Nasdaq to Delist SCO Sep 27

symbolset writes "The Nasdaq Staff has decided to delist SCO at open of business on September 27, 2007 under their discretionary authority and as a result of SCO filing for Chapter 11 bankruptcy protection. SCO can get a hearing but "There can be no assurance that the panel will grant the Company's request for continued listing.""

What happens?

[Anonymous Coward]

So what happens to those of us who short sold their stock?

Comment removed

[account_deleted]

Comment removed based on user account deletion

A good start, but...

[russotto]

Someone, maybe Novell, needs to ask the Bankruptcy Court to deny SCO's filing for Chapter 11 on the grounds that there's no way they can re-organize into a viable operation, and therefore they need to be liquidated. Then the creditors can auction off the honor of kicking Darl out on his ass.

Re:What happens?

[Anonymous Coward]

You go to pinksheets.com, buy the amount of stock back you shorted for pennies on the dollar, then surrender it back to your broker.

Re:A good start, but...

[DaveAtFraud]

The conversion from chapter 11 (re-organization) to chapter 7 (liquidation) happens automatically if the company can't show how they can remain a going concern. Assuming Novell gets justice, this is a done deal.

The judge in the SCO v. Novell case ruled that SCO retained money that legally belonged to Novell (the legal term is "conversion"). The amount has yet to be determined but chances are that it is greater than SCO's net worth ($30 million has been bandied about). Since this is money that SCO had no right to keep, Novell moves ahead of the creditor pack and SCO is toast. If you dig around on Groklaw, someone found the clause in the Asset Purchase Agreement (APA - the legal document that set up SCO as the bagman and overseer of Unix licenses) that states that money collected by SCO for Unix SVRX licenses belongs to Novell specifcally in case SCO declares bankruptcy.

SCO is in the same position as a bank robber who tries to declare bankruptcy to avoid giving the bank back it's money. The bank robber may have other creditors but they have no claim on the money stolen from the bank since it's still the bank's money. SCO didn't rob a bank but they illegally converted money that belongs to Novell into their own which amounts to the same thing.

I wonder if any of SCO's old trade show swag is at all interesting. Who knows, in fifty years it might be worth something on e-bay.

Cheers,
Dave

Re:hmm

[mudshark]

Interesting factoid: It's currently number 86 out of the 100 oldest .com domain names which remain in use today. Funny how the number 86 would prove portentous...from UNIX for x86 processors to being 86ed from the NASDAQ.

Re:What about Micro$oft ?

[DaveAtFraud]

The judge already found that Novell is the rightful owner of Unix so that concern is a little late. On the other hand, Novell also now owns SuSE Linux and continues to distribute it under the GPL. That means that any overlap, whether intentional or unintentional, no longer matters. There are no longer *ANY* grounds for someone to claim that Linux infringes Unix copyrights. Any such "infringement" just means that Novell as the Unix copyright owner released the code under the GPL. Funny how that works.

I'd worry more about MicroSoft's new pattent FUD campaign. They're using the same strategy as SCO but claiming pattents instead of copyrights (claim there's infringement but not say where or even which patents). S-I-G-H. On the plus side, M$ keeps getting zinged by patent trolls so maybe they'll start working against software patents. Big, rich companies have a lot more to lose and very little to gain.

Cheers,
Dave

BTW, IANAL so the above may be wrong but I don't think so.

Re:This is really bad news for me.

[thebear05]

You put 35% of a 20,000 portfolio in a single stock ? if this were a result of options... but if you have a 20,000 portfolio you are poorly diversified and deserve what happens

That is so going to backfire

[Animats]

Last minute payments to an insider just before filing bankruptcy? That's disastrous for SCO. This is waving a red flag in front of the bankruptcy judge. This screams "attempted asset stripping".

It won't work, either. The bankruptcy trustee can retroactively undo that payment. The trustee can go back into the past 90 days for any transaction and undo it, or back a full year for anything involving an insider. Special payments to insiders during a bankruptcy need explicit permission from the bankruptcy court. And saying "we did it before the bankruptcy" won't help. The law (11 U.S.C. 547) is that "the debtor is presumed to have been insolvent on and during the 90 days immediately preceding the date of the filing of the petition."

The side effects of this will be severe. Remember, SCO management is currently only a "debtor in possession", and can do only whatever the bankruptcy trustee and the court specifically let them do. As soon as the judge gets word of this, SCO's management will have their chain yanked. SCO management will be much more closely supervised and have much less discretionary authority than they expected.

SCO management was apparently thinking they could go into chapter 11 quietly and cut Novell out of the loop. They didn't even list Novell as a creditor in their initial filing. That plan stopped flying when Novell sent five bankruptcy attorneys from Morrison and Foerster to Delaware for the first-day bankruptcy hearing.

Novell's request for a "constructive trust" for the unpaid royalty payments just got a huge boost. Now they'll probably get it. Which drains out most of SCO's cash.

Re:A good start, but...

[russotto]

Well, it's different because a bank robber might serve jail time, whereas Darl is laughing all the way to the bank. We (as a society) have nice legal and intellectual games to justify it when rich people do it.

It's rare, but it's not competely unheard-of to pierce the corporate veil and go after the officers and directors of a company.