U.S. Trustee Moves to Convert SCO Bankruptcy to Chapter 7 (Groklaw)

[Posted May 6, 2009 by corbet]

Remember the SCO group? Groklaw reports that the government trustee has finally given up on the company and moved that its bankruptcy case be switched to chapter 7, which would simply liquidate the company and be done with it. "Incidentally, going into Chapter 7 would not necessarily end the litigation. In fact, it can't on its own. It would be up to the appointed trustee to try to figure out what to do, and the trustee's interest will not dovetail with SCO executives, I'm guessing. For one thing, he'll be wanting to pay the creditors. Like, for example, Novell. And the trustee has no power to terminate the IBM counterclaims. Then there is Red Hat. They are not necessarily willing to drop their claims, since the goal is to establish that there are no legitimate claims against Linux."

U.S. Trustee Moves to Convert SCO Bankruptcy to Chapter 7 (Groklaw)

Posted May 6, 2009 16:54 UTC (Wed) by MisterIO (guest, #36192) [Link] (5 responses)

Greed didn't work for them.

U.S. Trustee Moves to Convert SCO Bankruptcy to Chapter 7 (Groklaw)

Posted May 6, 2009 19:59 UTC (Wed) by brouhaha (subscriber, #1698) [Link] (4 responses)

Unfortunately, it did work quite well for the executives, who made a heck of a lot of money on it as a stock pump-and-dump scheme. That may have been the whole point of it, since I doubt that they were so dumb as to believe that they could really prevail on the merits of the case.

From the executives' point of view the plan would work well in either likely outcome. IBM might have decided to buy them rather than fighting it, in which case they'd personally make a lot of money on the stock, or it might have gone down in flames (as has actually happened), in which case they'd personally make a lot of money on the stock. Where's the downside?

As Joel Bakan and others have observed, corporations are effectively sociopaths.

U.S. Trustee Moves to Convert SCO Bankruptcy to Chapter 7 (Groklaw)

Posted May 6, 2009 20:53 UTC (Wed) by petegn (guest, #847) [Link] (1 responses)

the down side is any decent sensible system would take all monies OFF said exec's so then it would be net LOSS for said execs but of course there is som much crap red tape B******T that nothing will happen and a bunch of TOSS**S will walk out of this very well of indeed and before anyone starts shouting human rights ect what about the rights of the people they have or tried to defraud what about there rights to demand retrebution from said execs strip them of ALL Ill gotten gains with no chance for appeal that is the only way to deal with people like that .

some of you may not agree with this it is people like you that have created this system where literally crime pays and offenders have more legal sway than the people that have been offended against

U.S. Trustee Moves to Convert SCO Bankruptcy to Chapter 7 (Groklaw)

Posted May 6, 2009 21:36 UTC (Wed) by nix (subscriber, #2304) [Link]

This can happen: look up 'piercing the corporate veil'.

It is decidedly rare, but one can hope...

U.S. Trustee Moves to Convert SCO Bankruptcy to Chapter 7 (Groklaw)

Posted May 7, 2009 9:16 UTC (Thu) by tialaramex (subscriber, #21167) [Link]

Corporations are supposed to have a stated purpose. You the people may (through the legislature) forbid a corporation from having a purpose you don't like, and (through the courts) force it to obey its purpose.

If actors (in this case senior executives) betray the purpose of the corporation the court is entitled to investigate them rather than the corporation, the corporation's shield against personal liability only applies to things which were done in the course of the purpose of the corporation.

U.S. Trustee Moves to Convert SCO Bankruptcy to Chapter 7 (Groklaw)

Posted May 7, 2009 13:52 UTC (Thu) by butlerm (subscriber, #13312) [Link]

SCO (as bad as it is) is peanuts compared to the multi-trillion dollar pump
and dump scheme that banking and real estate executives have recently
perpetrated.