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Final Judgment — SCO Loses, Owes $3,506,526 265

Posted by timothy
from the seems-charitable-to-sco dept.
Xenographic writes "SCO has finally lost to Novell, now that Judge Kimball has entered final judgment against SCO. Of course, this is SCO we're talking about. There's still the litigation in bankruptcy court, which allowed this case to resume so that they could figure out just how much SCO owes, which is $3,506,526, if I calculated the interest properly, $625,486.90 of which will go into a constructive trust. And then there's the possibility that SCO could seek to have the judgment overturned in the appeals courts, or even the Supreme Court when that fails. Of course, they need money to do that and they don't really have much of that any more. Remember how Enderle, O'Gara and company told us that SCO was sure to win? I wonder how many people have emailed them to say, 'I told you so.'"
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Final Judgment — SCO Loses, Owes $3,506,526

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  • You LOSE! (Score:5, Funny)

    by Wandering Wombat (531833) <mightyjalapeno AT gmail DOT com> on Friday November 21, 2008 @03:16PM (#25849215) Homepage Journal
    Good DAY, sir!
    • by Amazing Quantum Man (458715) on Friday November 21, 2008 @03:25PM (#25849355) Homepage

      Mod parent: +1, Willy Wonka

    • by Zencyde (850968) <Zencyde@gmail.com> on Friday November 21, 2008 @04:30PM (#25850229)
      Not that it's entirely relevant; but, when I was a junior (2004-2005) my friends and I got ahold of Darl McBride's home phone number and prank called their house. His wife picked up and I went on about some investment opportunity. As soon as I mentioned Linux she started bitching me out and called me a "little shit". :) Yeah, prank calling CEOs was all the rage my junior year.
    • by yog (19073) * on Friday November 21, 2008 @04:36PM (#25850325) Homepage Journal
      What about all those companies that paid those don't-sue-us fees to SCO back in 2002? Are they going to step forward and demand their money back, now that the entire basis for this shakedown has been invalidated? And what about companies like Chrysler [wikipedia.org] which also won against SCO? It seems to me they didn't get as much press as the IBM-SCO case did.

      One might also ask, whither Microsoft, now that their $86 million investment in Baystar has turned out to be a complete waste. Shouldn't some executive's head roll for this? God, if someone can waste that much money at Microsoft and get away with it, they must be either Steve Ballmer or Bill Gates, either of whom is too powerful to reprimand.

      I will say, SCO in its day was very intimidating, with Darl Bride as an eloquent and persuasive spokesman. His pronouncements sounded factual and reasonable, until people like Groklaw looked behind the curtain and showed us the truth. Well, it's just a testament to the power and resiliency of the open source community that Linux and friends will be around long after the world has forgotten what SCO was.
      • Re: (Score:3, Interesting)

        by Lijemo (740145)

        What about all those companies that paid those don't-sue-us fees to SCO back in 2002? Are they going to step forward and demand their money back, now that the entire basis for this shakedown has been invalidated?

        Blood. Turnip.

        Doesn't do a lot of good to go to the effort of suing someone who doesn't have a dime to give you for your efforts-- they'd be in line behind the people who SCO has already been ordered to pay, and SCO is already insolvent.

      • "a complete waste" (Score:5, Insightful)

        by DXLster (1315409) on Friday November 21, 2008 @05:03PM (#25850783)

        whither Microsoft, now that their $86 million investment in Baystar has turned out to be a complete waste.

        Ummmm, that $86 million was the best money MSFT spent since the $50,000 for QDOS. The chilling effect that the SCO suit produced for the Linux community was huge, and bought MSFT a lot of extra time. And you can't even begin to imagine the degree to which it has slowed innovation in IBM Software Group. IBM engineers can't post without 10 person-months of review from Legal.

      • by dbIII (701233) on Friday November 21, 2008 @07:40PM (#25853129)

        I will say, SCO in its day was very intimidating, with Darl Bride as an eloquent and persuasive spokesman

        He came across as paranoid, self-obsessed and frivolous in my opinion. At a trade conference he made clients and potential clients sit through a vanity production of him as James Bond fighting the evil forces of Linux as one example. The whole fake death threat for publicity thing, bodygaurds and going about heavily armed thing really made him look dangerously mentally unbalanced. As for intimidating: to start with he had less staff and less budget than a typical high school principal, then he shed staff after that. He never was a big wheel. He was just a big noise.

        Personally I think the whole thing really was a two man scam where Darl drove the company into the brick wall of IBM and funneled as much of the legal expenses as he could to his brother. Between them I think they have milked SCO fairly dry.

      • by countach (534280) on Friday November 21, 2008 @07:50PM (#25853261)

        I'm pretty sure the contracts would have been vague enough that there are no refunds. Something along the lines of "we indemnify you against all IP issues that may or may not exist".

      • by schon (31600) on Friday November 21, 2008 @08:38PM (#25853781)

        SCO in its day was very intimidating, with Darl Bride as an eloquent and persuasive spokesman. His pronouncements sounded factual and reasonable, until people like Groklaw looked behind the curtain and showed us the truth.

        Sorry, but I think you and I have very different recollections of what happened.

        Darl may have been eloquent - right up until he had to answer questions. But once he did, it was quite obvious that it was a scam.

        For example, when he said that every Linux user owed him $699, the immediate question was "why? Where is the code?" His response was always "I can't show it to you."

        You don't have to be a genius to understand that was an outright lie. If he can't show it to you, then you don't have to pay him. The excuse that they had NDAs that prohibited it was laughable. Any attorney who signed a deal saying that said that the company wasn't allowed to identify their own code, even if someone else made it publically available would be disbarred. It's just absurd.

        Darl came across as a sleazy con-man. Persuasive he was not.

    • Re:You LOSE! (Score:5, Interesting)

      by slashnik (181800) on Friday November 21, 2008 @05:08PM (#25850895)

      Not so sure
      Is Novell a good guy today
      or
      a less bad guy

  • Maybe I'm the only one, but I picture Judge Kimball reading his judgement in the governator's voice....
  • RIGHT :P (Score:5, Funny)

    by revlayle (964221) on Friday November 21, 2008 @03:17PM (#25849219) Homepage
    There is no "finally" with SCO
  • I for one (Score:5, Insightful)

    by Junior J. Junior III (192702) on Friday November 21, 2008 @03:17PM (#25849231) Homepage

    Can't wait to hear the last SCO story. Barring appeals, I really hope this is it.

    • Re:I for one (Score:5, Informative)

      by Amazing Quantum Man (458715) on Friday November 21, 2008 @03:27PM (#25849413) Homepage

      This ain't it.

      Novell is done (modulo appeals and the arbitration -- see below).

      Still pending

      * Bankruptcy
      * SuSE UnitedLinux arbitration (stayed pending resolution of BK)
      * IBM's counterclaims (stayed pending resolution of BK)
      * RedHat (stayed pending IBM)
      * AutoZone (technically still alive, don't believe anyone's ever going to finish it. Stayed pending IBM, I believe).

      • Chapter 7? (Score:3, Interesting)

        by maz2331 (1104901)

        I wonder if there will be a point that Novell can force SCO into an involuntary Chapter 7 (liquidation) bankruptcy? Especially in light of the ruling that this money isn't a "normal" debt but a "conversion" - does that take it outside of what the bankruptcy court can protect?

        • Re:Chapter 7? (Score:5, Informative)

          by Svartalf (2997) on Friday November 21, 2008 @04:42PM (#25850447) Homepage

          This is close to being it...they're guilty of conversion. That transforms them into a priority creditor with a 3.5 million dollar claim to things before anything else.

          I doubt SCOX could mount an appeal effort. If they could, it's going to have to be something where they had some tidbit of the law overlooked where they didn't get a fair trial, because there's nothing else for them to actually appeal otherwise.

  • by pitchpipe (708843) on Friday November 21, 2008 @03:19PM (#25849255)
    Seriously... isn't SCO just like the Energizer Bunny. I keep hearing that we've heard the last of these pukes, and then I hear it again, and again, and again...
  • Bailout (Score:5, Funny)

    by unlametheweak (1102159) on Friday November 21, 2008 @03:19PM (#25849261)

    Of course, they need money to do that and they don't really have much of that any more.

    They could always apply for a government bailout package.

    • We are too entertaining to fail!

    • They could always apply for a government bailout package.

      Without us, Linux will fail!
    • Re: (Score:3, Insightful)

      by b4upoo (166390)

      Bush is dumb enough to grant SCO money for a bailout.

    • Re:Bailout (Score:4, Funny)

      by Orion Blastar (457579) <[orionblastar] [at] [gmail.com]> on Friday November 21, 2008 @05:23PM (#25851171) Homepage Journal

      Actually they fit the criteria of the other companies getting the bailouts:

      #1 Can't balance a budget.
      #2 Stupid or insane CEOs and upper management.
      #3 Lobby Congresspeople to try and vote for certain bills to be passed so they owe them favors for a bailout.
      #4 Annoying corporate culture that makes no sense.
      #5 Pissed away most of their money on some stupid lawsuit.
      #6 Blames someone or something else for their financial woes instead of their bad management and bad accounting books.

      • Re: (Score:3, Interesting)

        by RichiH (749257)
        You still don't get it, do you? The whole financial crisis has been a huge success. At 25+% margins _per quarter_ for several years in a row, the people who actually did this are drowning in _personal_ wealth. And when it comes right down to it, that is all that matters to them. Especially since they will not have to pay anything back or go to jail for this. They really and truly won.
  • by Majik Sheff (930627) on Friday November 21, 2008 @03:20PM (#25849299) Journal

    Now can we dismember the corpse, seal it in a hardwood box, put the box 12 feet under ground, cover it with at least a couple of tons of concrete, and then build a parking lot over the spot?

    I don't want any chance of this zombie coming back again and demanding royalties.

    • by tnk1 (899206) on Friday November 21, 2008 @03:28PM (#25849421)

      Don't forget the garlic you need to put in the coffin.

      And make sure and kill any ghoul servants. They're always trying to resurrect their masters.

      I suggest you start by a scheme of napalm applied liberally to the offices of their legal representation.

    • Many times when companies die (for legal reasons) the Management just creates a new company. I'm sure they could re-emerge as a patent Troll funded by Microsoft. BTW you can't kill the unDead.

      • by legirons (809082) on Friday November 21, 2008 @03:46PM (#25849607)

        Many times when companies die (for legal reasons) the Management just creates a new company.

        You mean like when SCO setup a company in the far-east and tried to transfer their assets to it?

        Or like when SCO proposed splitting its company in two, with one part taking all the assets, and the other part taking the legal claims?

      • by Antique Geekmeister (740220) on Friday November 21, 2008 @04:05PM (#25849833)

        They're already trying. They're trying to switch to mobile phone apps, and unload the devastated and moribund server business. Darl seems to be trying to spin off the legal claims business into a separate patent troll or copyright troll company, to try and continue the FUD against Linux and open source that Microsoft kept them alive for.

        Or did you think that $50 million from Microsoft that enabled them to continue the lawsuits was an investment in actual business?

        • Re: (Score:3, Funny)

          by X0563511 (793323)
          Isn't FUD supposed to spread... well, FUD? If that is their intention, they are failing. The only things they are spreading is irritation sympathetic embarrassment.
        • Re: (Score:3, Insightful)

          by Mateo_LeFou (859634)

          "did you think that $50 million from Microsoft that enabled them to continue the lawsuits was an investment in actual business?"

          It was not an investment; they *obviously were buying something extremely valuable from SCO.

          It's a bit peculiar that *no *one *else seems to want to buy what SCO has, but MS works in mysterious ways, no?

          • Re: (Score:3, Insightful)

            What they bought was invaluable: a proxy to carry on a determined FUD campaign against Linux and open source, lending an air of credibility to the claims without Microsoft being directly involved. It also crippled SCO from changing tactics to actually producing tools again: SCO operating systems are being deliberately phased out for other business level software vendors.
    • by VEGETA_GT (255721) on Friday November 21, 2008 @03:34PM (#25849495)

      And knowing my luck I would park on that lot and would have them send me a letter saying I owe them royalties for parking over there grave as its a privilege to do so.

  • Enderle matters? (Score:5, Insightful)

    by l0ungeb0y (442022) on Friday November 21, 2008 @03:20PM (#25849305) Homepage Journal

    Anyone that would write an article extolling his Ferrari branded laptop and how the prancing horse logo adds raw ultimate power should never be taken seriously.

    I guess some people do listen to that hack.
    Well, perhaps a few less are listening to him now.
    *shrug*

    • by tnk1 (899206) on Friday November 21, 2008 @03:30PM (#25849441)

      Um, I beg to differ. That Ferrari logo adds at least 220hp to my internet connection.

    • by abigor (540274) on Friday November 21, 2008 @04:19PM (#25850041)

      My favourite Enderle quote of late:

      "Next Monday, the Intel Core I7 launches, and Iâ(TM)ve been using a system that Intel sent out which not only has the Core I7 and X58 chipset, but two 4870 X2 ATI graphics cards and two of the companyâ(TM)s new high-speed flash drives.

      To say that this system, (which has 4 real cores, and 4 virtual cores through hyperthreading, for a total of 8) is fast would be vastly understating the experience. The word amazing comes to mind, and I can hardly wait to put Windows 7 on it (is there such a thing as blindingly fast, squared?)"

      Hahahaha

    • Re: (Score:3, Informative)

      by Ransak (548582)
      He's been unapologetic [linuxquestions.org]. Denial isn't just a river in Egypt.
  • by Anonymous Coward
    What about SCO's suit against IBM which started this entire mess? I assume that that is still going on.
  • by Weaselmancer (533834) on Friday November 21, 2008 @03:24PM (#25849333)

    SCO gets a final judgement and loses $3.5m. Someone (Missouri) finally files a RICO suit against the RIAA. Our do-nothing Congress actually gets the balls enough to stand up to the automotive industry.

    At this point I'm halfway expecting to see a copy of Duke Nukem Forever in my stocking.

    • by mcgrew (92797) * on Friday November 21, 2008 @03:48PM (#25849633) Homepage Journal

      SCO gets a final judgement and loses $3.5m

      meanwhile Darl McBride is still disgustingly filthty rich. Too bad instead of stealing millions of dollars from innocent rubes, he wasn't dog fighting [chicagotribune.com] instead, like Michael Vick [chicagotribune.com].

      Michael Vick lives in a prison in Kansas, making 12 cents an hour while plotting his return to the NFL. His houses and farms will soon be gone, the two yachts are history, and he's down to his last couple of Range Rovers.

      A race horse he bought for $60,000 died of colic, the Atlanta Falcons are still trying to hit him up for millions they paid him, and the IRS and the state of Georgia want nearly $1 million in back taxes.

      In 2006 he made nearly $15 million. Recently he reported total income of $12.89 for an entire month.

      I want to see Brainwol and McBride (while we're at it, my mortgage company's President and oil company presidents as well) in a cell with Vick.

      These people are the anti-Robin Hoods, stealing from the poor to give to the rich.

    • by decalod85 (1214532) on Friday November 21, 2008 @03:56PM (#25849733)
      And "Chinese Democracy" from GNR is due out on Sunday. It's like the final episode of a TV series where the writers are trying furiously to wrap up all the loose ends!
    • by SEE (7681) on Friday November 21, 2008 @04:20PM (#25850049) Homepage

      The only holdup on Duke Nukem Forever is the manual. And Harlan Ellison will get around to that just as soon as he finishes The Last Dangerous Visions.

  • by neonux (1000992) on Friday November 21, 2008 @03:32PM (#25849469) Homepage

    I've been waiting such a long time to afford one of these to try that Linux thing legally.

  • by wcrowe (94389) on Friday November 21, 2008 @03:32PM (#25849471)

    I wonder about those companies who paid the SCO license fees to use Linux? Are they free now to sue SCO for the license fees they have paid?

    • Re: (Score:3, Informative)

      by _Sprocket_ (42527)

      I wonder about those companies who paid the SCO license fees to use Linux? Are they free now to sue SCO for the license fees they have paid?

      Part of that question is who paid, how much they paid, and under what kind of agreement. Note that SCO Source wasn't exactly a cash cow. A SCO financial statement in 2005 claimed $32,000 from the program. That's not much (not that I'd pass up the opportunity to cash that kind of check for personal use).

      Also take in to count dupes like EV1. Their "estimated over $1M" deal actually was $800k. And it included this little gem:

      SCO represents and warrants that it has full right and title to grant the rights

  • by YesIAmAScript (886271) on Friday November 21, 2008 @03:45PM (#25849605)

    How much did it cost to defeat SCO and stop their nonsense? I'd be shocked if the legal bills on just the Novell/IBM side were under $10M.

    The system worked once, at least in rendering the right decision. But few can afford to spend the amount of money this took.

  • by bcrowell (177657) on Friday November 21, 2008 @03:50PM (#25849675) Homepage
    I thought it was extremely gratifying to look at the graph of the stock price [yahoo.com] and see that Yahoo had thoughtfully provided some space on the y axis for negative values.
  • by Jason Levine (196982) on Friday November 21, 2008 @03:52PM (#25849691)

    So they now owe Novell $3.5 million or so. A look at their June '08 financials ( http://finance.google.com/finance?hl=en&fkt=917&fsdt=2133&q=SCOX&um=1&ie=UTF-8&sa=N&tab=we [google.com] ) makes it look like SCO is currently worth $8.96 million. Of course, then they have $5.85 million in current liabilities. Add in this $3.5 million and SCO's wallet runs dry (and then some). Of course, this doesn't take into account liabilities that they don't need to pay back immediately. Things like that will come up in any bankruptcy hearing.

    The end result is that the amount of the award is basically meaningless. Novell may not see that entire figure (if anything) due to SCO going bankrupt. It's the ruling itself that is important. All of SCO's claims were knocked down. Novell's claims were either upheld, made moot by further developments, or voluntarily dismissed. SCO got beat down hard and I don't think they'll be getting back up anytime soon.

  • yay! (Score:2, Insightful)

    by Anonymous Coward

    YAY! :D

  • by jav1231 (539129) on Friday November 21, 2008 @04:07PM (#25849865)
    The sad part being that the old SCO and its UNIX had to be affiliated with the litigation hound that SCO is today...or was yesterday.
  • Market Cap... (Score:4, Interesting)

    by jwiegley (520444) on Friday November 21, 2008 @04:07PM (#25849869)

    The $3.5M exceeds their current market cap. which appears to be only $2.81M. (pretty far fall from the $2.54B they had in 2000.)

    Don't quite know what that means but I'm hoping it means the judgment effectively wipes them off the map entirely.

  • by Random BedHead Ed (602081) on Friday November 21, 2008 @04:12PM (#25849913) Homepage Journal

    Remember how Enderle, O'Gara and company told us that SCO was sure to win? I wonder how many people have emailed them to say, 'I told you so.'"

    Agreed - these tech pundits were complete tools. O'Gara was shallow enough to stalk Pamela Jones of Groklaw in 2005 and publish alleged photos of her apartment. Only Daniel Lyons (he of the Fake Steve) later admitted he was wrong [slashdot.org].

    But this gets into a bigger pet peeve of mine: the tendency of people to disregard details in pursuit of what they wish were true. These pundits really wanted Linux to fail massively, either because their bread and butter was covering the developments of Microsoft and other proprietary OS vendors or because they equated Linux and free software with anti-capitalism. This led a lot of these shrills to cling to a very silly, unsubstantiated lawsuit long after it became clear that SCO had no concrete evidence to present in court and clearly hadn't thought through licensing considerations (BSD-licensed code in both Linux and System V, for example).

    Many people really don't like delving into the details before forming an opinion and sticking to it. See also: religion, politics.

  • YAAAAAAY! (Score:5, Funny)

    by HolyCrapSCOsux (700114) on Friday November 21, 2008 @04:22PM (#25850085)

    And that pretty much wraps it up. Now I need a new name...

  • Ding-a-ling (Score:3, Insightful)

    by BigFootApe (264256) on Friday November 21, 2008 @05:11PM (#25850959)

    Would that be jail time calling? Here's to hoping.

    I want to know how much these pirates bilked Joe Investor for. Furthermore, I hope both IBM and Novell are interested in cooperating with bodies such as the SEC in holding SCO and Canopy management personally responsible for any and all wrongdoing, including both legal malpractice and stock manipulation, during the SCO race towards infamy.

  • Constructive Trust (Score:5, Informative)

    by debrain (29228) on Friday November 21, 2008 @05:14PM (#25851015) Journal

    A constructive trust is a trust (a legal duty to a beneficiary by the person in possession of something) that has been created by a court. There are many types of trust, but they all essentially mean the same: There is something (in trust) that you never had the authority over in the first place because it belonged to someone else (the beneficiary).

    As an example, in many places a constructive trust in bankruptcy exists over employee wages such that employees have a superpriority over other creditors (i.e. employees get all their money before creditors get any), but further a the thing held in trust (wages) that was previously given away (to pay creditors) can actually be taken back from subsequent possessors ("restitution"). In other words, anyone given anything by an insolvent (that state of not being able to pay bills that typically precedes a declaration of bankruptcy) company may have to give it up so that employees can get their wages held in trust. Employment law varies wildly- many jurisdictions don't enact a trust- but it's a decent example, easy to relate to.

    In the SCO case the trust is over funds, meaning the court has said (by declaring the construction of a trust) that the beneficiary (Novell) of the trust can "follow the money" from SCO to whomever may now hold it because SCO never had a right to the funds in the first place. That may include wages to directors, bank transfers, rent, etc. Further, if SCO is unable to pay the money, and it cannot be traced, anyone that encouraged SCO to spend money that SCO didn't have a right to may have committed a wrong (intentionally, having been complicit or willfully blind) related to the breach of trust.

    These are just common law principles for the edification of anyone interested, and the law may very well be quite different in Utah (or most anywhere else). But it's also an oculus into why a constructive may be relevant- and it's not well explained in the article.

  • For trying to sell us "Linux Licenses" in order to use Linux legally. Turns out they had no legal basis for those licenses, which is of course "fraud" via a civil court lawsuit.

    Now how many Linux users are there? Let's get $1000 each.

  • by John Hasler (414242) on Friday November 21, 2008 @05:39PM (#25851417) Homepage

    Well, no, not finally. They've got more losing to do in the Suse arbitration. And they've got a lot of losing to do yet in the IBM case, as well as the Autozone and Red Hat cases.

  • by kelvin31415 (1310803) on Friday November 21, 2008 @05:39PM (#25851421)

    There remain a few dedicated and extraordinarily talented kernel engineers embedded within the parasitized husk that now goes by the name "SCO". Among them are people who started work at Bell Labs decades ago, and have thereafter worked continuously on the same evolving UNIX code base through numerous renamings and acquisitions. They have been ill-served by their management for years, and while some ignoramuses will consider them tainted by their association with SCO, they have my greatest respect.

    I now return you to the usual hate-fest already in progress.

  • All irrelevant (Score:5, Insightful)

    by macraig (621737) <mark.a.craigNO@SPAMgmail.com> on Friday November 21, 2008 @06:25PM (#25852101)

    None of this matters: Darl McBride et al were still personally enriched by all this shenanigans, and they are all still alive and able to run off somewhere else and pull yet more shenanigans.

    The bad CORPORATION was slapped, but its ORGANS still won and will get "transplanted" somewhere else. Until we get rid of the ethical shield that corporate law provides, people like this will still rule the roost.

    • Re: (Score:3, Insightful)

      by macraig (621737)

      Errr... I should have been clearer: "... ethical shield that corporate law provides" should instead read "... ethical shield that corporate law and corporate hierarchy provides".

      For the former, you might investigate Thom Hartmann's book "Unequal Protection". For the latter, consider the cliches about absolute power and corruption and the Peter Principle with a self-centric sinister twist: increasing ambition almost always leads to decreasing ethics. Those who get promoted or hired for the top ranks are us

  • Now is the time (Score:4, Interesting)

    by symbolset (646467) on Friday November 21, 2008 @08:31PM (#25853703) Journal

    At long last Novell and Sun have the opportunity to kiss and make up over their little Open Solaris argument. Or not.

    Will they? Sun paid millions for the right to open Solaris to a company that was suing Novell. That money was rightly Novell's, as the right was theirs to sell and not SCO's. That money prolonged the unjust suit for a long time, costing Novell more than just the lost revenue, but also legal fees for their own lawyers to defend against the very lawyers funded by Sun's investment.

    This should be interesting, but we're not going to get the real story - just the announcement. How forgiving is Novell?

  • Not so fast (Score:3, Insightful)

    by xs650 (741277) on Saturday November 22, 2008 @12:06PM (#25857983)
    SCO isn't dead until someone drives a wooden stake through it's heart.

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