Business

SCO Gets $100M Valentine

The SCO Group, a software technology and mobile services firm that focuses on Unix-based solutions — but is perhaps best for its high-profile lawsuits against Novell and IBM — has announced a US$100 million cash infusion from Stephen Norris Capital Partners (SNCP) that promises to yank the small Utah-based company out of bankruptcy.

In addition to SNCP, the financing would include SNCP partners from the Middle East, and it comes with a reorganization plan in which SNCP will take a controlling interest in the company — and turn it into a private organization. SCO’s board of directors has unanimously determined that this financing and plan of reorganization is in the best long-term interest of SCO and its subsidiaries, as well as its customers, shareholders, creditors and employees, SCO reported.

‘An Exciting Future’

“Not only will this deal position us to emerge from Chapter 11, but it also marks an exciting future for our business,” noted Jeff Hunsaker, president and chief operating officer of SCO operations. “This significant financial backing is positive news for SCO’s customers, partners and resellers, who continue to request upgrades and rely upon SCO’s Unix services to drive their business forward.”

SNCP has developed a business plan for SCO that includes unveiling new product lines aimed at global customers. This reorganization plan will also let the company see SCO’s legal claims through to their full conclusion, the company said.

“We saw a tremendous investment opportunity in SCO and its vast range of products and services, including many new innovations ready or soon to be ready to be released into the marketplace,” noted Stephen Norris, managing partner for SNCP. “We expect to quickly develop these opportunities, and to stand behind SCO’s existing base of customers and partners.”

Widespread Skepticism

SCO has long asserted through legal claims and lawsuits that Linux infringes on its copyrights, and it’s encountered widespread skepticism from the technology industry as well as the courts. The last major blow to the company came in August of last year when a judge, ruling in the SCO v. Novell case, found that Novell owned the disputed Unix copyrights. The court awarded Novell some summary judgments over various claims and denies SCO’s claims.

A month after that judgment, SCO filed for bankruptcy, and in late 2007 SCO was delisted from the Nasdaq. Finally, earlier this week, the company announced it would lay off about 30 of its 115 employees. After all this, the obvious question is, what assets might SCO have that could be worth more than $100 million?

“They probably believe that they can reverse the judge’s ruling on whether the ownership of the copyrights was required for SCO’s business and thus trigger the copyright transfer to SCO,” Mark Radcliffe, an attorney with DLA Piper and author of the Law & Life: Silicon Valley blog, told LinuxInsider.

“This will be hard, because generally appellate courts respect factual findings of lower courts,” he added.

Rising From the Dead

“There are always margins to be had from the ruins of a wrecked company. Clearly, Norris Capital sees some value in SCO’s future business model, but that value will only be realized outside and apart from any litigation,” noted Jim Zemlin, executive director at The Linux Foundation.

“The SCO litigation has been like a bad horror flick and about as believable. This case has been going through the courts too long, and the facts remain the same. We hope that SCO’s new investment is focused on the future and not rooted in the shock value of an old scary movie,” he added.

4 Comments

  • Alright students, class is in session. I’m going to make this easy

    for everyone. You have all seen the book Where’s Waldo. We’re going

    to play Where’s Norris (Steven Norris).

    I remain shocked and even appalled that the Trustee has not taken

    the time to do this work for us. All this took was a few hours

    searching on the Internet, making a few phone

    calls (I still have several to make), and asking a few people to

    run some errands. Here is the theory: Steve Norris is a broke fake

    and a fee whore (I carefully selected words

    here). See if you can follow the facts and the line of reasoning.

    Of course I encourage anyone out there to offer contrary evidence.

    Steve Norris doesn’t do deals, he lures

    people and companies in and seduces them with the promise of

    capital raising (especially through his contacts in the Gulf). Then

    he quietly slips out and ends up suing or being

    sued.

    The record however will support only one reality; Steve Norris

    sucks huge fees from individuals and companies and doesn’t deliver;

    ever. He was kicked out of Carlyle Group.

    His partners now enjoy a standing on the billionaire list while Mr.

    Norris continues his fee grubbing. He has no partners or friends;

    just fee pimps and fee junkies (his cronies

    that follow him around and prop up the facade–you scratch my back

    I’ll scratch yours). Here follows five or six examples. I’m sure

    there are plenty more. These are the ones

    I have found with very little effort. Norris formed a partnership

    with two or three guys including Dennis Dammerman (past CFO of

    General Electric). They were raising "a fund"

    another Norris specialty that never happens). The partnership

    blew up. A law suit was filed against Norris claiming that he stole

    fees (another partner paid Norris’ travel,

    expenses, and consulting fees; even a Golf Tournament sponsorship).

    Norris never spent a penny of his own money. The deal blew up.

    Norris vanished. Not a dollar was raised.

    The case goes to trial in NYC this month. Norris just lost another

    case at trial in Washington DC last month in which he was suing for

    fees he should have received. Norris

    formed a "partnership" named "Peninsula Partners" with the very

    character who is suing him now; Mark Robbins. The partnership also

    included Robbins’ father-in-law Mr. Ed Davies.

    Norris claimed to be able to raise the money to purchase a ski

    resort. He never did. There are several law suits still active.

    Norris got fees, expenses, but never delivered $1.

    The partnership blew up, a suit followed, another suit followed.

    Law suits surrounding this fiasco are still active.

    Now Norris has at least two other "partnerships;" Gulf Capital

    Partners and Talos Partners. Norris is the "Chairman and Managing

    Partner" of the Gulf Capital company. He is

    listed as just a board member of the second company. A friend of

    mine walked over looking for the Gulf Capital Partners offices.

    There are no offices. I will make a bet; there

    is no office, no "partners," no balance sheet, no board minutes,

    and no deals. There will be no employees, no payroll, no

    accountants licenses, or business registrations.

    The same person I spoke with told me that there was a deal with a

    hotel chain that fell through. Norris claimed to have big money

    lined up in "the Gulf" with some royal family.

    Of course there was no deal. By the way, the deal recently closed

    with another group; not Norris. Rest assured; the only things you

    will find when Gulf Capital blows up is that

    Norris received his fees, expenses, ran around the globe on someone

    else’s credit card, blown up relationships, and law suits. Norris

    also appears as a board member of Talos

    Partners. I have a guess; Norris receives fees, told the other

    partners he would bring deals, money, and relationships (especially

    in the Gulf), and has never delivered a thing.

    It appears that Norris lasts 12-18 months in every deal before they

    discover his con game. Then, they throw the guy out, someone sues

    him or he sues someone (he is a lawyer

    after all). Norris has no friends and no partners. He has broken

    deals, broken relationships, fees, and lawsuits. Searching the

    public records I found at least four recent

    and/or active lawsuits with former "partners." How long do you

    expect his current partnerships will last before they go to the

    next phase of busted relationships, finger

    pointing, and law suits? By the way, I called directory assistance

    in New York for Gulf Capital Partners. No listing. Mr. Trustee, I

    assume you have sent someone to the Gulf

    Capital Partners offices in New York City. Do I dare make another

    bet that there is no office in NYC Mr. Norris? How about a phone

    number? This guy is a fake. I can’t believe the authorities let him

    get away with this.

    So here we are waiting for Steven Norris and Gulf Capital Partners

    to fund SCO? Mark Robbins (the guy with a warrant out for his

    arrest) is tied to Norris at every turn

    including SCO. I sincerely hope that the trustee has done more work

    than I have. I assume the trustee has asked to see Norris’ balance

    sheet, or the balance sheet of Gulf

    Partners. I assume that the trustee has asked Mr. Norris for a

    record of the last deals he has transacted or funded in the last ten

    years. I predict that the game is finally up

    for Norris. The world (thanks to technology) is on to him. His fee

    pimps will quietly disappear (because people will start coming

    after them). Norris won’t be able to get a

    gig in the US. By the way, word has it that his name is mud in the

    Gulf too. The relationship with the royals that he boasts is

    actually a very bitter relationship and may

    have been one of the things that got him ousted at Carlyle. If SCO

    has a prayer it needs someone credible. Norris is not that person.

    I will part with another big bet; that Norris has received fees

    from SCO and/or individuals at SCO. I’ll place a safe bet that if

    you follow the fact trail you will find that

    someone has paid Norris big fees and all his expenses while he flew

    around supposedly working for SCO. Certainly the trustee has asked

    all of these questions. I’m going to

    keep beating the bushes. Where’s Norris? He and his cronies seduce

    people and companies with promises of fund raising, advisory work,

    opening doors to important people, then they

    begin collecting fees and expenses, then they deliver nothing or

    worse things blow up, then they quietly disappear into the shadows

    or they are pushed out), then Norris sues

    someone or the partnership sues him or both. One thing is for sure;

    try to find a surviving Norris "partnership" or friends. Now find

    Norris in the picture.

    Here is something I just found. More to come.

    • Washington Investment Partners, L.L.C., et al. v. Ayman A.

    Boodai, et al.; Ayman A. Boodai, Fahed Boodai, TBC Funding Corp.

    and Global Securities

    House, third-party plaintiffs v. Stephen L. Norris, third-party

    defendant. Case number 2007-CA-000693, filed in District of

    Columbia Superior Court on January 29, 2007.

    The defendants in this action, who also acted as third-party

    plaintiffs in their complaint against Norris, alleged that Norris

    ceased being a principal in Washington

    Investment Partners (“WIP”) in February 2005, and thus his meetings

    with Ayman Boodai’s investment group after that date, where Norris

    was said to be acting on behalf of

    WIP regarding the $91 million purchase of the Transpoint Building

    in Southwest Washington, D.C., were not in good faith. (The

    Transpoint Building was leased by the General

    Services Administration.) Boodai pointed to trial transcripts

    quoting WIP executive Idris Al-Senussi as saying that “Steve was

    going and doing, he just does not agree with

    our policy of doing real estate. He wants to do some other things,

    so he and Mr. Camalier [WIP chairman F. Davis “Davi” Camalier]

    agreed that we split up, from my understanding split up.” Senussi

    later said Norris “moved his stuff” out of EIP’s offices, but did

    not recall the date in the trial transcripts; “maybe 2005, I don’t

    remember,” Senussi said. Boodai said Norris lacked the “decision-

    making” authority to enter into the agreement, and cited Norris’

    own testimony of May 11, 2009, discussing all that he was not

    responsible for (a full transcript was not part of the public case

    file.) Based in part on Norris entering into contracts on WIP’s

    behalf without sufficient authority, Boodai sought to have WIP’s

    claim of punitive damages of $50 million dismissed. Although the

    court granted the Boodai group’s order to dismiss the punitive

    damages – leaving Boodai liable only to pay $636,000 in attorney’s

    fees – the decision noted that Boodai “initially contended that Mr.

    Norris had no authority to enter this [Asset Management Agreement]

    on behalf of WIP but have since abandoned this claim.”

    • Dear ‘Anonymous’:

      Without knowing who you are, or the motivations for your hateful post, it is clear that you are taking the opportunity to string together unrelated "facts", negative spin, hateful allegations and half truths out of context; and at the same time, hiding behind anonymity.

      It is clear that you did not actually speak with any of the parties actually involved in the cases you site, or actually visit the Beverly Hills or Dubai office of Gulf Cap. The Sco Trustee’s financial advisers have indeed visited our LA office. Where did you send you "friend" looking for an office?

      If you did actually consult with any of the parties, you would find that I have never asserted to anyone the ability to "bring" capital from the Gulf. Indeed, I am always careful to point out that while I might have access to capital, in today’s world, each deal must stand on its own merits.

      In that regard, you might consult Dennis Dammerman, whose name you choose to site. It was the onset of the greatest financial crisis since 1929 that required Dammerman, the other partners and I to drop the idea of raising a co -investment fund in 2008, even though we had already secured some commitments for capital. Most of the "speculation" about "Gulf" state capital sources came from other anonymous bloggers at the outset of the Sco transaction. Perhaps, you might have been blogging then as well?

      It is a fact that Gulf parties with whom I have worked over the years have made several billion dollars of profits and, in the case of the real estate deal you site, involving an investor from Kuwait, about $100 million in profits. These are indeed real, undisputed facts.

      Perhaps, you think the case of Novell/IBM will somehow be helped by trying to discredit me. It seems that the US court of appeals and the US Trustee have made independent findings and, at least to this point, Darl McBride has been vindicated in his efforts.

      With respect to Mark Robbins, he is a petty criminal on the run, who deceived even his own family, and brought a suit against innocent parties in the hope of getting "fast cash". We chose to defend our names, as did the Bryan Cave law firm, from baseless allegations.

      Finally, if you are simply seeking to discredit me personally, for whatever reason you may have, if you would like to meet with me in person and make these assertions, I would be happy to meet with you.

      However, I doubt seriously you have the courage to come out into the open.

      Stephen Norris

      • "Darl McBride has been vindicated in his efforts."

        Oh, please. Darl is the laughingstock of the Unix world. Anyone who can make the statement that you made really doesn’t have all the cards in his deck. Check your happy meal – you’re short a few fries!

        I can’t really judge much of the rest of these posts, but Darl has never been vindicated, nor will he ever be. Give it up, dude.

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