Software co. SCO has new partners
SALT LAKE CITY A private equity group and a Middle East partner are coming to the rescue of SCO Group, a Utah company that made headlines for its legal assault against IBM and the open-source Linux operating system.SCO - which since 1995 has claimed to control licensing and development of the Unix operating system for corporate servers - sued IBM for allegedly donating its Unix code to the worldwide community of programmers who develop Linux.SCO filed for federal bankruptcy protection in September after a federal judge here ruled that Novell Inc. owns copyrights covering Unix - not SCO. The ruling effectively gutted SCO’s Linux claims against IBM and others.U.S. District Judge Dale Kimball’s decision also leaves the company potentially liable to Novell for millions of dollars in licensing fees. A four-day trial on that issue is set to start April 29.On Thursday, the company said a Middle East partner it would not identify and New York-based Stephen Norris Capital Partners will finance SCO’s comeback with up to $100 million.Executives with SCO and its new partners believe Kimball’s decision will be reversed if they appeal it to a higher court.”It’s a bit of a mixed bag, but we see a business opportunity beyond that,” said Stephen Norris, co-founder and former president of the Carlyle Group. “You can get a legal opinion on all sides of this thing. Everyone in the tech world has an opinion. But some of the court rulings on this just don’t make any sense at all. We think the case has merits.”Norris disputed an earlier statement by a person close to the company that Prince Alwaleed bin Talal was involved in the deal. The prince, who is a member of the Saudi royal family, had previously partnered with Norris on major investments before.”We will have very deep-pocket investors,” said Norris, declining to name any of them.Norris previously teamed with Alwaleed in a $590 million restructuring of Citigroup Inc. that returned a $15 billion profit, according to Norris Capital Partners’ Web site.SCO said the new financing will position it to resurrect its legal claims.”It also marks an exciting future for our business,” Jeff Hunsaker, SCO’s president and chief operating officer, said in the statement.SCO’s core business remains licensing Unix, but it also sells software for group communications on cell phones.Novell bought Unix from AT%26T Corp. in 1992, and SCO has said its predecessor, Santa Cruz Operations Inc., paid Novell with 6.1 million shares of SCO stock valued over $100 million for Unix rights in 1995.
Tags: federal judge, fi, restructuring, salt lake city, servers