The much despised SCO Group has announced that it filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code.

Last month the open source community collectively sighed with relief when a federal district court judge in Utah found that Novell, rather than The SCO Group, was the owner of copyrights related to the Unix operating system. Ralph Yarro, the head of the the SCO Group, had maintained that his company bought the rights to Unix from Novell in 1995, and that the open-source Linux operating system was a derivative product that breeched his company’s Unix copyrights.

SCO’s subsidiary, SCO Operations, has also filed a petition for reorganization. The Board of Directors of The SCO Group have unanimously determined that Chapter 11 reorganization “is in the best long-term interest
of SCO and its subsidiaries, as well as its customers, shareholders, and employees”.

The SCO Group intends to maintain all normal business operations throughout the bankruptcy proceedings. Subject to court approval, SCO and its subsidiaries will use the cash flow from their consolidated operations to meet their capital needs during the reorganization process.

“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 Darl McBride, President and CEO, The SCO Group.

“Chapter 11 reorganization provides the Company with an opportunity to protect its
assets during this time while focusing on building our future plans.”

The SCO Group has filed a series of first day motions in the Bankruptcy Court to ensure that it will not have any interruption in maintaining and honoring all of its commitments to its customers. The motions also address SCO’s continued ability to pay its vendors, the retention of various professional advisors, and other matters.

While usually it’s a sad day when a company needs to file for Chapter 11, however, I think in this case, there won’t be too many tears in the Linux community.

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Entry was posted on Saturday, September 15th, 2007 at 11:10 am under Legal, Linux.

Read more entries by John Pospisil.
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