What`s Behind the SCO Buyout (
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Why would anyone pay $100 million for a company in bankruptcy and
with a collapsing business and a total worth, including selling the
furniture, of about $5 million?If I had a $100 million lying around, I really think I could
find a better investment for my money than buying SCO. I
could invest in, say, high-quality stocks, bonds, gold, New Orleans real estate,
collectable Pez containers or, just the other day, I got this interesting
investment opportunity from someone whose wealthy husband recently died of
esophageal cancer and needs to transfer 500,000 English pounds from Nigeria to
the United States.
Seriously, how does Stephen Norris
& Co. Capital Partners and its Arabian oil billionaire friends think
they're going to get any return on their investment?
Well, first, they're not actually putting in $100 million in cash upfront.
The proposed SNCP/SCO deal,
as laid out to the U.S. Bankruptcy Court in
Delaware,
has SNCP paying only $5 million for a new Series A Preferred stock. This new series
can be converted into 51 percent and 85 percent of SCO's equity, depending on
the amount drawn under the Debt Financing.
Notice those last words: "Debt Financing"? What SNCP is really
offering SCO is "a five-year non-revolving
credit line [of up to $95 million] and bear a high but appropriate rate of
return (LIBOR (London Interbank Offered Rate) plus 17%), reflecting the risks
of this investment commitment and an commensurate rate of return. The Debt
Financing shall be secured by all of the assets of SCO, including all of its
present and future litigation claims."
There are, at my last count, four different
LIBORs. Presuming they mean the one-year LIBOR,
SCO
would be paying 19.78 percent interest if the deal went through today. With
interest rates like this, I'm none too sure that the Bankruptcy Court will let
SNCP buy up
SCO.
If
SCO is bought up, the company has to
use this money for the "primary purpose and intended results of the
Plan, and the financing commitments provided under the MOU (Memorandum of
Understanding) is to encourage and promote an early and favorable resolution of
the Novell/M Litigation. Notwithstanding the August 2007 interim ruling by the
Utah District Court in the Novell Litigation,
SCO
believes it has an excellent chance to prevail in the Novell/
IBM
Litigation, including potential for an award of substantial damages in its
favor should
SCO prevail."
In English, what they're talking about is we give you $5 million, we loan
you up to $95 million, and you're to spend that money on trying to beat the
brains out of Novell, and then
IBM, in
court.
What rock have these people been under?
SCO
has never been able to come close to proving any of its claims about Unix IP
(intellectual property) in Linux in court. And, besides, that August decision
they are talking about? It stated that Novell, and not SCO,
owned Unix's IP anyway.
| | Reader Comments: What`s Behind the SCO Buyout | | >>> Post your comment now!
| | A user comment on this articleAlright students, class is in session. I'm going to make this easy
for everyone. You have all seen the book Where's Waldo. We're going
to play... Posted At: 11-04-09 By: scovoice | | | | | | SCO bill gatesSeems to me you've got the situation down pretty well. I feel though it is the Bill Gates syndrome: When I was young I was a nerd,shunned by most... Posted At: 02-20-08 By: Martin Young | | | | | | Not better for LinuxIt depends on how this is resolved. If Novell and/or IBM purchase SCO out of bankruptcy, that should be the end of it -- forever. Posted At: 02-18-08 By: JRT | | | | | | SCO and UNIX; Don't make me laughSCO FORKED UP. They created their own proprietary stuff in the old days....Their own desktop and everything...
What is interesting is certain... Posted At: 02-18-08 By: UNIX USER | | | | | | unclesmrgol@fewmets.orgI did get specific. Gen. Wesley Clark, George Soros, and (unnamed but there in spirit) Bill Gates (who is the other owner of the Four Seasons hotel... Posted At: 02-18-08 By: unclesmrgol | | | | | | Generalities, generalities...Oh Puleease !!!
"LIBERALS hate Linux" ???
Get real, and REAL SPECIFIC.
WHICH Liberals ?
Certainly not ALL, and most certainly not THIS... Posted At: 02-18-08 By: Anonymous | | | | | | unclesmrgol@fewmets.orgIt gets worse. Buried in the Stephen Norris group's website are Gen. Wesley Clarke and George Soros.
Bill Gates. Wesley Clarke. George Soros. ... Posted At: 02-18-08 By: unclesmrgol | | | | | | >>> Post your comment now! | | | | | |
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