U.S. Trustee asks to convert SCO Group bankruptcy case to Chapter 7

By Caroline Salls

Pittsburgh, May 6 - The SCO Group, Inc.'s U.S. Trustee has asked the U.S. Bankruptcy Court for the District of Delaware to convert the company's Chapter 11 bankruptcy case to Chapter 7 for liquidation, according to a Tuesday court filing.

According to the motion filed by acting Region 3 U.S. trustee Roberta A. DeAngelis, SCO's estates are rapidly losing money, and the company has no reasonable chance of rehabilitation.

In addition, DeAngelis said SCO has started a sale or plan of reorganization process three times over the past 21 months, and each of those attempts has failed.

As previously reported, SCO's most recent exclusivity extension request was denied. Judge Kevin Gross said in the order that "the time to seek any extension of the exclusive periods ended as of January 16, 2009, under even the most favorable view toward debtors."

A hearing is scheduled for June 12.

SCO, based in Lindon, Utah, develops UNIX software technology for distributed, embedded and network-based systems. The company filed for bankruptcy on Sept. 14, 2007. Its Chapter 11 case number is 07-11337.

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