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Novell Might Be Removed From Nasdaq

Novell, the distributor of Linux, was notified by the Nasdaq that it could probably be removed from the stock exchange, and that`s due to the company`s late filing of quarterly results for the period ended July 31. Novell has delayed filing while it performs an internal investigation in its stock compensation practices.

Numerous high-tech companies have come under examination by the Securities and Exchange Commission for the way they accounted for stock options issued to employees as compensation. Novell is planning to appeal the removal notice and demand a hearing before a Nasdaq panel. Therefore, the stock exchange has automatically stayed the delisting pending the panel`s review. The Waltham, Mass., software maker also revealed on Wednesday that Wells Fargo Bank has notified the company that it`s in default on a $600 million bond.

Conditions for the bank-held bond required Novell to file quarterly reports. 60 days were given the company by the bank in order to fix the problem. Novell said it does not believe it is in default, saying the conditions of the bond requires the company to provide its quarterly report to the bondholder within 15 days of submitting the financial statement to the SEC.