SCO hopes selling Unix will raise $36 million
The SCO Group plans to sell its Unix assets--but not its big Linux lawsuits--to York Capital Management for up to $36 million.
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The SCO Group, working to emerge from Chapter 11 bankruptcy protection, hopes to sell its Unix assets to York Capital Management for up to $36 million, the company said this week in regulatory and bankruptcy court filings.
Through the deal, York would provide SCO with $10 million in cash; up to $10 million in credit to fund its Linux-related legal fight and to get 20 percent of revenue from that action; $10 million for a 20 percent stake in the company; and $6 million to license the Hipcheck products from SCO's Me mobile device software effort and to share revenue from that line, according to the U.S. Bankruptcy Court filing.
SCO, which is engaged in expensive, controversial but so far largely fruitless Linux-related lawsuits against Novell and IBM, urged the court to approve an accelerated bidding process for the assets. The auction would allow others to offer a higher price than York, but time is of the essence, the company argued in the bankruptcy court filing.
"Based on debtors' (SCO's) financial condition, but more importantly the skittishness of existing and potential customers" to engage in a business relationship with SCO, "the debtors must move quickly to realize the highest and best price for their assets," the filing said.
The SCO Group has been beleaguered by steadily dwindling revenues. It suffered a major legal setback in August when a court found that Novell retained the Unix copyrights SCO thought it bought. But it looks like the Lindon, Utah-based company plans to keep on fighting: the asset purchase agreement specifically excludes the suits against Novell and IBM from transfer.
Unix has had a long and winding history as assets have been sold from the original sponsor of the operating-system project, AT&T. The assets were sold to Novell, then to the Santa Cruz Operation, then to Linux seller Caldera International, which renamed itself The SCO Group after trying to remake its business on the SCO Unix products. It's a tortured issue trying to decipher exactly what intellectual property--patents, trademarks, copyrights and trade secrets--traveled to new ownership or remained with earlier owners.
An SCO representative didn't comment beyond the filing. York didn't immediately respond to a request for comment.