SCO zombie about to die – files for Chapter 7 bankruptcy

By Graeme Burton
08 Aug 2012 View Comments
zombie accountant

SCO, the low-end Unix software vendor that sought to claim intellectual property rights over the popular open-source operating system Linux, has filed for Chapter 7 bankruptcy, the first stage in its winding up and liquidation.

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The company had filed for Chapter 11 bankruptcy protection in September 2007, but has insufficient funds to re-organise following the sale of its remaining software assets in April 2011. It had sued IBM over a long-standing intellectual property claim against the computer giant's AIX Unix operating system, but lacks the funds to continue.

According to the filing, the company has more than $3m (£1.9m) in outstanding debts and insufficient funds to pay them. "In the May 2012 monthly operating report, filed on 1 August 2012, the debtors' estates report $3,721,181.00 [£2.4m] in unpaid post-petition debts and only $145,352.00 [£92,800] cash on hand," according to the company's latest legal filing.

It adds: "Additionally, there is no reasonable chance of 'rehabilitation' in these cases as the debtors' estates have already sold substantially all of their assets and have no continuing business operations."

Groklaw, the website originally founded by US para-legal Pamela Jones to follow SCO's failed intellectual property 'land grab' on Linux, summed up SCO's Chapter 7 filing as follows:

"The money is almost all gone, so it's not fun any more. SCO can't afford Chapter 11. We want to shut the costs down, because we'll never get paid. But it'd look stupid to admit the whole thing was ridiculous and SCO never had a chance to reorganise through its fantasy litigation hustle."

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