May 6, 2009, 6:56 am
Here it is, the moment many of you have been waiting for: the U.S. Trustee’s office, through its counsel Joseph J. McMahon, Jr., has filed a motion in the SCO bankruptcy proceeding to convert the SCO’s Chapter 11 to Chapter 7. And I think this will be your favorite sentence:
Additionally, not only is there no reasonable chance of “rehabilitation” in these cases, the Debtors have tried ‚Äî and failed ‚Äî to liquidate their business in chapter 11.
So what’s left? Dismissal or, more logically, Chapter 7. SCO’s been in Chapter 11 as long as it’s supposed to be, and it’s tried three times to figure out a “rehabilitation” plan, and nothing panned out. Meanwhile, SCO reports a net negative cash flow of more than $3.5 million in its March 2009 report. $3.5 million since the bankruptcy was first filed in September 2007, and that represents cause to switch to Chapter 7, the Trustee’s Office argues, due to “substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation.” That’s $3.5 million that could have been paid to Novell.