On Feb 18, 2008 10:52 AM, Garl Grigsby <[EMAIL PROTECTED]> wrote: > Why would anybody want to put money into these idiots? Maybe they have > more lawsuits up their sleeves? > > http://tinyurl.com/3c28fj >
This has to make it past the bankruptcy court before it can happen and that's doubtful. The press report is a bit misleading. SCO reportedly gets only $5 million from the proposed deal as an investment. The rest is loans at 17 percent interest. The best the "investors" could realistically hope for on the loans is a tiny piece of the corpse in bankruptcy. And we're coming up to trial fast on the amount SCO has to pay Novell for wrongfully withholding royalty payments on the licenses SCO sold to Sun and Microsoft. Payment of that award comes ahead of any debtors, since it was Novell's money to begin with, not SCO's. Short story: this ain't an investment. It's a desperate attempt to keep the SCO litigation against Novell and IBM afloat. The only way the "investors" could get their money back would be a settlement with IBM and/or Novell that pays SCO way beyond the cases' nuisance value. If IBM or Novell were inclined to settle, it would have happened a very long time ago, before they incurred the major expense and won the decisions that put them in the driver's seat. They've got no incentive to settle for amounts useful to SCO when SCO is going down for the count in bankruptcy court and has been stripped of the Novell Unix copyrights and the right to sue IBM. Here's a short chronology that might be helpful. -- SCO sues IBM and Novell -- The lawsuit gets bankrolled by sale of Unix licenses to Sun and Microsoft that SCO had no right to sell. -- SCO runs through most of that money, then gets a $50 million investment from BayStar. Documents get leaked establishing that the BayStar investment was arranged by Microsoft. -- BayStar withdraws, taking a big loss on sale of its SCO stock. I.e., the "investment" was a gift. -- SCO runs through the BayStar money, downsizes drastically to squeeze out more revenue so it can keep the litigation alive. -- SCO loses key rulings in the Novell case that spell doom. The day before the trial on how much it has to pay Novell, SCO files for bankruptcy. -- SCO comes up with a new "investor" (forgot the name) and its investment plan is presented to the bankruptcy court. The investment plan doesn't fly. -- SCO comes up with a another new "investor" from the United Arab Emirates willing to "invest" $5 million and loan a bunch more at credit card rates. So pertinent questions might be: 1. Who arranged the UAE "investment" and loan? 2. Why would any sane investor invest in or loan money to SCO without any realistic hope of getting the money back from SCO? 17 per cent interest isn't worth the risk of non-payment for a company in SCO's position. SCO's hope of recovery is a very long shot at best. One might suspect that the investment and loan is at the very least secured by an unidentified player and more likely a quid pro quo for value that falls due on the date the bankruptcy court approves the plan, if ever. 3. Why might the bankruptcy court conceivably agree to dilute the recovery of the unpaid creditors even further by allowing SCO to borrow millions at credit card interest rates from a new creditor? Unfortunately, we may never learn the answers to questions 1 and 2. But it will be fun to read the briefs and see what the bankruptcy court has to say about question 3. Best regards, Marbux
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