SCO's plan to return rejected by court

August 7, 2009 | 08:25

Tags: #bankruptcy #chapter-11 #dale-a-kimball #darl-mcbride #lawsuits

Companies: #ibm #novell #sco #the-sco-group

It might have been bankrupt for two years, it might have little left apart from its lawsuits, but the SCO Group is - in apparent homage to the Black Knight - refusing to lie down, petitioning a judge to allow it to sell assets in order to exit bankruptcy and continue its court cases against Novell and IBM.

As reported over on CNet, the company - which has been in Chapter 11 bankruptcy proceedings since 2007 and which had its legal claims to Linux ownership denied by Federal District Judge Dale A. Kimball in 2008 - has asked the bankruptcy court for permission to sell off its Unix business assets. Permission was not granted.

Novell and IBM - both targets of lawsuits by The SCO Group which claimed they had stolen code from the company for inclusion in GNU/Linux - had asked the bankruptcy court to liquidate the company's assets instead in order to ensure that the lengthy court battle would be assuredly over, but were also disappointed.

Instead, Judge Kevin Gross has appointed a trustee which will take overall control of SCO and figure out the best way to exit bankruptcy proceedings intact - including whether or not to continue with the company's long-running litigation once its Chapter 11 proceedings are finished.

The move demonstrates the court's increasing concern at the company's leadership, with Judge Gross stating that the number of suggested and rejected reorganisation plans since 2007 "calls into question whether the sale [of Unix assets to third-party company Unxis] has a sound business purpose and raises doubts of the parties' good faith." Claiming that the sale of assets would leave the failing litigation as the company's "sole business," Gross further stated that the court has become "unwilling to continue to wait while debtors' losses mount."

SCO has not yet commented on whether it intends to appeal the decision, instead stating only that it was evaluating its options.

Do you think that McBride's baby should just lay down and die, or does the company have a right to run itself into the ground in whatever way it sees fit without a court-appointed nanny looking over its shoulder? Share your thoughts over in the forums.
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