SCO, whose claim to the Linux kernel has touched off a firestorm in the open source realm, is on the verge of bankruptcy, according to court documents filed by legal opponent Novell, several publications reported.

SCO has also failed to pass on more than $26m in licensing fees from Sun Microsystems and Microsoft, as required by terms of a purchase agreement SCO struck with Novell, according to a motion for summary judgment filed in the case on Monday.

"For SCO, bankruptcy is inevitable; it characterizes its assets as merely those 'remaining' and does not rebut Novell's arguments that its bankruptcy is imminent," according to the Novell filing, which Groklaw has posted in its entirety.

Information Week reported that Novell was entitled to $26m of licensing fees SCO received from Sun and Microsoft. Novell attorneys argued the company will be irreparably harmed if it doesn't receive the funds before SCO financially collapses.

In a story carried by DevX.com, SCO spokesman Blake Stowell responded that Novell was spreading FUD and that SCO would report "all aspects of our business" next Wednesday when the company releases fourth-quarter financial results.

SCO rocked the open source world in 2003 when it filed a $1bn lawsuit against IBM claiming the latter company's contributions to Linux violated SCO's intellectual property rights to Unix. After Novell argued it was the rightful owner of Unix, it was sued by SCO. ®

Related stories

• Novell won't pull a SCO (16 August 2007)
• SCO 'disappointed' as shares plunge 70 per cent (13 August 2007)
• Novell owns Unix copyrights after all (11 August 2007)
• SCO tries to grok Pamela Jones (again) (5 April 2007)
• Only 326 lines of code said to be at issue in SCO-IBM flap (17 March 2007)
• Novell and Microsoft swing both ways (13 February 2007)
• You'll have SCO to kick around for another year (30 January 2007)
• IBM didn't destroy SCO code evidence, rules judge (24 January 2007)
• SCO faces new setback in IBM case (19 January 2007)
• Open source is good for the economy: report (15 January 2007)
• Perens: 'Novell is the new SCO' (7 November 2006)
• SCO's Unix and IP revenue dwindles (8 September 2005)
• Novell moves for sudden death in SCO case (2 August 2005)
• SCO knew Linux doesn't infringe - memo (15 July 2005)
• Linux lovers must wait until 2007 for SCO vs IBM showdown (7 July 2005)
• SCO watches Q2 revenue and loss shrink (2 June 2005)
• Analysis SCO, Groklaw and the Monterey mystery that never was (30 April 2005)