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Technology Stocks : SCO Group (SCOX)
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To: tonysee200x who wrote (151)12/9/2006 7:29:43 PM
From: Scott C. Lemon  Read Replies (2) of 239
 
Hello tonysee200x,

From what I have been told by various lawyers - both involved and not involved in the case - is that settlement offers *only* come when the case nears trial. So the game is to push the trial date out more and more when the opponent is burning cash and losing money. You would never offer any settlement if you believe that you can kill the opponent prior to trial.

I don't believe that IBM would ever make offers, unless they had to in order to avoid trial. Now that the trial is delayed until *after* the Novell trial in September 2007, I am concerned about the future of SCOX and the IBM trial due to simple math. If they are losing ~$1-2mm each quarter (http://biz.yahoo.com/e/060913/scox10-q.html) then how long till they burn up their cash-on-hand?

IBM is able to see this public information, and can plan around this.

Lastly, there are two core points to your final paragraph:

1. In only takes *one* claim to "win." Now the judgement might not be too lucrative, however if it is the "right" claim, then it could pay off for SCOX.

2. The key that most people do not remember is that there is a "breach of contract" issue at the core of this ... the Linux code was the evidence of this. There are still a number of other ways that they can attempt to prove the breach occurred ... and if it did, then IBM has been selling/shipping UNIX in breach, and damages could be awarded.

So although the press and news have jumped all over the surface level aspects of this case, I'm not sure that I have *ever* read a really good in-depth legal analysis of the case. (I won't count Groklaw due to the obvious bias of analysis ... :-)

I am not a lawyer ... I have no real inside information about this ... and I just like to play with the extreme cases like this as a complete investment gamble ... ;-)

Scott C. Lemon
the.inevitable.org
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