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Novell: SCO, We Want Our Money

"Pay up." That's the message that Novell is sending to SCO via the legal system in a recent legal filing.

The company isn't about to let SCO off the hook for the money it's owed by the embattled Unix vendor. SCO filed for bankruptcy protection from its creditors in mid September in an attempt to stay alive. The bankruptcy filing also served to delay SCO's trial with its largest creditor Novell over Unix copyright issues.

"We have filed with the bankruptcy court to have the stay lifted on the ongoing District Court case in Utah," Bruce Lowry, director of global public relations for Novell, said. "That would allow the trial to proceed as was originally scheduled. A key issue to be addressed in the trial is the apportionment of the Microsoft and Sun license fees between Novell and SCO."

SCO had been collecting what it calls SCOsource licensing revenues from Microsoft, Sun and others for the rights to use Unix copyrights and intellectual property that SCO alleges it owns and had acquired from Novell.

An August ruling from the court that is overseeing the case issued a pretrial summary ruling that, in effect, negated much of SCO's claims to the Unix copyrights. Novell and SCO have been locked in legal debate since 2003 over what SCO actually acquired from Novell in terms of Unix copyrights.

According to Novell's legal filing to stay SCO's bankruptcy, Novell doesn't want SCO to use Novell's money to stay afloat.

"SCO's post-petition business model cannot continue to be based on Novell's property," Novell's filing states. "If the automatic stay is lifted to allow for the remaining issues in the District Court action to be timely resolved, SCO can turn its focus to formulating a confirmable plan of reorganization, because it will know what resources it has, the size of Novell's claim (almost surely the largest against SCO) and what SCO can and cannot do as a business going forward."

Though the exact size of SCO's payout to Novell is up to the courts to decide, SCO in an SEC filing pegged it at $30 million. In addition to fighting off Novell and other creditors, SCO is also in a fight to stave off NASDAQ delisting, which was brought on in part by its bankruptcy filing.



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