Novell: SCO insolvency 'imminent, inevitable'

Novell has claimed that The SCO Group, the licensing and consulting firm conducting various legal campaigns over the Linux operating system, is about to go bankrupt.

In a court filing reported this week by legal Web site Groklaw, Novell claimed that SCO should pay it almost all of the Unix licensing revenue it has received from Sun Microsystems and Microsoft. This revenue amounts to almost $26 million, and was earned by SCO when it sold Unix licenses to Sun and Microsoft in 2003.

This revenue helped SCO to mount a legal battle in support of its claims that IBM violated SCO's intellectual property by including proprietary code from Unix--on which SCO claims copyright--in Linux.

Novell, though, argues that it is owed that revenue. In 1995, it transferred Unix and UnixWare to Santa Cruz Operations (now SCO) under a deal called the Asset Purchase Agreement (APA). The deal stated that SCO would hand over 95 percent of all revenue it received from SVRX (Unix System V) license agreements.

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