, the opportunity to scrape up some cash to pay off SCO creditors and proceed with the litigation is available. Interestingly enough the obligation on the part of the old SCO lawyers to prosecute these claims against Novell, IBM and others may extinguish on the sale of the assets. Sure they may be morally obligated to follow through. But, there are enormous expenses yet to come in order to follow through this litigation. And the value of the litigation from a nuisance stand-point is pretty much out the window. The evidence is just not there and even though they have had the summary judgment in part remanded back to the trial court, the truth is that one judge has already decided against them. The evidence did not improve just because the case was remanded.

Of course, the key going forward is just who is going to pony up fresh cash to continue the litigation (even if the case has been remanded). Neither Novell nor IBM is going to run out of funds for the litigation. And now most of the facts of the case are out there in the eye of the public. So secret claims from deceitful management is not going to hold much water. Clearly Microsoft would like to fund someone willing to step forward. But, even they may decide to let the dead horse lie there and rot.

Frankly, there are benefits to having both the Novell and IBM cases fully litigated. Linux is likely to get a clean bill of health. As it stands now, it would appear that SCO gets snuffed out in bankruptcy. And that is still the most likely scenario. Even if the pending cases get itemized in some kind of sale, it is very likely that Novell and IBM will end up outbidding other offers. Novell has either real money or funny money coming to them to the tune of several millions of dollars. And even IBM has an incentive to buy those assets and make the cases go away for good. But, it is up to someone else to bid the price up. I do not see IBM and Novell bidding against each other.

It is going to be interesting to see how the new trustee in bankruptcy wants to proceed with the cases before the bankruptcy court. And you can forget what the old SCO management has to say. They no longer count. Unless they want to convince some third party to pony up some cash and put them back in charge. And frankly I doubt anybody is going to do that.