The off-again, on-again relationship between BayStar Capital and the
SCO Group took a decided turn to the off-again after the creditor
announced it would file a lawsuit against the Unix software company
Friday.
In a tersely worded press release, BayStar officials stated they would
get a judge to rule on a dispute between the two companies over an
unreleased dispute over terms of SCO’s stock
repurchase plan filed May 31.
Earlier Friday, the public spat started with SCO releasing a statement
claiming it considered the repurchase agreement closed, converting
40,000 Series A-1 shares, or equity shares, to a little more than 2.1
million common stock shares. SCO officials also said they had the $13
million in cash that was part of the deal.
BayStar’s statement didn’t reveal the nature of the dispute, and
officials were unavailable for comment at press time, but SCO’s press
release provides a glimpse. According to SCO, BayStar is holding up
the transfer “pending resolution of claims by BayStar that SCO’s
recent public statements regarding SCOsource licensing opportunities
are inconsistent with statements previously made by SCO to
representatives of BayStar.”
SCOsource licensing is a program to collect the revenues it gains, or
tries to gain, from companies licensing its Unix System V copyrighted
source code. Currently, the company is in the middle of a $5
billion lawsuit with IBM , maintaining that a
significant portion of its Unix code was illegally used to bolster the
Linux kernel source code, courtesy of IBM engineers.
While the odds against the company winning a legal battle continue to
mount, SCO executives have remained optimistic about their chances and
plan to charge Linux users a licensing fee if they win.
Since the lawsuit began last year, only one
company has publicly announced it paid for SCOsource licensing for
its Linux OS line of servers, EV1servers.net. This time last year,
Microsoft and Sun Microsystems
paid for Unix licenses from SCO.
According to SCO’s Friday release, BayStar wants confidential
information surrounding SCOsource licensing plans as the wording seems
to indicate BayStar was led to believe there would be more revenue on
the quarterly filing.
“SCO takes such questions very seriously and reaffirms the accuracy of
its public disclosures concerning its SCOsource business and confirms
its belief that such disclosures are not inconsistent with any
confidential statements previously made to BayStar,” the release
reads.
BayStar was one of two agencies last year who invested $50
million in SCO to help the company fund its legal fight against
IBM, as well as separate lawsuits against Linux distributor Red Hat
and Novell
and customers
AutoZone and DaimlerChrysler.
Earlier this week, SCO essentially lost
its case against DaimlerChrysler Wednesday after a judge threw out
all charges except one in a Michigan district court.
In April, BayStar tried to put a curb on some of the more outlandish
public statements made by senior SCO executives, going so far as threatening
to demand its investment returned for breach of contract.
The Royal Bank of Canada, BayStar’s investment partner, dropped
out in May, converting 10,000 equity shares (valued at $1,000
apiece) into common shares and selling the remaining 20,000 equity
shares to BayStar.
Last month, BayStar officials did a turnabout and said they were happy
with SCO activities, and planned to sell back its 40,000 equity
shares.
