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BayStar to Seek Declaratory Judgment Against SCO
Friday, July 23 2004 @ 03:25 PM EDT

Yup. It's a lawsuit. BayStar has put out its own press release contradicting SCO's and announcing it will seek a declaratory judgment against SCO:

"Baystar Capital Announces Repurchase Transaction With the SCO Group, Inc. Has Not Closed Friday July 23, 1:56 pm ET

SAN FRANCISCO, July 23 /PRNewswire-FirstCall/ -- BayStar Capital today announced that, despite a prior announcement by The SCO Group, Inc. (Nasdaq: SCOX - News) to the contrary, the transactions contemplated by the Stock Repurchase Agreement by and between BayStar and SCO, dated as of May 31, 2004, have not closed due to an unresolved dispute between the parties. BayStar intends to file an action requesting a declaratory judgment with respect to its rights under the Stock Repurchase Agreement. Until a final determination is made by the court, BayStar maintains its position as a Series A-1 Preferred stockholder of SCO."

Ah. You reap what you sow. How charming. Thou Shalt Not Mess With Pure Financial Animals' Money.


  


BayStar to Seek Declaratory Judgment Against SCO | 273 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here
Authored by: winnetuxet on Friday, July 23 2004 @ 03:31 PM EDT
thanks!

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: Anonymous on Friday, July 23 2004 @ 03:32 PM EDT
Wouldn't BayStar end up spending more money on the litigation than they will
receive from SCO? Since they are already 'abandoning ship' why would they stick
around waiting to jump? By the time this could be resolved, SCO could,
hopefully, be a thing of the past. BayStar without a cent.

[ Reply to This | # ]

OT here, please
Authored by: Anonymous on Friday, July 23 2004 @ 03:33 PM EDT
--Bill P

[ Reply to This | # ]

OT, Trolls and Darl Jokes
Authored by: winnetuxet on Friday, July 23 2004 @ 03:33 PM EDT
Right here

[ Reply to This | # ]

SCO Bankrupcy Question
Authored by: Anonymous on Friday, July 23 2004 @ 03:37 PM EDT
Just curious. IIRC Baystar said that they supported SCO's suing of various
companies to "protect" their IP. If SCO wound up folding (from the
IBM suit (or just no money)) before this Baystar thing settled, would Baystar be
able to lay claim to SCO's IP?

[ Reply to This | # ]

SCOX went plop
Authored by: Anonymous on Friday, July 23 2004 @ 03:39 PM EDT
SCOX (the stock of SCOG) went plop shortly after the 1:56 EDT release of the
Baystar action, and has flatlined at 4.20 ever since. There's about twenty
minutes left of this week at the market.

--Bill P

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: Toon Moene on Friday, July 23 2004 @ 03:42 PM EDT
> You reap what you sow.

If we're going biblical over it, wouldn't a more applicable quote be Matthew
22:21 ?

---
Toon Moene (A GNU Fortran maintainer and physicist at large)

[ Reply to This | # ]

SCO being funny in describing BayStar's position
Authored by: Anonymous on Friday, July 23 2004 @ 03:43 PM EDT
Posted under last story, reposted here, sorry for duplication

I think this is important, as it IMHO shows SCO is not being entirely honest about the nature of the dispute with BayStar (big surprise there!)

--

Here's two paragraphs in SCO's press release.

I think you will find that it's not entirely self-consistent, and attempts to re-spin BayStar's claim away from what it really is.
BayStar has notified SCO that it is BayStar's position that the repurchase transaction has not closed, 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. 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. As SCO previously has cautioned in its public disclosures, it has limited experience with its SCOsource licensing initiative, and projecting SCOsource revenue is difficult and subject to numerous risks and uncertainties.

BayStar has also claimed that it will not consider the repurchase transaction closed until SCO provides BayStar with confidential information supporting the accuracy of SCO's recent public disclosures regarding its SCOsource business. SCO has declined to provide the SCOsource information requested by BayStar in order to protect the confidential and proprietary nature of the information and the names of the companies engaged in SCOsource licensing discussions and to avoid fostering speculation regarding its SCOsource business.
Let's go thru that sentence by sentence...
BayStar has notified SCO that it is BayStar's position that the repurchase transaction has not closed, 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.
i.e. 1. BayStar says SCO's recent public statements are inconsistent with previously made non-public statements.
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
i.e. 2. SCO say its public statements are accurate, and believes its public statements are consistent with its non-public statements.
As SCO previously has cautioned in its public disclosures, it has limited experience with its SCOsource licensing initiative, and projecting SCOsource revenue is difficult and subject to numerous risks and uncertainties.
i.e. 3. But SCO isn't really too sure about the SCOsource business in general
BayStar has also claimed that it will not consider the repurchase transaction closed until SCO provides BayStar with confidential information supporting the accuracy of SCO's recent public disclosures regarding its SCOsource business.
i.e. 4. According to SCO, BayStar is requesting proof of SCO's recent public statements



Well, if you look at point #1, it does NOT seem to me that BayStar is requesting proof of "SCO's recent public disclosures" (SCO's claim in point #4).

It seems far more likely, that BayStar is asking why we were promised something in private that is so very different than from what your SCOsource results ("public disclosures") turned out to be.


Quatermass
IANAL IMHO

[ Reply to This | # ]

Poor SCO Stockholders (sarcasm)
Authored by: Scorpio on Friday, July 23 2004 @ 03:45 PM EDT
Gee, this sounds like Baystar is saying that SCO lies to people, including their
stockholders and the press. That isn't very nice to say!

Why, this could get the SEC involved.

And SCO would be in a real load of trouble if the evidence becomes public.

This made my weekend.

[ Reply to This | # ]

  • SCO Lie? - Authored by: Anonymous on Friday, July 23 2004 @ 04:18 PM EDT
  • Lie... The very idea - Authored by: Anonymous on Monday, July 26 2004 @ 08:06 AM EDT
BayStar to Seek Declaratory Judgment Against SCO
Authored by: John M. Horn on Friday, July 23 2004 @ 03:45 PM EDT

*Holding palm to forehead* Hhhmmmmm... I see new lows in SCO's stock, much
bemoaning by Darls and Blakes and finally, an actual reason to pay attorneys to
litigate - in a last ditch struggle to survive.

Goodbye SCOX, the end will soon be at hand...

John Horn

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: Nick_UK on Friday, July 23 2004 @ 03:47 PM EDT

Any people here speak English, and can actually read this stuff?

I cannot read stuff like this

To me, legal documents is like reading poorly written code. You read one paragraph and absorb it, but then the next seems to contradict it (or might) - or the 'go to statement' that totally takes you off to a new sub-routine - so you go back, and read again... ad infinitum.

Nick

[ Reply to This | # ]

Delicious!
Authored by: Simon G Best on Friday, July 23 2004 @ 03:47 PM EDT

This is delicious! BayStar and The SCO Group fighting each other! The SCO Group seem to be having a really bad week.

---
Open and Honest - Open Source

[ Reply to This | # ]

Um, don't you have to sue first?
Authored by: sphealey on Friday, July 23 2004 @ 03:47 PM EDT
Don't you have to file a lawsuit BEFORE you ask for declatory judgement?

sPh

[ Reply to This | # ]

Boies 1, Baystar 0, SCO 0
Authored by: Anonymous on Friday, July 23 2004 @ 03:59 PM EDT
This fiaSCO is a perpetual wet dream for the Boies law firm. How many lawsuits
can you generate over the equivalent of a simple card bluff in poker? God, these
guys must love McBride!

[ Reply to This | # ]

Oh, my!
Authored by: jbeadle on Friday, July 23 2004 @ 04:02 PM EDT
And in just a little over a week, it's time for SCOForum...

Just gotta love the impeccable timing of it all, don't you?

-jb

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: Anonymous on Friday, July 23 2004 @ 04:03 PM EDT
I know this is sounding like a tin foil hat brigade comment. But is there any
way that this could be used as an attempt to fast track a case to establish ANY
sort of precedent involving SCOG 'owning' IP? For a second, follow the dots:

- Baystar files for summary judgement on contract.

- SCOG is forced to prove they felt their claims were valid in defending against
the complaint.

- The issue is a contract claim in state court.

- Because they have to show they felt at the time that their claims were valid,
the Novell issues remain separate and out of the discussion.

- SCOG somehow manages to draw, or even win against Baystar.

- Darl and Blake trumpet a legal precedent that SCOG is the rightful owner to
UNIX because a state court accepted their argument that they acted in good faith
with Baystar.

Worse, could this drive SCOG shares low enough to delist and Canopy/Yarrow to
try to take it private?

[ Reply to This | # ]

DON'T believe it, it is a SCAM
Authored by: Anonymous on Friday, July 23 2004 @ 04:06 PM EDT
BayStar ** MUST ** do this! Otherwise, IBM and the others will be able to get
the information about the link to Microsoft. They ** ONLY ** way to keep that
information secret (and protect Bill) is to get it wrapped up in a lawsuit with
"confidential" terms and a confidentiality agreement.

This has NOTHING to do with getting back the money they were instructed to
chunnel to SCO, IYAM.

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: pfusco on Friday, July 23 2004 @ 04:09 PM EDT
*pulls out the king sized bean bag chair and a bucket full of iced beer
(killians red by choice) and the bbq... sets up to watch the fun over the next
few weeks.

---
only the soul matters in the end

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: Anonymous on Friday, July 23 2004 @ 04:15 PM EDT
Isn't this is kind of situation that leaves the executives of SCO looking for a
way out of jail?

I mean, if one of their biggest shareholders say they were lied to, and,
assuming SCO go bankrupt, subsequently lose their money, aren't SCO's executives
personnally liable (a la Enron and Martha Stewart) for their misstatements
(along with their insider trading)?

[ Reply to This | # ]

Result of the Napster lawsuits?
Authored by: whoever57 on Friday, July 23 2004 @ 04:23 PM EDT
Is this a result of the recent lawsuits against Napster's investors? Baystar is
perhaps afraid that they will be on the receiving end of a lawsuit from IBM and
they are doing this to distance themselves? ie. Baystar wants a court to affirm
that SCO lied to Baystar, hence Baystar was not a backer, but a victim?

The question is: does filing meritless lawsuits constitute an analagous kind of
illegal activity to that over which Napster was sued?

[ Reply to This | # ]

The horror
Authored by: kberrien on Friday, July 23 2004 @ 04:59 PM EDT
"Oh the Discovery, the discovery, the discovery!"
- in tone of Colonel Kurtz (the horror).

The discovery should be very very interesting in all this, what did SCO actually
tell investors vs. what did they really know.

And perhaps, a defense for SCO would be, you knew all along (as a proxy) this
wasn't for real - and seek MS connection discovery, to help prove the proxy
theory. If the tinfoil hatters are correct about Baystars suing to protect M$,
best way to bring Baystar to the table is to dig too deep.

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: blacklight on Friday, July 23 2004 @ 04:59 PM EDT
"BayStar intends to file an action requesting a declaratory judgment with respect to its rights under the Stock Repurchase Agreement. Until a final determination is made by the court, BayStar maintains its position as a Series A-1 Preferred stockholder of SCO." [My italics]

Intent is cheap. I am not reacting until I see Baystar flloww through and execute - not that a dispute between two greedy thugs need concern us.

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: frk3 on Friday, July 23 2004 @ 05:01 PM EDT

This is funny, because I suspect that, the same "public statements" about "mountains of code", "millions of lines of code", "go to court with what we have now", "team of MIT rocket scientists" and the dreaded "obfuscated code" were the same exact things they gave as "confidential" information to BayStar, as well as a song and dance about IBM buying them out or being forced to pay TSG billllliiiioooons of dollars as part of TSG's win in court.

Course, BayStar, TSG and others know that this was all a setup "investment" deal to begin with, so BayStar has to make it look like it wasn't by appearing to take TSG to the mat, so to speak. It's all a bunch of horse puckey.

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: Greebo on Friday, July 23 2004 @ 05:05 PM EDT
Anyone noticed this? The press release from Baystar went out at 1.56pm, and if you look at the 1 day SCOX chart look what happens at 2pm!

I can't write anymore. Beer and celebration is awaiting :)

Greebo

---
-----------------------------------------
Recent Linux Convert and Scared Cat Owner

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: Anonymous on Friday, July 23 2004 @ 05:07 PM EDT
If BayStar ends up with SCO's assets after all this (including, presumably their
IP, whatever that is), could that have an impact on the IBM case-- leaving it
unconcluded, for example, so the question of IP infringements are left up in the
air?

[ Reply to This | # ]

Baytar was bamboozled
Authored by: Anonymous on Friday, July 23 2004 @ 05:38 PM EDT
From today's SCO Group press release:
"As SCO previously has cautioned in its public disclosures, it has limited experience with its SCOsource licensing initiative, and projecting SCOsource revenue is difficult and subject to numerous risks and uncertainties."
Uh-huh... sure... we all believe you... but did you tell that to Baystar during your sales pitch? Did you tell them anything near it, or was it "we'll all be beel-ionairres!!! (with pinky to lip)"

I have a hard time believing that they were anything but disingenuous. As a matter of fact, I am convinced that when they got Larry Goldfarb in their conference room, they tag-teamed him with colorful lies and concocted exaggerations, all wonderfully choreographed beforehand.

It comes down to this: if you have ever been shammed, or scammed, you build up an automatic defense to being shammed again. I, unfortunately, have been shammed before - and I know the smell of a rat. Apparently Larry, living under his parasol by the poolside, wasn't smart enough to catch on to the sham. His sheltered lifestyle of BBC cigar clubs and Spago dinners made him a perfect target for the professional liars at The SCO Group.

Personally, I don't care if he recovers his money. The SCO Group has done enough to ensure their own timely demise. Baystar possibly winning won't do a thing to accelerate The SCO Group's demise. They have Baystar's money until they throw the last dollar in the fireplace (fireplace = Boies).

[ Reply to This | # ]

Looks like...
Authored by: inode_buddha on Friday, July 23 2004 @ 06:31 PM EDT
Somebody's Karma ran over their dogma.

---
"When we speak of free software, we are referring to freedom, not price." --
Richard M. Stallman

[ Reply to This | # ]

Say what, TSCOG?
Authored by: AllParadox on Friday, July 23 2004 @ 06:32 PM EDT
There must be just a whole lot I do not understand here (then again maybe not,
this is TSG).

I have participated in a number of closings for businesses. Everybody gets
together in a room, shakes hands (or not), we pull out the documents including
the releases, everybody re-reads them for the umpteenth time, we hand them
around, people sign in the appropriate places, money, in the form of certified
checks, changes hands, receipts are acknowledged, everybody gets a copy of
everything, and everyone leaves. All done.

If you have a bilateral contract (a promise for a promise) to resolve an issue,
the closing is not automatic, and neither party can force the issue. If the
parties cannot come to a resolution of the contract, then they go to court, and
the court will force the issue, on the parties' behalf.

If you are a corporation whose shares are publicly traded, you have certain
"publication" reporting obligations. In simple terms, you must
promptly keep the public informed about anything that is a substantial change.


The way I understand it, you do not announce things that have not happened, like
closings that substantially change the share structure of the corporation.

I find it incomprehensible that TSG would announce a closing having been
completed last Wednesday, but that they remain ready, willing, and able to
deliver the remaining $13,000,000US, if someone would just tell them where to
send the money. If they are still "ready, willing, and able", then
there was no closing.

As I said, I may not understand, but I suspect that if the SEC was not paying
close attention before, they are now.

Do these people *want* a cell down the block from Martha?

---
All is paradox: I no longer practice law, so this is just another layman's
opinion. For a Real Legal Opinion, buy one from a licensed Attorney

[ Reply to This | # ]

Hyenas!
Authored by: John on Friday, July 23 2004 @ 06:46 PM EDT
On the discovery channel, it's always fun watching hyenas fighting each other
over a lump of rotten meat.

Now I can also watch TSG and Baystar act likewise! What fun!!! :^)

---
JJJ

[ Reply to This | # ]

BayStar could be going after some Microsoft money themselves
Authored by: Anonymous on Friday, July 23 2004 @ 07:01 PM EDT
Since Microsoft brokered the deal, Baystar could claim that the liability
extends to Redmond. They could basically blackmail Gates for some money. Pay up,
or we can keep you in the headlines indefinitely.

I see no reason Baystar would have to remain loyal to Redmond.

[ Reply to This | # ]

BayStar's Actions Are Difficult to Understand
Authored by: seeks2know on Friday, July 23 2004 @ 07:17 PM EDT
I am getting a headache trying to understand the actions that Baystar has taken
to date. Every time I think I understand why they have done what they have
done, they do something else unexpected.

For example:

First of Baystar invests millions in The SCO Group via PIPE transaction. Why, I
ask? PIPEs are intended to keep investors secret. Microsoft would sure like to
fund this and stay secret. Baystar must be a front for Microsoft.

Of course, this is confirmed when the Anderer communiqués come to light.

Next, when the stock begins to tank. Baystar decides to bail. If this were
just Microsoft's money, why would they care? Microsoft can afford to throw away
this much on anti-Linux FUD. Why? Why? My guess is that Baystar invested other
people's money too. So they need to recover some funds - they can't let it all
go down the drain.

Then, Baystar increases their investment in SCO by buying most of RBC's
preferred A-1 shares. Why would they do that? Well, maybe Microsoft pumped in
some additional funds and agreed to keep Baystar whole no matter what happens.
This way Microsoft can be assured that SCO keeps the funds it needs for
litigation.

Next, Baystar agreed to cash out for $13M and 2 million common shares. Now, if
Microsoft was going to keep Baystar whole, why would they do that??? (As I
adjust my tinfoil hat a little tighter...) Well, this still leaves SCO with
enough cash to survive until Longhorn is born - and it let's Baystar out now.
After all, the SEC is now paying lots of attention to SCO and company - and
Baystar needs to protect their reputation.

So after all this time waiting for the SEC to approve the SCO/Baystar agreement,
Baystar suddenly bolts from the agreement and publicly threatens SCO with
litigation. What is going on? After making a larger and more sensitive tinfoil
hat, I believe that Baystar was relying on converting the 2 million shares of
common stock into cash at a future date.

Remember their strong recommendations to SCO to dump its UNIX products and focus
on litigation? I think they really believed that the SCO litigation had real
merit. I believe they truly thought the SCOsource revenue stream had merit.
And suddenly, they realize that everything that they were told from the
beginning was a lie.

As a result, they have lost a lot of money and, more so, have had their
reputation publicly sullied and, even more important, may be implicated in SEC
violations. Now they are angry and intend to get even.

I believe this is no longer about recovering their money. (Although that's
still important, too.) This is about revenge - and restoring their reputation.


Baystar is claiming to the SEC and the public that they are a SCO victim. It is
really important that they not be viewed as a partner.

I take this as a sign that SCO's SEC problems are serious and imminent.


---
There is but one straight course, and that is to seek truth and pursue it
steadily."
-- George Washington

[ Reply to This | # ]

I'm not a phsychologist.
Authored by: Brian S. on Friday, July 23 2004 @ 08:53 PM EDT
SCOG, Baystar and ???

The team is unravelling and it will only get worse, unless of course they have a
coach who will take them through to the end of the season.
This is absolute classic behavior for a team which was convinced that it could
beat all comers but failed when asked the question. I don't want to take the
sporting analogy too far, but until SCOG and Baystar show otherwise, I can't see
why not.
Teams work when all the members are convinced of their rightness. This attitude
does and will continue to be the basis for sporting greatness. You have to
believe you're right.
When a great sports team suffers a loss it does not seek scapegoats, it looks
for a collective reason as to why it could have done better.
SCOG and their accomplices are doomed. Quarraling amongst themselves is the way
to sure defeat. They stand no chance. Kick them whilst they're down.

Brian S.

[ Reply to This | # ]

Baystar v SCO and what they both show...
Authored by: brian on Friday, July 23 2004 @ 09:49 PM EDT
In the article PJ used it says this blurb at the end...

"The SCO Group (Nasdaq: SCOX - News) helps millions of
customers in more than 82 countries to grow their
businesses everyday. Headquartered in Lindon, Utah, SCO
has a worldwide network of more than 11,000 resellers and
4,000 developers. SCO Global Services provides reliable
localized support and services to partners and customers.
For more information on SCO products and services, visit
http://www.sco.com."

Well that sounded very familiar to me since of course that
came from SCO themselves now what does Baystar Capital say
about SCO (again, provided by SCO)?
Well, I went there to see...

"The SCO Group, Inc. is a provider of reliable,
cost-effective UNIX operating systems and software
products and solutions to small and medium-sized business
markets. SCO solutions include UNIX platforms, messaging,
authentication, e-business tools, and services that
include technical support, education, consulting, and
solution provider support programs. The Company's
SCOsource division was formed in January 2003 to review
and enforce its UNIX intellectual property rights. It is
also developing Web-based applications, products, and
services to facilitate connections to the Internet for its
customers. SCO has a worldwide presence with
representation in 82 countries. This infrastructure
enables SCO to provide local support and dependable
solutions to businesses around the world. Additionally,
SCO has a channel of more than 11,000 solution providers,
a developer network of nearly 8,000, thousands of direct
account customers, and an installed base of more than two
million systems."

Notice the lack of mention in the first article of
SCOSource but it is prominant in the second. Another thing
I noticed was a drop in "developers" from 8000 to
4000.Kind of telling isn't it...

B.

---
#ifndef IANAL
#define IANAL
#endif

[ Reply to This | # ]

This concerns me
Authored by: Anonymous on Friday, July 23 2004 @ 10:07 PM EDT
Let’s assume for a moment that the Baystar suit forces SCO to declare
bankruptcy.

What happens to the Unix IP ownership that is currently in question? (not in my
mind)

The Novell case, brought by SCO, was not about IP, it was about slander.

The question about who owns the UNIX IP is still open to debate, if I understand
things correctly. (and I may not).

Could this be a ploy to force SCO to declare bankruptcy, Transfer all ownership
of claims to Baystar (aka MS) and force this debate (in the courts) to continue
longer?

Microsoft has deeper pockets then Novell, and as I see things, the SCO/Novell
debate (who owns IP of Unix) will settle everything.

If Novell owns the IP of Unix that SCO claims they own then all cases about
SCO/Linux would not be valid.

If SCO goes under before this question is answered, and someone like MS thru
Baystar decides to take this on then I think we are in for the long haul.

I must be missing something (IANAL). I am a simple engineer that solves problems
so any advice would be helpful.









[ Reply to This | # ]

The Players and their motives
Authored by: blang on Friday, July 23 2004 @ 10:29 PM EDT
From yahoo board

Given recent events as well as analysis of the players and their motives, the
only logial conclusion is that next step is SCO/Baystar faceoff leading to
Darl's firing before it ends up in court, and a Baystar puppet taking over the
show: making a worse mess out of the case than Darl ever did. Should be
entertaining.


The players and their motives
by: notmrnice (33/M/US)
Long-Term Sentiment: Strong Sell 07/23/04 03:36 pm
Msg: 157920 of 158084

1. Canopy, Yarro, McBride,
Know IBM case is a bust.
Main goal: make it last, while maintaining a high stock price so they can dump
their shares. Have been authorized to do on or off market share buybacks which
moves teh cash from teh corporation to their pockets.

2. Boies
Knows the law, but is ignorant about the facts of these cases. Probably did a
Tenet and told Baystar that case is a "slam dunk". Competes with
Canopy and Yarro to unload shares and raid the corporation. Also received some
20% kickback of the financing deal with Baystar/RBC.
Goal: Shine in court and cash in big
Problem: Overextended his law firm's resources - evidenced by lots of sloppy
work in SCOX case.


3. Baystar
Knows little about law, and even less about this case. Were briefed by Boies,
and seem to think the IBM lottery might pay off. Does not care about the stock
price, or SCOX core business. Has said publicly they wanted management changes
and to pursue litigation more agressively. Critizised Darl's frequent PR
stunts.
Goal: Get their $50 mill lottery ticket in play and cash in their $3 billion.
Win or bust. $50 mill is chickenscratch to them.

4. Microsoft
Was heavily involved earlier. Even paid a token license, and referred Baystar.
MSFT is smart, and smelled a skunk, and has been runnning away from SCOX ever
since.
Goal: Linux FUD, while staying below DOJ radar.

5. Sun
Bought what appears to be a genuine license for x86 drivers. But didn't miss a
beat in getting on the Linux FUD bandwagon.
Goal: Survival

6. Skiba, Royce, Cohen, RBC's mystery client
Lots of speculators wanted a piece of this action. SCOX has singlehandedly
turned Royce's smallcap value fund into a real lemon. Well deserved.
Goal: Money
Reward: Less Money

7. IBM, RedHat, the rest of the world
Goal: Taking care of business. Protect Linux IP.

[ Reply to This | # ]

I don't care who wins...
Authored by: bobn on Friday, July 23 2004 @ 10:34 PM EDT
as long as at least one of these scumbags loses.

Long term, even if Uncle Billy has somehow made Baystar whole on this deal, they still come out of this looking mighty stupid.

---
IRC: irc://irc.fdfnet.net/groklaw
the groklaw channels in IRC are not affiliated with, and not endorsed by, either GrokLaw.net or PJ.

[ Reply to This | # ]

Why the rats like McBride
Authored by: Anonymous on Friday, July 23 2004 @ 11:25 PM EDT
This is a misdirection. If I were an owner of the Noorda Family Trust, I
would be very worried now.

McBride's history is to ruin a business operation while he makes millions
or sues for millions.

Young looks to be a ringer.

The Lawyers are getting huge sums of money and have promises of billions
in the unlikely event that SCOX wins everything.

The rats are lined up for a percentage of the massive and very public
deals, including with Microsoft. Any hungry rat would be very willing to
help out.

Then, there it is. The Noorda fortune. IBM, BayStar, unamed parties, and
the rats are eyeing it. McBride, Yarro, and the Lawyers are scooping it up.

[ Reply to This | # ]

"The Sting"
Authored by: Anonymous on Saturday, July 24 2004 @ 04:22 PM EDT
Combining two of my yahoo posts:

---

There were these two small time, small town racketeers, Ralph and Darl. Then a
real big time, big city con man came by. He flattered them and egged them on to
run their scam against the biggest, baddest, most street-wise people around,
encouraging them with some extra cash for their small grub stake and egging them
on. Meanwhile he got his investment back by giving SCOX an atomic wedgie
(shorting it over their heads!) all the while they were digging a hole beneath
themselves.

Now the scam has been exposed with the DC precedent, and Larry
"fingers" Goldfarb is walking away with the cash leaving our heros
Ralph and Darl standing in their underwear in the street, scratching themselves
with a purplexed look on their faces while waiting for the cops to arrive.

I should be PO'd at BS for being an "enabler" of this scam, but d*,
this is a work of art. I'm awed. BS may or may not face fines from the SEC but
Ralph and Darl will face stockholder lawsuits, reprisals from IBM, RH and Novell
and possibly criminal prosecution.

My only real question now is did Anderer set up Darl or was he just a pigeon who
led to the mark?

---

Maybe the plot isn't that clear yet.

AFAICS neither BS nor SCOX are *clearly* liable for insider or other regulatory
violations in re the BS deal.

As I see it:

At the time of the agreement SCOX provided BS with positive assertions that they
knew of infringement of their copyright in Linux. The "confidential"
information provided was exactly the same code fragments being shown under the
NDA... nothing contrary to their public statements.

BS didn't care whether the assertions were true or not - if SCOX was validated
they'd have made some healthy interest on their loan and reap a tidy profit on
conversion. When IBM showed no sign of backing down, they shorted the stock
deeply.

When it became absolutely clear that SCOX had nothing they consolidated the
series A1's by buying out RBC's interest, and agreed to the conversion knowing
that they could keep it tied up almost indefinitely with the regulators; this
gave them "plausible deniability" and an arm's length appearance for
what happened next.
At this point *all* of their public statements and their agreeing to conversion
provides cover that they acted in good faith in accord with the belief that SCOX
*knew* of legal IP infringement in Linux.

The "public statements" contrary to confidential information BS
received are the admissions in court that they have no evidence of Linux
infringement. But note please that these public statements would be grounds for
a suit and forcible redemption would still be challangable as matters of fact
(no facts were established at law, just assertions) and would require, when
challanged, a long legal struggle.

A blood splattered Henry Gondolf sits up and smiles:

The DC dismissal establishes, as a matter of law, prejudice against Linux IP
infringement against SCOX. BS waltzes in and says, hey we still hold the A1
shares and the conversion deal ain't final - you misrepresented! An injunction
freezing SCOX's assets to cover redemption should now be a slam dunk.
"Fingers" is going to walk away with the cash.
(IBM, RedHat and Novell may challenge this, but it still doesn't matter, SCOX is
done, the money will be frozen until the cake-cutting party).

I've got to get to the movie store. Did they ever release "The Sting"
on DVD?

---

Comment from those with a better knowledge of the legal aspects invited.

-- TWZ

[ Reply to This | # ]

BayStar to Seek Declaratory Judgment Against SCO
Authored by: Latesigner on Sunday, July 25 2004 @ 10:41 PM EDT
It looks like Microsoft will not be making up their loss.
I'm laughing.

[ Reply to This | # ]

Baystar and naked horts
Authored by: _Arthur on Monday, July 26 2004 @ 07:58 AM EDT
I think that while processing the shelf registration for the new issue of
shares,
the SEC asked Baystar point-blank:

SEC: Do you have a short position on SCOX ?
BS: Yup.
SEC: Can you *cover* your short positions ?
BS: Uh, kinda...
SEC: Tell me how you can cover your shorts *Now*
BS: Well..., <talking fast> as soon we can convert our A1 shares into
common
shares, we'll have plenty of shares to go around and cover our positions!
SEC: Liquidate your naked shorts. starting Now. Once this is done, we'll talk
about your new SCO deal.

(all this dialogue is just a figment of my overactive imagination).

_Arthur

[ Reply to This | # ]

Why did Baystar change course on the repurchase agreement?
Authored by: dn on Wednesday, July 28 2004 @ 11:20 PM EDT
I've been trying to figure out why Baystar really decided to reverese course and
not go along with the repurchase agreement. Presumably, when they entered into
the repurchase agreement on May 31, they had concluded that $13 million in cash
and 2.1 million shares of common stock represented the most that could hope to
get back on their investment. What could have happened to make them think that
by instead holding onto the Series A-1 preferred shares would be worth more
money? I've been reading the SCO Group S-3 filing (found on the SEC's EDGAR
database), and it appears to me that in the case of a liquidation event
(acquisition, say), then Baystar stands to potentially make a lot more money
than under the re-purchase agreement. Anybody else read it the same way? (See
page 12 of the S-3 filed June 22.) Has Baystar caught wind of a potential
acquisition?

[ Reply to This | # ]

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