SCO negotiates cap for legal expenses
SCO negotiates cap for legal expenses
The SCO Group, which is involved in a multi faceted legal pursuit of Linux vendors and customers, has signed off on a deal with the two law firms representing the company in its various lawsuits, which caps the amount of money it has to pay for legal representation in return for offering a larger cut of any settlement won to the law firms concerned.
The deal, which was initially announced by SCO's chief financial officer Bert Young during a conference call to announce the company's third quarter results, will allow SCO to limit its legal costs to US$31 million.
In addition to the US$6.8 million it has already plunged into its various legal battles, SCO has paid legal firms Boies, Schiller & Flexner and Kevin McBride and Berger Singerman $12.6 million up front, and will pay them $2 million per quarter for the next six quarters. Any legal costs incurred after the end of the six quarters (with the last quarter commencing Dec 01, 2005) will be met by the legal firms, according to SCO spokesman Blake Stowell.
But it stands to make less from any resulting settlement, with the legal firms' contingency payment, which currently stands at 20 percent of a settlement, having now been increased to between 20 and 33 percent, depending on the size of the settlement.
Should the total amount won be less than $350 million, the law firms will be in line to collect 33 percent, with 25 percent the agreed sum for a recovery of between $350 and $700 million, and 20 percent of a settlement in excess of $700 million.
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