SCO fires CEO McBride as it tries to emerge from bankruptcy

Three remaining execs are working closely with Chapter 11 trustees to implement a restructuring plan

Unix software vendor SCO, struggling through bankruptcy and a Unix copyright trial involving Novell, has fired president and CEO, Darl McBride.

SCO "has eliminated the Chief Executive Officer and President positions and consequently terminated Darl McBride," the company reported last week in a filing with the Securities and Exchange Commission. McBride had been CEO and president of SCO since June 2002.

The move and a restructuring come after an operations and cost analysis performed by Edward Cahn, SCO's Chapter 11 Trustee.

Since the CEO position was eliminated, the SCO management team now consists of COO Jeff Hunsaker, CFO Ken Nielsen and general counsel Ryan Tibbitts. The SEC filing says these three executives "will continue to work closely with the Chapter 11 Trustee and his advisors to implement the restructuring plan, move the intellectual property litigation [against Novell] forward … and emerge from Chapter 11 bankruptcy."

SCO says it will finalize details of the restructuring and reach "cash flow breakeven for core operations" within a month. A "modest reduction in SCO's workforce" and other changes will help improve SCO's financial position, the company says. SCO is attempting to raise additional funding and sell "non-core assets."

"These actions, while difficult, are essential to SCO becoming a more agile and efficient company, not just for this year, but for years to come," Hunsaker says in the SEC filing. "This restructuring plan reinforces SCO's ability to continue to sell and support its products while servicing the needs of our customers and partners on a worldwide basis through the stabilization of our financial situation."

SCO filed for Chapter 11 bankruptcy protection on Sept. 14, 2008. The company is also involved in an ongoing legal battle against competitor Novell over the rights to Unix technology.

In 2007, a U.S. District Court judge ruled that Novell was the owner of Unix and UnixWare copyrights, but that decision was overturned in August of this year. As a result, Novell and SCO are heading to a trial.

In 2003, SCO attempted to sue IBM for $1 billion in another Unix-related matter. The case was closed in 2007 but may be reopened after SCO emerges from bankruptcy. Perhaps tellingly, last week's filing with the SEC says that SCO plans to "pursue litigation against, among others, IBM and Novell."

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Jon Brodkin

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