SCO Bankrupt But Not Yet Dead
(www.internetnews.com Via Thomson Dialog NewsEdge) Darl McBride, president and CEO of The SCO Group , assured customers and partners that they can rely on the company despite bankruptcy.
The embattled Unix vendor revealed that it filed with the Securities and Exchange Commission for chapter 11 bankruptcy protection late Friday afternoon. The move does not, however, mean that SCO is throwing in the towel on either its business operations or its ongoing legal proceedings.
A hearing is scheduled for Tuesday in Delaware on the particulars of SCO's bankruptcy filing.
"The SCO Group intends to maintain all normal business operations throughout the bankruptcy proceedings," Darl McBride, president and CEO of The SCO Group, said in a statement. "Subject to court approval, SCO and its subsidiaries will use the cash flow from their consolidated operations to meet their capital needs during the reorganization process."
SCO has been flirting with financial disaster for some time, with its last series of quarterly reports showing continuing loses at the firm.
Novell, which is currently at the head of the SCO litigation list, earlier this year warned that SCO was going bankrupt and sought out the court's protection to ensure that it would get its alleged recompense should SCO fail financially.
SCO' McBride denied the allegation and publicly argued that SCO had enough cash to see through its business and legal activities.
Turns out he was wrong.
"We want to assure our customers and partners that they can continue to rely on SCO products, support and services for their mission-critical operations," McBride said in his statement. "Chapter 11 reorganization provides the company with an opportunity to protect its assets during this time period while focusing on building our future plans."
Novell has been engaged in a three-year battle with SCO over ownership of Unix copyrights. A trial had been scheduled to start this week. It is currently unclear as to whether that will occur.
In a follow-up document filed after its bankruptcy filing, SCO said that nearly 50 percent of its account staff have either been terminated or have resigned. SCO has petitioned the bankruptcy court to allow it to hire temporary accounting staff while under chapter 11 protection.
SCO's bankruptcy filing comes on the heels of a ruling from the judge in the Novell case that SCO did not own the Unix copyrights. That ruling sent SCO's legal prospects and its stock reeling.
What's left of SCO's stock value has been further eroded in Monday morning trading with shares down over 30 percent.
Copyright 2007 Jupitermedia Corp.
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