[Tfug] SCO Group files for bankruptcy

[Felix Tilley]

http://news.yahoo.com/s/ap/20070914/ap_on_hi_te/sco_group_bankruptcy;_ylt=AjJWarToq6gES90xObWBAiWs0NUE

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SCO Group files for bankruptcy

By PAUL FOY, AP Business Writer Fri Sep 14, 6:17 PM ET

SALT LAKE CITY - The SCO Group Inc., licenser of the Unix
operating system, filed for bankruptcy protection Friday,
drained by unsuccessfully filing lawsuits claiming its
software code was misappropriated by developers of the
open-source Linux operating system.  ADVERTISEMENT

The Lindon, Utah, company said it is seeking protection
from creditors under Chapter 11 as it continues to license
and improve Unix for corporate servers.

"We want to assure our customers and partners that they
can continue to rely on SCO products, support and services
for their critical business operations," Darl McBride,
president and chief executive, said in a statement Friday.

McBride has blamed competition from Linux for operating
losses and the ongoing slide in company revenues. The
company said its operating loss in the quarter ending April
30 was $1.1 million. A year earlier, it lost $3.9 million.

In August, U.S. District Court Dale Kimball ruled that
Novell Inc., not SCO, owns the copyrights covering the
Unix operating system. SCO licenses the Unix software for
corporate servers.

The case could leave SCO with a bigger liability: Kimball
said SCO may owe Novell software royalties.

"They were going to owe Novell a ton of money that they
probably didn't have," said Rob Enderle, an industry
analyst in San Jose, Calif. "They had been taking a major
hit from legal fees and were burning through cash at a
high rate. I don't think this is a big surprise."

Kimball's ruling was a relief for IBM Corp., the target
of one lawsuit by SCO claiming Big Blue dumped Unix code
in Linux.

Separately, Novell is countersuing SCO for damages in
a trial that was to begin next week but is now on hold
because of the bankruptcy filing.

Chapter 11 frees a company from lawsuits by creditors
while it reorganizes its finances.

McBride didn't immediately return a message relayed Friday
through a public-relations firm.

SCO said the petition was filed electronically in
U.S. Bankruptcy Court for Delaware. Copies weren't
immediately available online.