SCO Group trustee seeks court approval of $2 million DIP facility

By Caroline Salls

Pittsburgh, Feb. 18 - The SCO Group, Inc.'s Chapter 11 trustee requested court approval to obtain up to $2 million in debtor-in-possession financing from agent and lender Seung Ni Capital Partners, LLC, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

Trustee Edward N. Cahn said Seung Ni Capital is an entity newly formed by SCO's former chairman and largest shareholder Ralph J. Yarro III for the purpose of providing post-bankruptcy financing to the company.

A minimum of $800,000 must be outstanding on the loan at any time, according to the motion.

Proceeds will be used to pay fees and expenses related to the administration of the bankruptcy case, the company's operation and litigation costs.

The facility will mature on the earliest of Oct. 31, 2011, dismissal or conversion of SCO's bankruptcy case and confirmation of a plan of reorganization or liquidation.

Interest will be 14%.

A hearing is scheduled for March 5.

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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