SCO is the instigator of one of the most drawn-out and farcical legal battles in the history of the software industry. The Utah-based UNIX vendor claimed that it owned the original SVRX UNIX copyrights and that the open-source Linux operating system contains millions of lines of code that have been misappropriated from UNIX. During the course of the ensuing litigation trainwreck, it became clear that SCO knew from the beginning that it never owned the copyrights and that its own audits found no evidence of infringing code in Linux.

Following the issuance of a legal ruling which declared that Novell was the actual owner of the SVRX copyrights, SCO's stock plummeted. The judge also determined that 95 percent of the SVRX royalties collected by SCO, which gave the company its only profitable year in history, were actually owed to Novell.

SNCP's initial plans to resurrect the company came as a surprise, since SCO presently has virtually nothing of value. As we noted in our previous coverage of the SNCP proposal, SCO's flagship UnixWare product hasn't seen a new release in four years, and SCO acknowledges that UnixWare revenue has suffered a massive drop during that time as a result of competition from Linux. SNCP must have finally figured this out and is now taking a step back from the originally proposed deal.

Novell has become increasingly impatient with SCO's shenanigans during the bankruptcy proceedings. Late last month, Novell filed an objection to SCO's motion to reimburse York Capital for costs associated with drafting a buyout agreement that was never completed. Novell's filing declares that the motion is SCO's "worst and least supported idea yet" and "reflects not sound business judgment, but a total lack of any judgment at all." Novell describes SCO's negotiations with York as "just another really bad deal they have chased in ceaseless pursuit of their dreams of a litigation bonanza."

Noting that this is SCO's third attempt at reorganization, an attorney with the Department of Justice's Trustee Program has told the bankruptcy judge that the DoJ is losing patience too and could demand that the company be handed over to an independent fiduciary for dismantlement if the SNCP deal falls through.