SCO and Chapter 7
May 15, 2009
The U.S. Department of Justice filed a motion on Tuesday to convert SCO Group’s Chapter 11 bankruptcy filing to Chapter 7. As a result, all non-exempt property would be sold off and the proceeds from the sale would be distributed to SCO’s creditors, among them Novell. In making the filing Roberta A. DeAngelis, the acting United States Trustee on the case, cited “continuing loss to or diminution of the debtor’s estates and the absence of a reasonable likelihood of rehabilitation” in her motion, meaning there is little chance that SCO would be able to continue on as a legitimate business once its debts are settled.
Novell believes that SCO has completely failed to move forward with a workable Plan of Reorganization and has significantly depleted the company assets. Novell agrees with the United States Trustee that it is time for an independent evaluation of how to best preserve the estate for the benefit of SCO's creditors and shareholders.
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