SCO Files for Chapter 11

After losing its long-running battle for ownership of Unix copyrights last month, SCO has filed for Chapter 11 bankruptcy protection.

Last month, Judge Dale Kimball ruled that SCO does not own copyrights to Unix and Unixware, gutting SCO’s long-running case against Novell and, in turn, the broader Linux software development community, which SCO claimed owed it damages for copyright infringement. SCO had largely been keeping its operations going on the prospects of a major win in court; now, in the wake of its defeat, SCO has chosen to file for Chapter 11 bankruptcy protection in a move to protect its assets as it moves to deal with legal and financial challenges.

"We want to assure our customers and partners that they can continue to rely on SCO products, support and services for their business critical operations," said SCO president and CEO Darl McBride, in a statement. "Chapter 11 reorganization provides the company with an opportunity to protect its assets during this time while focusing on building our future plans."

SCO appears to be staking its future on mobile Unix-based solutions, particularly its systems management solution called HipCheck and a mobile application system. In the meantime, the company also faces several outstanding issues from its legal tussle with Novell, including a trial in which Judge Kimball will determine what portion of some $25 million in royalties collected from Sun and Microsoft must be paid to Novell…although the Chapter 11 filing essentially means, no matter what Judge Kimball rules, Novell will likely see little, if any, monetary compensation.