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SCO Threatened with Liquidation

The Delaware judge could put SCO out of business, throw it out of his court or approve a plan entered by SCO if it's got one

The day before Novell and SCO were to appear before a three-judge appeals panel in Denver where SCO is seeking to get the Utah summary judgment awarding ownership of Unix to Novell overturned, the trustee appointed by the bankruptcy court in Delaware where SCO sought safe haven, one Roberta DeAngelis, decided to try to push SCO into Chapter 7 and snuff out its life forever on the theory that it continues to lose money and can't get a reorganization plan, well, organized after three attempts.

In her opinion - which ignores what's happening on the big screen overhead - "there is not a reasonable likelihood that the debtors" - that's SCO - "will be rehabilitated."

Perhaps the Denver court - which heard SCO's appeal Wednesday on a very expedited schedule - will deliver a decision before the June 12 hearing date now set for this Chapter 7 threat. Not likely but possible.

The guy who will probably write the decision - a guess based on the lead he took at the hearing - Judge Michael McConnell is set to step down from the bench by late August to start teaching at Stanford. So the wait can't be interminable.

It was Judge McConnell who asked Novell Wednesday whether it really expected to get out of the SCO situation without a trial - exactly what Utah's ruling denied SCO and what it's complaining about.

Judge McConnell apparently can't understand what the point of the infamous Amendment 2 to that God awful Novell-Santa Cruz Asset Purchase Agreement (APA) was if not to transfer the copyrights or at least some of the copyrights - which ones is unclear. Novell basically told him Amendment 2 was meaningless or in the language used "null set."

The judges, on the other hand, seemed to think the Amendment had some actual purpose and that it would be logical to assume it was to clarify the APA.

Novell argued that SCO didn't need the copyrights but when pushed by the judges had to admit to the panel that the APA wasn't like the licenses companies such as IBM, Sun and HP had and that that differences, Judge McConnell concluded, was that Santa Cruz had bought Unix.

SCO has until May 26 to oppose the move to convert. The Delaware judge could put SCO out of business, throw it out of his court or approve a plan entered by SCO if it's got one.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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