SCO reorganization proposed

The bankrupt company plans to sell off its OpenServer and mobile businesses

As part of a proposed reorganization following its bankruptcy filing, SCO plans a public auction of its mobile business and its Unix OpenServer business, the company said on Monday.

Through the auction, SCO plans to secure additional operating funds in the two lines of business, believing that the auction will maximize the value of an asset sale and ensure ongoing development of the businesses. Several investment groups have expressed interest in acquiring the assets via public auction, SCO said.

"The auction, we believe, is the best approach for us to move forward and also to exit bankruptcy," said Jeff Hunsaker, president and COO of SCO Operations. Should the auction not produce any buyers, the company plans to continue with the two product lines. Featured in the mobile business is SCO Mobile Server, which is for mobile application development. It is to be renamed SCO Cloud Server.

The auction process is expected to ensure that future revenue from the OpenServer and mobile businesses stays with those assets and provides an uninterrupted path forward for customers, products, and employees, SCO said. The minimum bid for the two businesses is approximately US$6 million, although each could be purchased separately, Hunsaker said.

The company had filed for Chapter 11 bankruptcy protection in 2007 as its core Unix business declined in the wake of the rise of Linux. The company also incurred millions of dollars in legal fees suing IBM over Big Blue's support of Linux, charging misappropriation of trade secrets and unfair competition.

A judge in August 2007 ruled that SCO was not even the owner of UnixWare and Unix copyrights, but that Novell, who SCO also sued, was. SCO has appealed that ruling and looks to continue its legal claims.

SCO plans to return to a federal bankruptcy court in Delaware on February 22 seeking approval of its reorganization plan.

SCO in 2009 plans to ship its SCO Unix Virtual product lines for VMware and Huper-V, which allow legacy SCO applications to run on modern hardware. Additional plans call for SCO to soon offer iPhone versions of its FCmobilelife application for personal productivity and the FCtasks application for task management. The company also owns UnixWare technology.

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Paul Krill

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