SCO vs

By Steven Vaughan-Nichols  |  Posted 2004-07-23 Print this article Print

. BayStar Heats Up Again"> "SCO takes such questions very seriously," Stowell continued, adding that the company stands behind "the accuracy of its public disclosures concerning its SCOsource business." Stowell stated that SCO hadnt lied about these potential revenues to BayStar. Indeed, SCO had specifically "cautioned in its public disclosures, [that] it has limited experience with its SCOsource licensing initiative, and projecting SCOsource revenue is difficult."
BayStar, according to Stowell, wont consider the "repurchase transaction closed until SCO provides BayStar with confidential information supporting the accuracy of SCOs recent public disclosures regarding its SCOsource business."
Despite its financial relationships with BayStar, SCO isnt willing to provide that information to BayStar, he said, "in order to protect the confidential and proprietary nature of the information." In particular, SCO doesnt want to name the developers and companies with which its having licensing discussions, "to avoid fostering speculation regarding its SCOsource business." That said, Stowell concluded in SCOs public statement, that, "SCO believes that the stock repurchase agreement with BayStar is effective and binding." SCO has sent BayStar "a stock certificate representing 2,105,263 shares of SCO common stock" and told the firm that its ready to deliver $13 million in cash needed to complete the deal. Since BayStar is taking SCO to court, BayStar clearly disagrees. Microsoft introduced BayStar to SCO last year. This move has been seen widely as an effort by Microsoft to fuel SCOs Linux lawsuits. Meanwhile, BayStar and the Royal Bank of Canada in October came up with $50 million dollars of capital for SCO. The Canadian bank grew disenchanted with its investment and, in May sold the majority of its preferred stock to BayStar. BayStar, by that time, tried to gain control of SCO. First, BayStar threatened to pull its investment because of SCO had misrepresented its business finances and plans to BayStar. Then, it became clear that rather than simply wanting its funds back, BayStar wanted SCO to focus entirely on its Linux litigation, drop its Unix businesses, and change its management. Read eWEEK.coms Linux & Open Source Topic Center Editor Steven J. Vaughan-Nichols take on this latest tiff between BayStar and SCO. SCO refused to go along with this direction shift. The two companies appeared to be heading for a long, bitter battle over control and finance of SCO when on June 1, SCO and BayStar signed the stock-swap agreement that appeared to settle their differences. Once more BayStar and SCO find themselves at loggerheads and quite possibly on their way to court. "SCOs efforts to repurchase Baystars shares of SCO seem to be an effort to silence one of SCOs most vocal internal critics," said Allonn Levy, an attorney with Hopkins & Carley in San Jose, Calif. "Now, instead of shoring up its defenses, SCOs repurchase plan looks to have simply created a new public battle for SCO to fight." Check out eWEEK.coms Linux & Open Source Center at for the latest open-source news, reviews and analysis.

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Steven J. Vaughan-Nichols is editor at large for Ziff Davis Enterprise. Prior to becoming a technology journalist, Vaughan-Nichols worked at NASA and the Department of Defense on numerous major technological projects. Since then, he's focused on covering the technology and business issues that make a real difference to the people in the industry.

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